compensating tax

compensating tax
A state tax the primary purpose of which is to protect merchants of the state from discrimination resulting from the inability of the state, under Federal Law, to impose a tax upon sales made to residents of the state by competitive merchants in other states. Pacific Tel. & Tel. Co. v Henncford, 195 Wash 553, 81 P2d 786. See use tax.

Ballentine's law dictionary. . 1998.

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