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SJC-11873

   REGENCY TRANSPORTATION, INC.    vs.   COMMISSIONER OF REVENUE.



       Suffolk.       November 5, 2015. - January 6, 2016.

 Present:   Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &
                            Hines, JJ.


Taxation, Sales and use tax, Abatement. Constitutional Law,
     Taxation, Commerce clause, Interstate commerce. Interstate
     Commerce.



    Appeal from a decision of the Appellate Tax Board.

     The Supreme Judicial Court granted an application for
direct appellate review.


     Matthew A. Morris (Richard L. Jones with him) for the
taxpayer.
     Marikae G. Toye (Joseph J. Tierney with her) for the
Commissioner of Revenue.
     Elizabeth J. Atkinson, of Virginia, & Andrew J. Fay &
Patrick E. McDonough, for Massachusetts Motor Transportation
Association & others, amici curiae, submitted a brief.


    CORDY, J.     Regency Transportation, Inc. (Regency), appeals

from a decision of the Appellate Tax Board affirming in part the

denial of an abatement of the motor vehicle use tax assessed
                                                                    2


against it under G. L. c. 64I, § 2.     We granted Regency's

application for direct appellate review to decide whether an

unapportioned use tax imposed on Regency's interstate fleet of

vehicles violates the commerce clause of the United States

Constitution. For the reasons discussed herein, we conclude it

does not.1

     1.   Background.    The essential facts are not disputed.

Regency is a Massachusetts S corporation that operates a freight

business with terminals in Massachusetts and New Jersey.

Regency is licensed by the Interstate Commerce Commission as an

interstate carrier to operate a fleet of tractors and trailers.

The Regency fleet carries and delivers goods throughout the

eastern United States.

     Throughout the tax periods at issue, Regency maintained its

corporate headquarters in Massachusetts, as well as four

warehouses and a combined maintenance facility and terminal

location which it used for repairing and storing vehicles in its

fleet.    Regency also operated five warehouses in New Jersey and

two combined maintenance facility and terminal locations there.

Regency performed thirty-five per cent of the maintenance and

repair work on its fleet at its Massachusetts locations and

thirty-five per cent of the work at its New Jersey locations,

     1
       We acknowledge the amicus brief filed by the Massachusetts
Motor Transportation Association and other State transportation
associations.
                                                                     3


with the remainder being performed by third parties.    All

vehicles in the Regency fleet entered into Massachusetts at some

point during the tax periods at issue, and during these same

periods Regency employed between sixty-three and eighty-three

per cent of its workforce in the Commonwealth.

    Regency purchased the vehicles in its fleet from vendors in

New Hampshire, New Jersey, Indiana, and Pennsylvania and

accepted delivery and possession outside the Commonwealth.     The

vehicles were registered in New Jersey and bore New Jersey

registration plates.   Regency did not pay sales or use tax to

any jurisdiction on its purchases of the vehicles because New

Hampshire does not impose a sales tax and the remaining States

provide an exemption for vehicles engaged in interstate

commerce, known as a "rolling stock exemption."   The majority of

States provides such an exemption from sales and use tax;

Massachusetts does not, having abolished its rolling stock

exemption in 1996.

    In August, 2010, the Commissioner of Revenue (commissioner)

issued a notice of assessment to Regency pursuant to an audit of

its sales and use tax liabilities for the monthly tax periods

beginning October 1, 2002, and ending January 31, 2008.     The

commissioner imposed a use tax on the full purchase price of

each tractor and trailer in Regency's fleet, totaling

$1,472,258.22, including $298,286.61 in interest and $391,323.95
                                                                   4


in penalties for failure to file use tax returns and failure to

pay use tax.     Regency requested full abatement of the

assessment, which the commissioner denied in November, 2010.

Regency timely appealed to the Appellate Tax Board (board) in

January, 2011.

    In its appeal, Regency argued that the Commonwealth's

imposition of a use tax on vehicles engaged in interstate

commerce violated the commerce clause of the United States

Constitution and the equal protection clauses of the United

States and Massachusetts Constitutions.     Regency also argued

that its reliance on a "letter ruling" issued by the Department

of Revenue (department) under prior law constituted reasonable

cause for the commissioner to abate the penalties assessed for

failure to file returns and pay the tax.

