Global Companies, LLC v. Commissioner of Revenue (May 27, 2009)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


GLOBAL COMPANIES, LLC	 v.	     COMMISSIONER OF REVENUE


Docket No. C283764				Promulgated:
        						May 27, 2009


	This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 62C, § 39, from the refusal of the Commissioner of Revenue ("Commissioner" or "appellee") to abate sales tax assessed to the appellant, Global Companies, LLC ("Global" or "appellant") under G.L. c. 64H, § 2 for the monthly periods beginning July 1, 2002 and ending July 31, 2005 ("periods at issue").
	Commissioner Scharaffa heard the appeal and was joined in the decision for the appellee by Chairman Hammond and Commissioners Egan, Rose and Mulhern.  
	These findings of fact and report are made pursuant to requests by the appellant and appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.  

	William E. Halmkin, Esq., Judith G. Edington, Esq., Jill Tenley Oldak, Esq. and Sarah Dawn Wellings, Esq. for the appellant.

	Frances M. Donovan, Esq. and Timothy R. Stille, Esq. for the appellee.  

			FINDINGS OF FACT AND REPORT
 On the basis of a Statement of Agreed Facts and the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.  At all times relevant to this appeal, Global was a Massachusetts limited liability company with its principal place of business in Waltham.  Global operated a diversified petroleum and energy marketing business which served a broad range of commercial and industrial clients throughout the United States and overseas.  
During the periods at issue, Global timely filed its monthly sales tax returns.  On August 17, 2005, Global timely filed Applications for Abatement with the Commissioner, requesting an abatement of sales tax for the periods at issue.  By Notice of Abatement Determination dated March 20, 2006, the Commissioner denied the appellant's abatement applications for the periods at issue.  On May 17, 2006, Global timely filed its Petition Under Formal Procedure with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal.
During the periods at issue, Hyannis Harbor Tours, Inc. ("Hy-Line") was a Massachusetts corporation with a principal place of business in Hyannis.  Hy-Line was primarily engaged in the business of providing passenger ferry service between Hyannis and Nantucket or Martha's Vineyard (collectively, "the islands"), as well as between the islands.  Hy-Line was licensed by the Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority ("Steamship Authority") to provide passenger ferry service.  Hy-Line was not licensed by the Steamship Authority or any other entity to transport automobiles or other freight between Hyannis and the islands.  
According to the stipulated evidence, Hy-Line's fleet included seven vessels, which provided ferry service as summarized in the following table:

Vessel 	Passenger 
Ferry Service 	
Grey Lady	To/From Nantucket	
Lady Martha	To/From Martha's Vineyard	
Great Point	To/From Nantucket	
Brant Point	To/From Nantucket and 
Martha's Vineyard	
Cross Rip	Inter Island	
East Chop	To/From Martha's Vineyard	
Point Gammon	To/From Martha's Vineyard and Inter Island	

