PPG Industries v. BD. OF FINANCE & REVENUE

790 A.2d 261, 567 Pa. 580, 2001 Pa. LEXIS 2564

• Court: Supreme Court of Pennsylvania
• Decided: November 30, 2001
• Docket: 87 M.D. Appeal Docket 1996
• Status: Published

Opinions

OPINION

ZAPPALA, Justice.

This is a direct appeal from an order of the Commonwealth Court, affirming the order of the Board of Finance and Revenue (Board).¹ On June 17, 1999, we issued an opinion and order holding that the manufacturing exemption to Pennsylvania’s capital stock tax and franchise tax, Section 602 of the Tax Reform Code of 1971² (Code), facially discriminated against interstate commerce. PPG Industries, Inc. v. Commonwealth, 567 Pa. 565, 790 A.2d 252 (1999) (PPG I). We remanded the matter to the Commonwealth Court for a hearing on-the following issues:

1. Whether 72 P.S. § 7602 is a “compensatory tax” as defined by Fulton Corp. v. Faulkner, 516 U.S. 325, 116 S.Ct. 848, 133 L.Ed.2d 796 (1996).

2. If it is determined that 72 P.S. § 7602 is not a “compensatory tax,” and that 72 P.S. § 7602 is therefore unconstitutional as it violates the Commerce Clause of the United States Constitution, what is the appropriate remedy.

After a hearing before the Commonwealth Court, Judge Co-lins issued an Interim Report. After reviewing this Interim Report, the record and the filings by the parties, we conclude that the mánufacturing exemption to Section 602³ discriminates against interstate commerce and therefore violates the Commerce Clause of the United States Constitution.⁴

As detailed in our opinion in PPG I, Appellant, PPG Industries, Inc. (PPG), a Pennsylvania corporation, conducts manufacturing operations at plants located both within Pennsylvania and in other states. PPG administers all of these manufacturing operations from its Pittsburgh, Pennsylvania headquarters. At issue in this case is the capital stock tax on PPG’s headquarters for the year 1983.

PPG filed a petition for review in the Commonwealth Court, challenging on constitutional and statutory construction grounds the order of the Board of Finance and Revenue which affirmed the resettlement of PPG’s 1983 tax return⁵ by the Department of Revenue and the Auditor General.⁶ By memorandum opinion and order dated November 3, 1995, a panel of the Commonwealth Court rejected PPG’s constitutional and statutory arguments and affirmed the resettlement. PPG filed exceptions and a motion for en banc review. The motion was granted by order dated December 13, 1995. By opinion and order dated June 19, 1996, the Commonwealth Court en banc denied the exceptions. PPG Industries, Inc. v. Commonwealth, 681 A.2d 832 (Pa.Cmwlth.1996).

PPG subsequently filed a timely direct appeal to this Court. Oral argument was heard on September 16, 1997. On June 17, 1999, we issued our PPG I opinion. We held that the United States Supreme Court’s decisions in Fulton Corp. v. Faulkner, 516 U.S. 325, 116 S.Ct. 848, 133 L.Ed.2d 796 (1996), Westinghouse Electric Corp. v. Tully, 466 U.S. 388, 104 S.Ct. 1856, 80 L.Ed.2d 388 (1984), and Boston Stock Exchange v. State Tax Commission, 429 U.S. 318, 97 S.Ct. 599, 50 L.Ed.2d 514 (1977), compelled a finding that the manufacturing exemption to Section 602 facially discriminated against interstate commerce. We reasoned that the manufacturing exemption constituted a discriminatory tax measure because it resulted in differential tax liability dependent upon whether the taxpayer engaged in in-state or out-of-state commercial activities, thereby affording preferential treatment to corporations engaged in manufacturing in the Commonwealth.

We did not, however, declare Section 602 unconstitutional at that point. Pursuant to the procedure established by this Court in Annenberg v. Commonwealth, 562 Pa. 570, 757 A.2d 333 (1998) (Annenberg I), and Annenberg v. Commonwealth, 562 Pa. 581, 757 A.2d 338 (2000) (Annenberg II), cert. denied, Annenberg v. Board of Comm’rs of Montgomery Co., Pa., 531 U.S. 959, 121 S.Ct. 385, 148 L.Ed.2d 296 (2000), we remanded to the Commonwealth Court for a hearing on the issues related to whether Section 602 is a compensatory tax,⁷ and therefore constitutional, and retained jurisdiction.