    The board rejected Regency's arguments as to the commerce

and equal protection clauses and concluded that Regency was

liable for the Massachusetts use tax on the full sales price of

its vehicles that were either stored or used in the

Commonwealth.    It ruled that the tax was permissible under the

commerce clause and administered in a manner consistent with the

equal protection clauses of the United States and Massachusetts

Constitutions.    The board noted that "while the fact that

Massachusetts imposes a use tax on the use of interstate

vehicles in the Commonwealth when many [S]tates do not may
                                                                      5


increase costs for taxpayers who use vehicles here, this

difference is not unconstitutional discrimination because

Massachusetts allows a credit for any taxes paid to other

jurisdictions."

       The board, however, abated the penalties imposed after

finding that the commissioner's continued publication of

incorrect guidance created uncertainty constituting reasonable

cause for Regency's failure to file use tax returns and pay use

tax.    Regency timely appealed the board's decision, and

petitioned this court for direct appellate review, which we

granted.    On appeal to this court, Regency challenges only the

board's determination that the motor vehicle use tax does not

violate the commerce clause.

       2.   General Laws c. 64I, § 2.   General Laws c. 64I, § 2,

imposes a tax on the "storage, use or other consumption in the

commonwealth of tangible personal property."      "The use tax was

designed to prevent the loss of sales tax revenue from out-of-

State purchases."     M & T Charters, Inc. v. Commissioner of

Revenue, 404 Mass. 137, 140 (1989).      The use tax and the sales

tax "are complementary components of our tax system, created to

reach all transactions, except those expressly exempted, in

which tangible personal property is sold inside or outside the

Commonwealth for storage, use, or other consumption within the

Commonwealth" (quotation and citation omitted).      Town Fair Tire
                                                                    6


Ctrs., Inc. v. Commissioner of Revenue, 454 Mass. 601, 605

(2009).   They are mutually exclusive and the tax rate is

identical.   See G. L. c. 64H, § 2; G. L. c. 64I, § 2.

     The statute creates a rebuttable presumption that property

brought into the Commonwealth by the purchaser within six months

of purchase was purchased for storage, use, or other consumption

in Massachusetts.   G. L. c. 64I, § 8 (f).   See 830 Code Mass.

Regs. § 64H.25.1(3)(c)(2) (1993).    The use tax imposed under

c. 64I applies to transfers of title or possession of a motor

vehicle where the vehicle transferred is thereafter stored,

used, or otherwise consumed in Massachusetts.    830 Code Mass.

Regs. § 64H.25.1(3)(a) (1993).

     A purchaser may be exempt from the use tax if it has paid a

comparable use or sales tax in another jurisdiction, and, if the

tax paid is less than the corresponding Massachusetts tax, the

purchaser may offset its Massachusetts tax liability by any

amount previously paid to the other jurisdiction.    G. L. c. 64I,

§ 7 (c) (§ 7 [c] exemption).2    As amplified in the department's


     2
       General Laws c. 64I, § 7 (c), exempts from the use tax
"[s]ales upon which the purchaser has paid a tax or made
reimbursement therefor to a vendor or retailer under the laws of
any [S]tate or territory of the United States, provided that
such tax was legally due without any right to a refund or credit
thereof and that such other [S]tate or territory allows a
corresponding exemption with respect to the sale or use of
tangible personal property or services upon which such a sales
or use tax was paid to this [S]tate. To the extent that the tax
imposed by this chapter is at a higher rate than the rate of tax
                                                                    7


regulations, a § 7 (c) exemption exists for the sale or transfer

of a vehicle that is subsequently brought to or used in

Massachusetts if (1) "the purchaser or the transferee [has paid]

a sales or use tax on the vehicle to the [S]tate or territory in

which the sale or transfer occurred"; (2) "the sales or use tax

[has been paid] by the purchaser or the transferee and [was]

legally due the State or territory"; (3) "the purchaser or the

transferee [has not received and does not] have a right to

receive a refund or credit of the sales or use tax from the

[S]tate or territory in which the sale or transfer occurred";

and (4) "the [S]tate or territory to which the sales or use tax

was paid [allows] a corresponding exemption with respect to

motor vehicle sales and use taxes paid to Massachusetts."     830

Code Mass. Regs. § 64H.25.1(7)(g) (1996).   The department

regulations further provide that sales or transfers are exempt

from the imposition of a sales or use tax if their taxation is

impermissible under the Constitution or laws of the United

States.   830 Code Mass. Regs. § 64H.25.1(7)(h) (1996).