During the periods at issue, Hy-Line offered year-round daily passenger service to and from Nantucket, but offered daily passenger service to and from Martha's Vineyard and between the islands only on a seasonal basis.  Certain vessels made numerous trips daily, while others made a single round trip per day.  
Throughout the periods at issue, Hy-Line purchased fuel for its vessels exclusively from the appellant, Global, on nearly a daily basis, and the sales tax imposed by G.L. c. 64H, § 2 was charged on those fuel sales.  
In this appeal, Global, as the vendor, sought an abatement of the sales tax paid by Hy-Line on the basis   that Hy-Line's fuel purchases were exempt under  G.L. c. 64H, §(6)(o) ("§(6)(o)"), which provides an exemption from the sales tax for "sales of fuel... to vessels engaged in foreign and interstate commerce."  The sole issue presented in this appeal was whether Hy-Line's vessels  "engaged in foreign and interstate commerce" when they provided passenger ferry service from Hyannis to and between the islands.  The appellant argued that Hy-Line's vessels engaged in foreign and interstate commerce, as those terms are understood in the context of the Commerce Clause of the United States Constitution ("Commerce Clause") because they regularly provided passenger service to out-of-state and foreign tourists and, in so doing, formed an integral part of the nation's transportation network.  The appellant also contended that Hy-Line's vessels engaged in foreign and interstate commerce because they travelled outside of Massachusetts waters and into federal and international waters when they transported passengers from Hyannis to and between the islands.  
In support of these arguments, the appellant offered the testimony of numerous witnesses, including: Philip Scudder, Hy-Line's Vice President and Director of Marketing; Tracy Bakalar, Executive Director of the Nantucket Island Chamber of Commerce; Wendy Northcross, Chief Executive Office of the Cape Cod Chamber of Commerce; Richard M. Scudder, Vice President and Head of Operations of Hy-Line; and Mark Joseph, Treasurer and Controller of Hy-Line.
Ms. Northcross testified that approximately 60% of visitors to Cape Cod were out-of-state and foreign tourists and that tourism was Cape Cod's number one industry.  Ms. Northcross stated that many of the inquiries coming into the Cape Cod Chamber of Commerce involved questions regarding travel to the islands, which she described as major tourist attractions.
Similarly, Ms. Bakalar testified that approximately 75% of annual visitors to Nantucket are out-of-state and foreign tourists and that tourism was Nantucket's leading industry. Further, Ms. Bakalar testified that approximately 40,000 travelers visited Nantucket during the peak season of May through October ("peak season") each year and that Hy-Line was one of only two private, licensed providers of ferry service to the islands.   Ms. Bakalar opined that the Steamship Authority alone could not accommodate that volume of passengers and that Hy-Line therefore provided an essential transportation service.  
Because the evidence established that many out-of-state and foreign tourists visit the islands each year, and because the islands can be reached only by boat or plane and Hy-Line was one of the few providers of ferry service to the islands, the Board drew the inference that Hy-Line's passengers included out-of-state and foreign tourists.
In addition, Philip Scudder testified that approximately 60% of Hy-Line's passengers were non-Massachusetts residents.   He testified that this estimate was based on his 32 years of employment with Hy-Line.  He further stated that from year to year the composition of Hy-Line's passengers remained fairly consistent.  
Philip Scudder's opinion was also based on information that Hy-Line gathered from various sources for marketing purposes.  He testified that it was Hy-Line's practice to distribute random passenger surveys on each vessel during the peak season but not during the off-season.  Among the information requested on the surveys was each passenger's home address.  According to Philip Scudder, Hy-Line used the surveys to make advertising and marketing decisions such as where to advertise.  As a result of the information gathered from the surveys, Hy-Line purchased television and print advertising in various New England states.   
The appellant introduced into evidence summaries of the on-board surveys conducted in 2005 and 2006 ("2005 survey" and "2006 survey," respectively).  The appellant also offered into evidence a summary of data gathered from its on-line ticket sales ("web bookings summary").  The 2005 survey, the 2006 survey and the web bookings summary (collectively, "the summaries")  contained data showing that a significant percentage of Hy-Line's passengers were out-of-state and foreign tourists.  
The Board found the summaries - taken together with the uncontroverted testimony of Ms. Northcross, Ms. Bakalar and Philip Scudder - to be probative evidence that Hy-Line's passengers included many out-of-state and foreign tourists.  The summaries contained information gathered just after the periods at issue in this appeal and there was no evidence in the record which suggested that the passenger composition would have changed markedly in such a short time.  Moreover, Philip Scudder testified that the profile of Hy-Line's passengers remained consistent from year to year.  Based on all of the evidence, and in the absence of any evidence to the contrary, the Board found that Hy-Line's passengers regularly included out-of-state and foreign tourists during the periods at issue.  
In further support of its claim that Hy-Line's vessels engaged in foreign and interstate commerce, the appellant offered testimony and documentary evidence which purportedly established that the routes travelled by Hy-Line's vessels between Hyannis and the islands required voyage into federal and international waters.  In particular, the appellant offered the testimony of Richard Scudder, Hy-Line's Vice President and Head of Operations.  
Richard Scudder testified that the routes used by Hy-Line to transport passengers from Hyannis to the islands required its vessels to leave the territorial waters of Massachusetts and briefly enter into federal waters before re-entering Massachusetts waters.  He testified that Massachusetts territorial waters extend to only three miles from land - mainland or island - and that the waters beyond that point are federal waters.  Further, Stipulated Exhibit Number 13 was a chart of Nantucket Sound prepared by the National Oceanic and Atmospheric Administration ("Nantucket Sound chart").  The Nantucket Sound chart delineated the three-mile line where state waters end and federal waters begin.  The Nantucket Sound chart further delineated the routes used by Hy-Line's vessels in travelling between Hyannis and the islands and between the islands.  Each route crossed the three-mile territorial line.  However, nothing on the Nantucket Sound chart or in Richard Scudder's testimony indicated that Hy-Line's routes traversed into international waters.  In fact, Richard Scudder expressly denied having any knowledge that Hy-Line's vessels entered into such waters.  On the basis of this evidence, the Board found that Hy-Line's vessels briefly entered into federal waters on their voyages but did not enter into international waters.  
On the basis of all of the evidence, the Board found that Hy-Line's vessels commenced their voyages in Massachusetts and concluded their voyages in Massachusetts without entering into the territory of another state or country.  Hy-Line transported passengers from Hyannis to the islands and between the islands and therefore the Board found as a fact that Hy-Line's vessels did not engage in "foreign and interstate commerce" for the purpose of the exemption in § 6(o).  Further, the Board found that the brief passage of Hy-Line's vessels into federal waters did not transform Hy-Line's purely intrastate activities into foreign or interstate commerce.  Accordingly, the Board determined that the fuel sales at issue were not exempt from the sales tax and issued a decision for the appellee in this appeal.
   