Following this Court’s remand order, the parties filed a comprehensive Stipulation of Facts with the Commonwealth Court.⁸ On November 15, 1993, Judge Colins conducted a hearing in which PPG and the Commonwealth participated. At the hearing, the Commonwealth conceded that Section 602 is not a compensatory tax; neither the Commonwealth nor PPG offered any evidence on the issue.

Judge Colins filed his Interim Report with this Court on November 30, 1999. Judge Colins found that Section 602 is not a compensatory tax. Interim Report at 16. With regard to the issue of the appropriate remedy, Judge Colins made the following conclusions of law:

The constitutional infirmity of Section 602 can be cured by the following remedies, in order of descending extremity:

a. Invalidating [Section 602] in its entirety;

b. Invalidating the manufacturing exemption in its entirety;

c. Invalidating the Section 602(a) exemption’s restrictive phrase, “within the State,” having the effect of exempting the capital stock of entities organized for manufacturing, processing, research or development purposes, which is invested in and actually exclusively employed in carrying on manufacturing, processing, research or development both within and outside the State[;]

d. Interpret the exemption to exclude any corporate assets not strictly incident or appurtenant to the manufacturing business; that is, PPG’s corporate headquarters.

Interim Report at 16-17.

After weighing these four options, Judge Colins made the following recommendation:

In order to redress the constitutional deprivation in this case, without engaging in a judicial re-write of [Section 602] or the manufacturing exemption, the Court, sitting as a master, would recommend the adoption of PPG’s proposed remedy for the duration of the contested period, invalidating the Section 602(a) exemption’s restriction to capital stock related to manufacturing “within the State” in the limited “headquarters context.” Prospectively, we would recommend invalidating the exemption in its entirety, leaving to the General Assembly the task of amending Section 602 in such a way that incorporates its own intentions and constitutional considerations.

Interim Report at 18.

Although this Court directed the Commonwealth Court on remand to determine whether Section 602 was a compensatory tax, the Commonwealth made no attempt to meet its burden of proving that Section 602 was compensatory; the parties conceded that Section 602 is not compensatory. Because the Commonwealth has failed to carry its burden of establishing that Section 602 is a compensatory tax, we are compelled to hold that the manufacturing exemption to Section 602 is unconstitutional as it violates the Commerce Clause of the United States Constitution.⁹

In reviewing the Interim Report, there are no factual findings on the compensatory tax issue for this Court to review and we are left solely with the issue of determining the appropriate remedy, which is purely a question of law. As with all questions of law, our standard of review is plenary. Phillips v. A-Best Products Co., 542 Pa. 124, 665 A.2d 1167 (1995).

In the Interim Report, Judge Colins outlined the four remedies lobbied for by the parties on remand. PPG argued for the retroactive expansion of the manufacturing exemption in the limited context of headquarters’ property and payroll, by excising from Section 602(a) the phrase “within the state,” thereby extending the exemption to corporations engaged in both in-state and out-of-state manufacturing. In the alternative, PPG argued for the invalidation of Section 602 in its entirety. The Commonwealth proposed interpreting the manufacturing exemption as not applicable to PPG’s headquarters. In the alternative, the Commonwealth sought prospective invalidation of the manufacturing exemption in its entirety.

In addressing this issue, Judge Colins recommended employing a hybrid approach, which combines the remedies suggested by the parties: (1) retroactively expanding the manufacturing exemption for tax year 1983 to corporations engaged in both in-state and out-of-state manufacturing; and (2) prospectively invalidating the manufacturing exemption in its entirety. PPG argues that this Court should adopt Judge Colins’s recommendation, asserting that Judge Colins’s resolution constitutes an appropriate remedial approach to reconstructing the manufacturing exemption so as to render the tax constitutional.

The public policy of this Commonwealth favors severability. See Annenberg II, 757 A.2d at 346; Commonwealth, Department of Education v. The First School, 471 Pa. 471, 370 A.2d 702, 705 (1977). The Statutory Construction Act provides:

The provisions of every statute shall be severable. If any provision of any statute ... is held invalid, the remainder of the statute ... shall not be affected thereby, unless the court finds that the valid provisions of the statute are so essentially and inseparably connected with, and so depend upon, the void provision or application, that it cannot be presumed the General Assembly would have enacted the remaining valid provisions without the void one; or unless the court finds that the remaining valid provisions, standing alone, are incomplete and incapable of being executed in accordance with the legislative intent.