    Regency does not dispute that it used and stored its

tractors and trailers in Massachusetts during the tax periods at

issue, nor does it dispute that it did not pay sales or use tax

to any other State on the purchase of the vehicles.   The § 7 (c)


in the first taxing jurisdiction, this exemption shall be
inapplicable and the tax imposed by this chapter shall apply to
the extent of the difference in such rates."
                                                                     8


exemption delineated in 830 Code Mass. Regs. § 64H.25.1(7)(g)

therefore does not apply.    Consequently, we focus our inquiry on

whether the use tax is otherwise impermissible under the United

States Constitution, as Regency contends.

    3.    Commerce clause.   The Commonwealth's taxing powers are

limited by the commerce clause's broad grant of authority to the

Federal government to "regulate commerce with foreign nations

and among the several [S]tates."     Art. 1, § 8, of the United

States Constitution.     The United States Supreme Court has

interpreted the clause to comprehend a negative, or dormant,

command that prevents the States from unduly burdening

interstate commerce, even where Congress has not otherwise

acted.    See D.H. Holmes Co. v. McNamara, 486 U.S. 24, 29-30

(1988).   "The dormant commerce clause seeks to prevent economic

'Balkanization,' . . . and to protect an area of free trade

among the several States" (quotations and citation omitted).

DIRECTV, LLC v. Department of Revenue, 470 Mass. 647, 653, cert.

denied, 136 S. Ct. 401 (2015).     The dormant commerce clause is

implicated where, as here, a State imposes a tax that touches on

interstate commerce.    Aloha Freightways, Inc. v. Commissioner of

Revenue, 428 Mass. 418, 421 (1998).

    Our review of commerce clause challenges to State taxes

focuses on "the practical effect of a challenged tax" (citation

omitted).   Commonwealth Edison Co. v. Montana, 453 U.S. 609, 615
                                                                    9


(1981).   Interstate commerce does not enjoy a "'free trade'

immunity from State taxation," George S. Carrington Co. v. State

Tax Comm'n, 375 Mass. 549, 551-552 (1978), but rather "may be

made to pay its way" within the bounds of the commerce clause.

Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 281 (1977)

(Complete Auto).    A State tax will be sustained under the

commerce clause if it meets the test articulated by the Supreme

Court in Complete Auto, supra at 279, which requires that the

tax "[1] is applied to an activity with a substantial nexus with

the taxing State, [2] is fairly apportioned, [3] does not

discriminate against interstate commerce, and [4] is fairly

related to the services provided by the State" (Complete Auto

test).

    4.    Discussion.    In reviewing the board's final decision,

we affirm findings of fact by the board that are supported by

substantial evidence.     M & T Charters, Inc., 404 Mass. at 140.

"We review conclusions of law, including questions of statutory

construction, de novo."     New England Forestry Found., Inc. v.

Assessors of Hawley, 468 Mass. 138, 149 (2014), citing

Bridgewater State Univ. Found. v. Assessors of Bridgewater, 463

Mass. 154, 156 (2012).

    Because the parties agree that Regency's activities in

Massachusetts constitute a "substantial nexus" with the
                                                                    10


Commonwealth, we begin our analysis with the second prong of the

Complete Auto test.

    a. Fair apportionment.   The fair apportionment requirement

of the Complete Auto test ensures "that each State taxes only

its fair share of an interstate transaction."    Goldberg v.

Sweet, 488 U.S. 259, 260-261 (1989).    "Apportionment also seeks

to avoid multiple taxation by different States."    Aloha

Freightways, Inc., 428 Mass. at 421.