        OPINION
I.	Hy-Line Transported Passengers from Points in   Massachusetts to Other Points in Massachusetts and     Therefore its Vessels were not Engaged in "Foreign and Interstate Commerce"

This appeal presents a single issue: whether Hy-Line's vessels "engaged in foreign and interstate commerce" for the purpose of the exemption in § 6(o).  On the basis of all of the evidence, the Board found that the phrase "engaged in foreign and interstate commerce" was ill-suited to describe the travels of Hy-Line's vessels between and among purely Massachusetts destinations.  
It was undisputed that Hy-Line's voyages began and ended at points within the Commonwealth and made no intervening stops.  Hy-Line's vessels ferried passengers from Hyannis to the islands and back or between the islands.  Hy-Line's vessels did not ferry passengers between states or countries or in any other way involve or connect two or more states or countries.  Based on these facts and the plain language of the statute, the Board found and ruled that Hy-Line's vessels did not engage in "foreign and interstate commerce."
The appellant's primary contention was that Hy-Line's vessels engaged in "foreign and interstate commerce," as those terms have been construed for the purposes of the Commerce Clause, because they provided ferry services which were an important part of the nation's transportation network and because Hy-Line's passengers - many of whom were out-of-state and foreign tourists - were completing a leg of their interstate and foreign journeys when they travelled on Hy-Line's vessels.  This argument fails, however, for a multitude of reasons.
First, the Board found that the fact that Hy-Line may have provided essential transportation services had no bearing on whether those services involved interstate or foreign commerce.  More importantly, this argument fundamentally misconstrues the relevant statutory language.  Section 6(o) exempts "sales of fuel... to vessels engaged in foreign and interstate commerce."  The statutory language is focused on the activities of the vessels, not the activities of their passengers.  
Although a number of Hy-Line's passengers may have travelled into Massachusetts before embarking on Hy-Line's vessels, there was no evidence in the record that Hy-Line's vessels were involved in transporting them into Massachusetts.  After their arrival in Massachusetts their interactions with Hy-Line did not involve interstate or foreign commerce, but instead were "as clearly domestic transactions as are sales by grocers or by any other retail dealers from local stocks of goods."  H.P. Hood & Sons v. Commonwealth, 235 Mass. 572, 577 (1920).  
"[M]ovement [that is interstate commerce movement] does not begin until the articles have been shipped or started for transportation from one State to the other."  Judson Freight Forwarding Company v. Commonwealth, 242 Mass. 47, 56-7 (1922).  Hy-Line did not transport its passengers between different states or foreign nations, and the Board therefore found and ruled that its vessels were not engaged in foreign or interstate commerce.  Any other characterization of Hy-Line's activities would "leave no sound principle [to] prevent the same immunity from attaching to every domestic retail dealer in respect of goods which in any stage... have been transported in interstate commerce."  H.P. Hood & Sons, 235 Mass. at 577.  
Moreover, the Board rejected the notion that Commerce Clause jurisprudence was an appropriate tool with which to construe the terms of G.L. c. 64H.  The Commerce Clause, by express grant, gives Congress the authority to "regulate commerce with foreign nations, and among the several states, and with the Indian tribes."  U.S. Const. art. 1, § 8, cl. 3.  By negative implication, the Commerce Clause prohibits Congress from legislating matters purely local to the states and prohibits the states from enacting laws which burden interstate and foreign commerce. See Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 571 (1997).  
The Commerce Clause is concerned with Congress' ability to ensure the free flow of trade and commerce between and among the states and foreign nations.  Thus, courts construing the terms "foreign and interstate commerce" for the purposes of the Commerce Clause have construed them broadly, so as not to limit Congress's power.  "The power of Congress over interstate commerce is not confined to the regulation of commerce among the states.  It extends to those activities... [that]... affect interstate commerce or the exercise of the power of Congress over it." United States v. Darby, 312 U.S. 100, 118 (1941) (citing McCulloch v. Maryland, 4 Wheat. 316, 421) (other citations omitted); see also Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 243 (1964). 