1 Pa.C.S. § 1925. It is a general rule that provisions of the Statutory Construction Act, 1 Pa.C.S. § 1501 et seq., cannot be applied to statutes enacted prior to 1937.¹⁰ 1 Pa.C.S. § 1502(a)(1)(i). However, where the Statutory Construction Act merely codified existing statutory construction law, the general rule does not control and those particular provisions of the Statutory Construction Act shall be applied to statutes enacted prior to 1937. 1 Pa.C.S § 1502(b). Because the principles of severability as set forth in 1 Pa.C.S. § 1925 are clearly a restatement of the law as it existed prior to 1937, see Annenberg II, 757 A.2d at 346 n. 10; Com. ex rel. Woodruff v. Humphrey, 288 Pa. 280, 136 A. 213, 216 (1927); Rothermel v. Meyerle, 136 Pa. 250, 20 A. 583 (1890), 1 Pa.C.S § 1925 applies to this matter.

The first remedy presented by the Commonwealth is to prospectively interpret the language of Section 602 as excluding PPG’s headquarters from the manufacturing exemption.¹¹ The Commonwealth reasons that PPG’s operations at its headquarters are not exempt unless they are “appurtenant” to the manufacturing business, pursuant to the express terms of Section 602(a). However, Section 602(a) does not require property or payroll to be “appurtenant” to the manufacturing plant to be non-taxable. The statutory requirement in Section 602(a) is expressly stated in the alternative: property must be “strictly incident or appurtenant” (emphasis supplied). Section 602 cannot be interpreted as excluding PPG’s headquarters from the manufacturing exemption on this basis.

The first remedy presented by PPG is to sever the words in Section 602 that establish the “in-state” requirement in the manufacturing exemption:

Under § 602(a), ... the tax does not apply to capital stock “which is invested in and actually and exclusively employed in carrying on manufacturing, processing, research or development within the State ....“ (emphasis supplied). The constitutional problem is cured by excising, in the limited “headquarters context”, the underlined language above (“within the State”). It is not necessary to make an analogous change in § 602(b)(1), since that section expressly incorporates the manufacturing, processing, and research and development exemptions contained in § 602(a).

Appellant’s Brief at 23.

If this Court were to adopt PPG’s recommendation, the result would be the extension of the manufacturing exemption to manufacturing generally, i.e., to corporations engaged in both in-state and out-of-state manufacturing. This we cannot do.

When this Court severs a void provision from a statute, it is doing so to attempt to effectuate legislative intent. In PPG I, however, we contemplated the legislative intent behind the manufacturing exemption and specifically found that .applying the manufacturing exemption to manufacturing generally was contrary to legislative intent:

In Commonwealth v. Weldon Pajamas, Inc., 432 Pa. 481, 248 A.2d 204 (1968), this Court critically analyzed the manufacturing exemption:

Historically, the manufacturing exemption ... has been reserved to those corporations organized for manufacturing purposes and actually engaged in manufacturing in Pennsylvania. Our analysis of the statute and its long and involved history convinces us that ... the legislature intended the manufacturing exemption to apply only to those corporations actually engaged in manufacturing in Pennsylvania.

248 A.2d at 205 (emphasis in original).

The manufacturing exemption is a locational incentive that “was created in order to establish a1 favorable climate in Pennsylvania for manufacturers and thus encourage the development of industry.” Commonwealth v. Deitch Company, 449 Pa. 88, 295 A.2d 834, 838 (1972). The manufacturing exemption does not apply to manufacturing generally.

790 A.2d at 256. Accordingly, we reject PPG’s argument and decline to extend the manufacturing exemption to manufacturing generally.

The second remedy presented by the Commonwealth is to sever the manufacturing exemption from Section 602. PPG counters with its second remedy, invalidating Section 602 in its entirety. Thus, the question becomes whether the manufacturing exemption is severable from Section 602.

The rules of statutory construction provide that the void provision of the statute be severed unless “it cannot be presumed the General Assembly would have enacted the remaining valid provisions without the void one....” 1 Pa.C.S. § 1925. The General Assembly first added the manufacturing exemption to the capital stock and franchise tax statute in 1885, forty-five years after the General Assembly enacted the first capital stock tax in 1840 (see supra note 10). Since then, the General Assembly has repealed and reenacted the manufacturing exemption twice. Given this factual background, we must disagree with PPG’s contention that “it is virtually inconceivable that the legislature ... would want to maintain the tax without the exemption.” Brief for Appellant at 32. To the contrary, the legislature has maintained the tax both with and without the exemption for the last one-hundred sixteen years.