    There is no set formula for determining whether a tax is

fairly apportioned; rather, we examine whether the tax is both

internally and externally consistent.   Aloha Freightways, Inc.,

428 Mass. at 422, quoting Goldberg, 488 U.S. at 261.

    i.   Internal consistency.3   A tax is internally consistent

if it is "structured so that if every State were to impose an


    3
       The parties disagree about whether we may reach the issue
of internal consistency on appeal. In the proceedings below,
Regency Transportation, Inc. (Regency), acknowledged that the
tax is internally consistent. On appeal, however, it takes the
opposite position, and further argues that it may challenge the
statute as internally inconsistent in spite of its concession
below because "the issue of law presented on appeal is whether
the use tax is fairly apportioned [and] not the precise means
. . . by which this Court could conclude that the use tax is not
fairly apportioned," i.e., whether it meets both prongs of the
fair apportionment test. The Commissioner of Revenue
(commissioner) is of the view that Regency's concession
effectively waived the argument, barring its revival on appeal.
See G. L. c. 58A, § 13 ("The court shall not consider any issue
of law which does not appear to have been raised in the
proceedings before the [Appellate Tax Board (board)]"); Minchin
v. Commissioner of Revenue, 393 Mass. 1004, 1005 (1984) ("[t]o
raise a constitutional question on appeal to this court from the
                                                                  11


identical tax, no multiple taxation would result."   Aloha

Freightways, Inc., supra, quoting Goldberg, supra.

    In Regency's view, the § 7 (c) exemption is rendered

unconstitutional by the language in 830 Code Mass. Regs.

§ 64H.25.1(7)(g)(1)(a), which exempts from liability a taxpayer

who has paid taxes "to the [S]tate or territory in which the

sale or transfer occurred."   Regency believes that this language

limits the exemption such that it is not available where a sales

or use tax was paid to a State where sale or transfer did not

occur, potentially subjecting purchasers to multiple taxation.

To illustrate this possibility, Regency proposes a hypothetical

situation whereby an interstate carrier purchases a tractor in

New Hampshire (which has no sales tax) and drives the tractor to

New Jersey, where it is registered.   The carrier pays no sales

or use tax in New Jersey because the State provides a rolling

stock exemption.   The carrier then drives the tractor to


board, the taxpayer must present the question to the board and,
in so doing, make a proper record for appeal. Otherwise, the
taxpayer waives the right to press the constitutional argument."
We have not had occasion to decide whether an appellant may
raise an argument in support of its constitutional claim on
appeal where it raised the claim below but then conceded the
argument. For the purposes of this appeal, we assume without
deciding that Regency waived its internal consistency argument
by conceding the matter below. We nevertheless reach the issue
because the matter has been fully briefed on the merits, there
is a public interest in promptly resolving the issue, and the
answer to be given is reasonably clear and dependent on issues
of general application and not on factual determinations
specific to the case at hand. See Brown v. Guerrier, 390 Mass.
631, 632-633 (1983).
                                                                   12


Vermont, which provides no rolling stock exemption, and is

assessed the Vermont use tax.   The carrier then drives the truck

to Massachusetts, where it is assessed the Massachusetts use

tax.   According to Regency, Massachusetts will not credit the

Vermont use tax paid because the tax was not paid "to the State

or territory in which the sale or transfer occurred" per the

language of § 64H.25.1(7)(g).    The result, Regency asserts, is

that the carrier is assessed the use tax twice because the

language precludes its eligibility for the exemption and renders

the scheme internally inconsistent.

       We do not agree with Regency's interpretive legerdemain,

which ignores the "catch-all" exemption provided by 830 Code

Mass. Regs. § 64H.25.1(7)(h), which exempts a taxpayer from

Massachusetts' use tax liability, beyond the exemptions set

forth in § 64H.25.1(7)(g):

       "if the use of the vehicle in Massachusetts as part of
       interstate commerce is exempt from use tax under the
       Constitution or laws of the United States. For the
       purposes of this subsection, the use of such a vehicle in
       Massachusetts as part of interstate commerce is exempt from
       Massachusetts use tax under the Constitution or laws of the
       United States only if application of the use tax violates
       the test applied by the United States Supreme Court
       in [Complete Auto]."