However, a broad construction of the terms "foreign and interstate commerce" is not warranted when the case at bar does not involve a constitutional claim.  For this reason, in a case involving facts nearly identical to those of the present appeal, a Maine court declined to apply the Commerce Clause meaning of the terms "interstate or foreign commerce" in the context of a state use tax exemption.  See Brent Leasing Company, Inc. v. State Tax Assessor, No. AP-97-061 2000 Me. Super. LEXIS 116, *6-7 (Me. Super. Ct. June 6, 2000), aff'd in relevant part, 2001 ME. 90 (2001).  In that case, the taxpayer purchased a vessel, the Friendship IV, in Massachusetts and subsequently brought it to Maine for the purpose of conducting whale watching and other nature cruises.  Brent Leasing Company, 2000 Me. Super. at *2.  Each cruise departed from and returned to Bar Harbor, Maine, without making intervening stops.  Id. at *3.  The taxpayer challenged the assessment of use tax on the vessel, because of a statutory exemption for "watercraft... placed in use by the purchaser as an instrumentality of interstate or foreign commerce..[.]"  36 M.R.S.A. § 1760(41).  
The taxpayer in Brent Leasing Company urged the court to find that it was engaged in interstate or foreign commerce because, it argued, those terms should be construed broadly, as they are for the purposes of the Commerce Clause.  However, the court was "unpersuaded that a proper standard of consideration of 'interstate or foreign commerce' should be governed by interpretation of Federal U.S. Constitution law under the commerce clause or that transportation which simply enters another state or international waters constitute[s] interstate commerce."  Id. at *6.  
Like the court in Brent Leasing Company, the Board in the instant appeal found that Commerce Clause jurisprudence was an unsuitable tool with which to construe the terms of G.L. c. 64H.  The touchstone of a Commerce Clause case is whether something "affects" foreign or interstate commerce.  A determination that something affects interstate or foreign commerce does not resolve the issue of whether a particular taxpayer is "engaged in foreign and interstate commerce."  In fact, the Board found that the phrase "affects foreign and interstate commerce" casts a much wider net than the more narrow phrase "engaged in foreign and interstate commerce" used in § 6(o).  The United States Supreme Court reached a similar conclusion in Circuit City Stores, Inc. v. Saint Clair Adams, 532 U.S. 105, 112 (2001).  In that case, the Court declined to apply the Commerce Clause meaning of the terms "foreign or interstate commerce" in the context the Federal Arbitration Act ("FAA").  The FAA expressly exempted from its scope "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."  The Court ruled that "the phrase 'affecting commerce' indicates Congress' intent to regulate to the outer limits of its authority under the Commerce Clause... Unlike [that phrase], however, the general words 'in commerce' and the specific phrase 'engaged in commerce' are understood to have a more limited reach."  Id. at 115, (citing United States v. American Building Maintenance Industries, 422 U.S. 271, 279-80 (1975)) (holding that the phrase "engaged in commerce" is a "term of art, indicating a limited assertion of federal jurisdiction.") (other citations omitted).  
Indeed, the Board found that the phrase "affects foreign and interstate commerce" is not synonymous with the phrase "engaged in foreign and interstate commerce", a point well-illustrated by United States Glue Company v. Town of Oak Creek, 247 U.S. 321 (1918).  In that case, the taxpayer, a Wisconsin manufacturer which sold its products within Wisconsin and throughout the United States, alleged that a state tax on income derived from goods manufactured in its factory and sold to customers outside of the state imposed a burden upon interstate commerce in violation of the Commerce Clause.  Id. at 325.  However, the Court held that the tax did not violate the Commerce Clause, as it was just "one of the ordinary and general burdens of government, from which persons and corporations otherwise subject to the jurisdiction of the States are not exempted by the Federal Constitution because they happen to be engaged in commerce among the States."  Id. at 329. 
Though the taxpayer in United States Glue Company was indisputably engaged in interstate commerce, the tax at issue did not so affect interstate commerce as to violate the Commerce Clause.  Conversely, in the instant appeal, even if Hy-Line's vessels somehow "affected foreign and interstate commerce," the evidence of record did not establish that Hy-Line's vessels "engaged in foreign and interstate commerce."  
Because Hy-Line did not transport passengers between points in different states or foreign countries, the Board found and ruled that its vessels did not engage in "foreign and interstate commerce."  The Board therefore found and ruled that the fuel sales at issue were not exempt under § 6(o).  
II. The Brief Passage of Hy-Line's Vessels into       Federal Waters did not Amount to Foreign or       Interstate Commerce