In further support of its argument, PPG claims that the recent enactment of Act 63 is compelling evidence that the General Assembly considers the manufacturing exemption to be an integral part of Section 602. This argument fails because it requests that we focus not on the intent of the legislature which enacted the void provision of this statute, but instead on the intent that can possibly be inferred from the enactment of Act 63. As we have previously stated, such an analysis is not in accord with our rules of statutory construction:

Clearly, [1 Pa.C.S. § ] 1925 funnels our inquiry to examining what the enacting legislature would have done had it known that the exemption ... was unconstitutional. The statute does not ... instruct us to examine what subsequent legislatures would have intended vis-a-vis the ... tax.

Annenberg II, 757 A.2d at 347.

For the foregoing reasons, we reject the arguments against severability and sever the manufacturing exemption from Section 602. The net effect of this severance is that the capital stock of domestic and foreign entities which had previously escaped the capital stock and franchise taxes by virtue of the manufacturing exemption will now be subject to the taxes.

We now turn to the question of what retx-ospective remedy, if any, is due to the taxpayers.¹² The United States Supreme Court’s decision in McKesson v. Division of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Florida, 496 U.S. 18, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990), dictates that some retroactive remedy is due hei’e so that the prior unconstitutional discrimination is rectified. In McKesson, the Supreme Court noted that the Due Process Clause of the Fourteenth Amendment requires that the State fashion a backwards looking remedy whereby those who had paid the discriminatory tax are put in the same position as those taxpayers who had been favored by the unlawful exemption. 496 U.S. at 43, 110 S.Ct. 2238; see also Annenberg II, 757 A.2d at 349-350; Reynoldsville Casket Co. v. Hyde, 514 U.S. 749, 751-753, 115 S.Ct. 1745, 131 L.Ed.2d 820 (1995); Harper v. Virginia Dept. of Taxation, 509 U.S. 86, 97, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993). The McKesson Court provided several retrospective remedies which would cure the previous discrimination: (1) refunding the difference between the tax paid and the tax that would have been assessed had the taxpayer been granted the unlawful exemption, to those who were discriminated against by the unlawful exemption; (2) assessing and collecting back taxes, to the extent consistent with other constitutional restrictions,¹³ from those who benefited from the unlawful exemption during the contested period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme; or (3) applying a combination of a partial refund and a partial retroactive assessment, so long as the resultant tax actually’assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce. 496 U.S. at 40-41,110 S.Ct. 2238.

Accordingly, we hold that 72 P.S. § 7602 is not a compensatory tax and the manufacturing exemption is therefore unconstitutional as it violates the Commerce Cla.use; that the void exclusionary language is severable; and direct that the Commonwealth must forthwith provide a retrospective remedy consistent with this opinion.

Jurisdiction is relinquished.

Justice CAPPY concurs in the result. Justice SAYLOR files a dissenting opinion in which Justice CASTILLE joins.

1 . Pursuant to 42 Pa.C.S. § 723(b), any final order of the Commonwealth Court entered in any appeal from a decision of the Board of Finance and Revenue is appealable to this Court, as of right. See also Pa.R.A.P. 1101(a)(2).

2 . Act of March 4, 1971, P.L. 6, as amended, 72 P.S. § 7602.

3 . Section 602 imposes a capital stock tax on domestic entities and a franchise tax on the capital stock of foreign entities at the rate of ten mils for the year 1983 (the tax year at issue in the instant case). The computations for the capital stock tax, Section 602(a), are distinct from those for the franchise tax, Section 602(b)(1). Under the Code, a domestic or foreign entity may elect to compute and pay its taxes under either computational method. Commonwealth v. After Six, Inc., 489 Pa. 69, 413 A.2d 1017 (1980).

The manufacturing exemption to Section 602 provides exemptions from the capital stock tax as follows:

Provided, That ... the provisions of this section shall not apply to the taxation of the capital stock of entities organized for manufacturing, processing, research or development purposes, which is invested in and actually and exclusively employed in carrying on manufacturing, processing, research or development within the State ... shall pay the State tax ... upon such proportion of its capital stock, if any, as may be invested in any property or business not strictly incident or appurtenant to the manufacturing, processing, research or development business, ... it being the object of this provision to relieve from State taxation ... only so much of the capital stock as is invested purely in the manufacturing, processing, research or development plant and business.