       The commissioner responds to this hypothetical by

explaining that, because the hypothetical imposition of the use

tax would violate the Complete Auto test due to its potential

for multiple taxation, it is, by its terms, otherwise exempted
                                                                   13


under § 64H.25.1(7)(h).   Consequently, Massachusetts would

either not impose a use tax, or if the Vermont tax rate was

lower than the Massachusetts tax rate, Massachusetts would

credit the amount of the tax paid to Vermont.   We agree with the

commissioner's reading of the regulations.   See Biogen IDEC MA,

Inc. v. Treasurer & Receiver Gen., 454 Mass. 174, 187 (2009)

("We accord substantial deference to the agency's regulations

and apply all rational presumptions in favor of the validity of

the administrative action and [do] not declare it void unless

its provisions cannot by any reasonable construction be

interpreted in harmony with the legislative mandate").     Because

any potential for multiple taxation under § 64H.25.1(7)(g) is

averted by the language of § 64H.25.1(7)(h), with respect to use

taxes paid to another jurisdiction, we conclude that the use tax

is internally consistent.   See, e.g., M & T Charters, Inc., 404

Mass. at 143.   This conclusion is dependent upon the

commissioner's interpretation of the department's regulations as

presented to the court.

    ii.   External consistency.   We turn next to the question of

whether the use tax is externally consistent.   This inquiry is

satisfied where "the State has taxed only that portion of the

revenues from the interstate activity which reasonably reflects

the in-state component of the activity being taxed."     Aloha

Freightways, Inc., 428 Mass. at 422, quoting Goldberg, 488 U.S.
                                                                   14


at 262.   To make this determination, we examine the "in-state

business activity which triggers the taxable event and the

practical or economic effect of the tax on that interstate

activity."   Goldberg, supra.   Here, the in-State activity at

issue is the "storage, use or other consumption in the

commonwealth of tangible personal property."    G. L. c. 64I, § 2.

There are ample facts to support the board's finding that

Regency's tax liability reasonably reflects the in-State

activity being taxed.   Regency has used all of the tractors and

trailers in its fleet in Massachusetts, and stores and maintains

its fleet, at least in part, in the Commonwealth.

     Nevertheless, Regency contends that the tax is externally

inconsistent because the tax base on the property engaged in

interstate commerce (tractors and trailers) is not apportioned

reasonably to reflect the in-State activity being taxed, which

it says is its use of Commonwealth's roads.4   We disagree with

this characterization, as G. L. c. 64I, § 2, is not so limited


     4
       For this proposition, Regency cites a decision from the
Alabama Court of Appeals, Boyd Brothers Transp., Inc. v. State
Dep't of Revenue, 976 So. 2d 471, 482 (Ala. App. 2007), which
struck down an unapportioned use tax on the value of trucks used
in interstate commerce as violating the commerce clause. We are
not bound by this decision, but note that the court failed to
consider the issue of credit provisions in lieu of
apportionment, and deviated from a decision of its own supreme
court, which upheld a use tax where a credit was available to
prevent multiple taxation. See Ex parte Fleming Foods of Ala.,
Inc., 648 So. 2d 577, 579-580 (Ala. 1994). Accordingly, Boyd
Brothers Transp., Inc., is irrelevant to our analysis.
                                                                   15


in its scope and application.   The statute, by its terms,

applies to use, storage, or consumption, and Regency's

activities in the Commonwealth are not limited only to its use

of the Commonwealth's roads.

    Moreover, the Supreme Court has, in considering a challenge

to a sales tax, rejected the argument that a tax must be

apportioned to satisfy the external consistency requirement,

stating that it has "consistently approved taxation of sales

without any division of the tax base among different States, and

[has] instead held such taxes properly measurable by the gross

charge for the purchase, regardless of any activity outside the

taxing jurisdiction that might have preceded the sale or might

occur in the future."   Oklahoma Tax Comm'n v. Jefferson Lines,

Inc., 514 U.S. 175, 186 (1995) (Jefferson Lines, Inc.).      The

taxpayer in that case argued that Oklahoma should be limited to

imposing sales tax only on an apportioned value of a bus ticket

that represented the miles of the journey traversed in Oklahoma.

Id. at 191-192.

    The court rejected the argument that the tax must be

apportioned based on mileage simply because it was possible to

do so where the taxpayer had otherwise failed to demonstrate

that the unapportioned tax was grossly out of proportion to

taxed activity transacted in Oklahoma.   Id. at 195-196.     The

Court explained that there was "no reason to leave the line of
                                                                     16


longstanding precedent and lose the simplicity of our general

rule sustaining sales taxes measured by full value."      Id. at

196.   It concluded that the Oklahoma tax was therefore

externally consistent, "reaching only the activity taking place

within the taxing State, that is, the sale of the service."        Id.

       Similarly, the motor vehicle use tax need not be

apportioned, so long as we can discern the "economic

justification for the State's claim" and determine that the use

tax does not "reach[] beyond that portion of value that is

fairly attributable to economic activity within the taxing

State."   Id. at 185.   The use tax is intended to "to prevent the

loss of sales tax revenue from out-of-State purchases."

Commissioner of Revenue v. J.C. Penney Co., 431 Mass. 684, 687

(2000), quoting M & T Charters, Inc., 404 Mass. at 140.      Given

this intent, the tax is properly measurable by the sale value of

a vehicle that is subsequently brought to the Commonwealth for

storage, use, or other consumption.    Here, the use tax imposed

on Regency is reasonably related to the in-State activity being

taxed, which includes a great deal more than the mere use of its

roads, and Regency is not subject to the imposition of multiple

use or sales taxes in other jurisdictions.   Accordingly, the tax

is externally consistent.    Because both internal and external

consistency requirements are met, we hold that the use tax is
                                                                  17


fairly apportioned in keeping with the requirements of the

commerce clause.

    b.   Discrimination against interstate commerce.     The third

prong of the Complete Auto test examines whether a tax

discriminates against interstate commerce.   Although the use tax

is imposed at the same rate as the sales tax and is levied on

residents and nonresidents alike, see G. L. c. 64I, § 2, Regency

argues that the use tax is nevertheless discriminatory because

the tax, when divided by the miles actually driven by Regency

vehicles in Massachusetts, is significantly greater for Regency

than for intrastate companies.   As a result, Regency says, the

Massachusetts use tax places it at a competitive disadvantage as

compared to companies doing business in States that impose no

sales tax or provide rolling stock exemptions, and this

disadvantage must be ascribed to the discriminatory nature of

the use tax.   See Comptroller of Treasury of Md. v. Wynne, 135

S. Ct. 1787, 1802 (2015).   We disagree.

    As an initial matter, Regency fails to articulate why we

should assess the impact of the use tax based on the miles

traveled by the Regency fleet within the Commonwealth.    As noted

earlier, the use tax is imposed in connection with Regency's use

and storage of the fleet within the Commonwealth, and not solely

based on its use of roads within the Commonwealth.
                                                                  18


    For this reason, Regency's reliance on the holdings in

American Trucking Ass'ns, Inc. v. Scheiner, 483 U.S. 266 (1987),

and American Trucking Ass'ns, Inc. v. Secretary of Admin., 415

Mass. 337 (1993), is misplaced.   In both cases, the courts found

that flat, unapportioned user fees imposed on trucking companies

for the use of State roads placed an impermissible burden on

interstate trucking companies that were potentially required to

pay similar fees in multiple jurisdictions, whereas their purely

intrastate competitors would have only one fee to pay.     See

American Trucking Ass'ns, Inc., 483 U.S. at 284-285; American

Trucking Ass'ns, Inc., 415 Mass. at 345.   Regency believes that

the use tax similarly discriminates against interstate commerce

because, when broken down by cost per mile, the result is that

Regency bears a heavier burden than other interstate carriers

not subject to the Massachusetts use tax and intrastate carriers

traveling only in Massachusetts, rendering the tax

unconstitutional.

    This argument misconstrues the courts' decisions in the

American Trucking Ass'ns cases.   First, the fees in both cases

were flat fees imposed solely for the use of the roads.     See

American Trucking Ass'ns, Inc., 483 U.S. at 273, 283-284;

American Trucking Ass'ns, Inc., 415 Mass. at 339-340.     As we

have emphasized throughout this decision, the use tax is not a

tax on the use of the Commonwealth's roads, but rather on the
                                                                    19


privilege of using and storing the tractors and trailers in the

State.   Thus, "miles traveled within the State simply are not a

relevant proxy for the benefit conferred upon the parties[']

[use and storage]" of the fleet within Massachusetts.     Jefferson

Lines, Inc., 514 U.S. at 199.

    Second, in the American Trucking Ass'ns cases, the courts

found that the flat fee was internally inconsistent in violation

of the commerce clause because taxpayers were potentially

subject to the same tax in multiple jurisdictions, which

resulted in the additional cost per mile for interstate

carriers.   See American Trucking Ass'ns, Inc., 483 U.S. at 284-

285; American Trucking Ass'ns, Inc., 415 Mass. at 345-346.     As

discussed supra, the use tax is internally consistent because of

the exemptions provided in G. L. c. 64I, § 7 (c), and 830 Code

Mass. Regs. § 64H.25.1(7)(g) and (h).   For these reasons,

Regency's reliance on these cases is inapposite.