72 P.S. § 7602(a).

The manufacturing exemption to Section 602 provides exemptions from the franchise tax as follows:

Provided, That the manufacturing, processing, research and development exemptions contained under section 602(a) shall also apply to foreign corporations and in determining the relevant apportionment factors tire numerator of the property, payroll, or sales factors shall not include any property, payroll or sales attributable to manufacturing, processing, research or development activities in the Commonwealth.

72 P.S. § 7602(b)(1).

4 . U.S. Const, art. 1, § 8, cl. 3.

5 . For its 1983 taxes, PPG elected to compute its headquarters' capilal stock tax as if it was a foreign corporation paying a franchise (ax, utilizing Section 602(b)(1) “three-factor apportionment.” Under ihe "three-factor apportionment” method, the amount subject to tax is computed by multiplying the value of the corporation's capital stock by an apportionment factor. The apportionment factor is found by calculating the average of three ratios: tangible property in Pennsylvania to tangible property everywhere; payroll in Pennsylvania to payroll every- ■ where; and sales in Pennsylvania to sales everywhere. The franchise tax statute permits a corporation to reduce its tax liability through operation of the manufacturing exemption, which excludes from the numerators of the fractions the value of the corporation’s property, payroll and sales used in the administration of manufacturing in the Commonwealth.

For its 1983 taxes, PPG exempted from taxation the value of property and payroll related to the administration of all of its manufacturing operations, regardless of whether such operations were in-state or out-of-state. After auditing PPG’s 1983 tax return, the Department of Revenue and the Auditor General took the position that PPG’s headquarters' property and payroll were entitled to the manufacturing exemption only insofar as the headquarters’ employees administered manufacturing plants in-state.

6 . Although we are here concerned with PPG's 1983 tax return, appeals for PPG's subsequent filings through and including 1998 are pending.

7 . As slated by this Court in Annenberg I:

.[O]nce a determination has been made that a statute is facially discriminatory, the burden then shifts to the state to establish that the statute "advances a legitimate local purpose that cannot be adequately served by reasonably nondiscriminatory alternatives." New Energy Co. [of Indiana v. Limbach], 486 U.S. at 278, 108 S.Ct. at 1810, 100 L.Ed.2d 302 at 311. In the language of Fulton, there are three conditions necessary for a valid compensatory tax. First, a State must, as a threshold matter, identify ... the intrastate tax burden for which the State is attempting to compensate. Second, the tax on interstate commerce must be shown roughly to approximate — but not exceed — the amount of the tax on intrastate commerce. Finally, the events on which the interstate and intrastate taxes are imposed must be substantially equivalent; that is, they must be sufficiently similar in substance to serve as mutually exclusive proxies for each other.

516 U.S. at 332-333, 116 S.Ct. at 854-855, 133 L.Ed.2d at 806 (citations and internal quotation marks omitted).

757 A.2d at 337-338.

8 . The Stipulation of Facts addressed: (1) the operation of Section 602, including apportionment methodology and the manufacturing exemption; (2) the taxation of PPG’s corporate headquarters; and (3) the significance and scope of Section 602.

9 . On December 15, 1999, in response to this Court's opinion in PPG I, the Governor signed into law Act 1999-63 (Act 63), which, inter alia, amends Section 602. As amended, the manufacturing exemption takes the following form:

[T]he numerator of the property and payroll factors shall not include any property or payroll attributable to manufacturing, processing, research or development activities in the Commonwealth and any property or payroll attributable to manufacturing, processing, research or development activities outside of the Commonwealth shall also be excluded from the numerator of the property and payroll factors. (emphasis added). The effect of the amendment is that the manufacturing exemption applies to the administration of both in-state and out-of-state manufacturing. This revision applies only to the 1999 and 2000 tax years; thereafter, the exemption reverts to a form that more closely resembles the version of Section 602 at issue here. See Act 63, Section 1, enacting §§ 602(b)(l)(I & II). This time-limited revision presumably reflects the General Assembly’s intent to revisit the issue.