    We also reject Regency's position that because

Massachusetts chooses to tax an activity that other States do

not, the tax is discriminatory.   Regency urges us to consider

"not the formal language of the tax statute but rather its

practical effect."   Comptroller of Treasury of Md., 135 S. Ct.

at 1795, quoting Complete Auto, 430 U.S. at 279.   In doing so,

we agree with the board, and not Regency, that "[d]iscrimination

results when a [S]tate subjects taxpayers doing business outside
                                                                     20


of the [S]tate to disparate tax treatment from those based

inside the [S]tate, not when a [S]tate subjects all taxpayers to

tax on a transaction that another [S]tate may exempt."      "The

adverse economic impact in dollars and cents upon a participant

in interstate commerce for crossing a [S]tate boundary and thus

becoming subject to another State's taxing jurisdiction is

neither necessary to establish a commerce clause violation . . .

nor [is it] sufficient" (citations omitted).     American Trucking

Assn's, Inc., 483 U.S. at 283, n.15.5    Regency "seeks to use the

commerce clause of the United States Constitution not as

protection against multiple or discriminatory taxation, but as

an escape from any taxation at all.     This the Constitution does

not permit."   M & T Charters, Inc., 404 Mass. at 143-44.

     c.   Relation to State services.    The final prong of the

Complete Auto test requires that the use tax be "fairly related"

to the services provided by the State.     Regency again invokes

its argument that because the use tax is not apportioned based

on miles traveled in the Commonwealth, the measure of the use

     5
       Nor do we agree with Regency's assertion that the statute
and regulations give the commissioner unfettered authority to
assess the use tax on all interstate tractors and trailers
brought into the Commonwealth. Such a result is contrary to the
plain language of G. L. c. 64I, § 7, and 830 Code Mass. Regs.
§ 64H.25.1(7)(c), (g), and (h). Not only may a party rebut the
presumption that it is bringing a vehicle into the Commonwealth
for storage, use, or other consumption, it is also exempted from
the use tax where it has already paid a sales or use tax to
another State and otherwise meets the statutory requirements for
the exemption.
                                                                     21


tax imposed cannot bear a reasonable relation to the services

provided to it by the State.     This argument fails, however,

because the commerce clause does not require such an exacting

measurement.     The fair relation prong

    "requires no detailed accounting of the services provided
    to the taxpayer on account of the activity being taxed,
    nor, indeed, is a State limited to offsetting the public
    costs created by the taxed activity . . . [rather] Complete
    Auto's fourth criterion asks only that the measure of the
    tax be reasonably related to the taxpayer's presence or
    activities in the State."

Jefferson Lines, Inc., 514 U.S. at 199-200.

    Thus, the tax need not relate directly to the interstate

activity at issue, that is, driving the trucks; rather, the

strictures of the commerce clause are satisfied where the

taxpayer receives "police and fire protection, the use of public

roads and mass transit, and the other advantages of civilized

society."     Goldberg, 488 U.S. at 267, citing D.H. Holmes Co.,

486 U.S. at 32.     See Towle v. Commissioner of Revenue, 397 Mass.

599, 606 (1986); George S. Carrington Co., 375 Mass. at 553-554

(1978).     Regency is incorporated and headquartered in

Massachusetts.     The majority of its workforce is employed here.

It also uses, stores, and maintains its vehicles in the

Commonwealth.     Given the nature and extent of Regency's

activities in the Commonwealth, and the benefits it receives

consonant with its presence here, we conclude the tax is fairly

related to Regency's activities in the Commonwealth.
                                                                 22


    Conclusion.   Based on the foregoing analysis, we conclude

that the motor vehicle use tax, G. L. c. 64I, § 2, meets the

requirements of the Complete Auto test and therefore does not

violate the commerce clause.   On account of Regency's use and

storage of its trucking fleet in the Commonwealth, the

Commonwealth may require Regency to "pay its way," and the

Commonwealth's method of doing so is well within the bounds of

the commerce clause.   Accordingly, we affirm the decision of the

board.

                                    So ordered.