10 . The first capital stock tax was enacted in 1840, Act of June 11, 1840, No. 232, P.L. 612. In 1868, it was extended (o foreign corporations, Act of May 1, 1868, No. 69, P.L. 108. In 1885, the first manufacturing exemption was added, Act of June 30, 1885, No. 162, P.L. 193. In 1935, the tax was amended to designate capital stock tax on foreign corporations as a franchise tax, and rules were provided for apportionment, Act of May 16, 1935, No. 86, P.L. 184. The manufacturing exemption was repealed in 1935, conditionally reenacted in 1943, Act of May 27, 1943, No. 323, P.L. 762, but not made effective again until 1958, Act of March 15, 1956, No. 395, P.L. 1285. The Tax Reform Code, Act of March 4, 1971, No. 2, P.L. 6, reenacted and codified the capital stock and franchise tax provisions, omitting the exemptions. The exemptions were restored for the second half of 1972 and tax years thereafter, Act of August 31, 1971, No. 93, P.L. 362.

11 . In making this argument, the Commonwealth urges a re-examination of this Court’s holding in PPG I that the manufacturing exemption to Section 602 facially discriminates against interslate commerce. See. Appellee's Brief at 7-11. However, our holding in PPG / that ihe manufacturing exemption facially discriminates against interstate commerce is the law of the case. "The law of the case doctrine provides, in pertinent part, that ‘upon a second appeal, an appellate court may not alter the resolution of a legal question previously decided by the same appellate court....'” Commonwealth v. Yarris, 557 Pa. 12, 731 A.2d 581, 586 (1999), quoting Commonwealth v. Starr, 541 Pa. 564, 664 A.2d 1326, 1331 (1995). Had the Commonwealth desired to properly challenge our holding in PPG I, it could have filed an Application for Reargume.ut pursuant to the Rules of Appellate Procedure. See Pa. R.A.P. 2541 et seq. Although the dissent opines that we should address the Commonwealth’s position in light of "the highly unusual circumstances presented”, see Dissenting Opinion at 3, we may not depart front the law of the case doctrine unless confronted with exceptional circumstances, such as "where the prior holding was clearly erroneous and would create a manifest injustice if followed.” Yarris, 731 A.2d at 586. Such is not the case here; our holding was not clearly erroneous.

According to the dissent, it is the "methodology”, i.e., the "headquarters subfactor'', which discriminates against interstate commerce, not the manufacturing exemption itself. However, this assertion overlooks the fact that the headquarters subfactor is utilized by the Commonwealth in order to give effect to the restrictive phrases in Section 602(a) and (b), "within the Slate” and "in ihe Commonwealth.”

The absurdity of the Commonwealth's position is further evident by the suggested remedies predicated on this argument. For il it is the "methodology” and not the statute itself which is unconstitutional, there woidd be no need to interpret Section 602 as excluding PPG's headquarters from the manufacturing exemption {see infra at 268), or to sever the manufacturing exemption from Section 602 {see infra at 268-69).

12 . In the typical taxation case in which a challenge to a locational tax incentive is brought, it is usually a taxpayer who is not receiving the benefit of the incentive who challenges the incentive as discriminatory. In this case, however, it is the party receiving the benefit which has mounted the challenge. See PPG I, 790 A.2d at 260 n. 10. As appeals of PPG’s tax filings from 1984 to 1988 remain pending {see supra note 6), any retrospective remedy would apply to such pending cases, as well as any pending appeals by any other taxpayers regarding this issue.

13 . Regarding these "other constitutional restrictions,” the United States Supreme Court stated:

We previously have held that the retroactive assessment ol a tax increase does not necessarily deny due process to those whose taxes are increased, though beyond some temporal point the retroactive imposition of a significant tax burden may be "so harsh and oppressive as to Iransgress the constitutional limitation,” depending on "the nature of the tax and the circumstances in which it is laid.” Welch v. Henry, 305 U.S. 134, 147, 59 S.Ct. 121, 83 L.Ed. 87 (1938). See United States v. Hemme, 476 U.S. 558, 106 S.Ct. 2071, 90 L.Ed.2d 538 (1986); United States v. Darusmont, 449 U.S. 292, 101 S.Ct. 549, 66 L.Ed.2d 513 (1981); cf. United States v. Sperry Corp., 493 U.S. 52, 65, 110 S.Ct. 387, 396, 107 L.Ed.2d 290, (1989) ("It is surely proper for congress to legislate retrospectively to ensure that costs of a program are borne by the entire class of persons that Congress rationally believes should bear them”); Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16, 96 S.Ct. 2882, 2893, 49 L.Ed.2d 752 (1976) ("Legislation readjusting rights and burdens is not unlawful solely because it upsets the otherwise settled expectations. This is true even though the effect of the legislation is to impose a new duty or liabilitv based on past acts”) (citations omitted).

496 U.S. at 40 n.23, 110 S.Ct. at 2252.