	The appellant additionally argued that Hy-Line's vessels "engaged in foreign and interstate commerce" because they entered into federal waters en route to the islands and, therefore, their journeys were not conducted within the exclusive territory of Massachusetts. Based on the evidence of record, the Board found that the routes travelled by Hy-Line's vessels required them to traverse beyond the three-mile line delineating Massachusetts territorial waters and enter briefly into federal waters.  However, the Board found and ruled that the brief passage of Hy-Line's vessels into federal waters did not change the intrastate nature of Hy-Line's business.
	In Lehigh Valley Railroad Company v. Pennsylvania, 145 U.S. 192, 202 (1892), the Supreme Court considered the question of whether "in the carriage of freight and passengers between two points in one State, the mere passage over the soil of another State renders that business foreign."  The Court answered that question in the negative.  
In that case, the taxpayer railroad company provided freight and passenger transportation from Mauch Chunk, Pennsylvania to the city of Philadelphia.  In providing this transport, the railroad's route crossed out of Pennsylvania and into New Jersey, before re-entering Pennsylvania to arrive at its terminus in Philadelphia.  Id. at 200.  The taxpayer challenged Pennsylvania's assessment of a tax upon the gross receipts derived from this activity on the ground that it violated the Commerce Clause.  The Court noted that "there was no breaking of bulk or transfer of passengers in New Jersey.  The point of departure and the point of arrival were alike in Pennsylvania.  The intercourse was between those points and not between any other points," and the Court ultimately concluded that regardless of the "particular way in which Philadelphia was reached from Mauch Chunk,"  the railroad's activities did not constitute foreign or interstate commerce.  Id. at 201-02.
	In the instant appeal, as in Lehigh Valley Railroad Company, Hy-Line's vessels began and ended their journeys at points in Massachusetts.  The fact that Hy-Line's vessels briefly traversed federal waters in their routes did not transform the nature of the commerce involved, which was the intrastate transport of passengers.  The passengers could not embark or disembark in federal waters.  Rather, the passengers could only embark and disembark at points located in Massachusetts.  Though Hy-Line's vessels briefly entered into and left federal waters, there was no "intercourse" conducted therein.  Id. at 201-02.  Accordingly, the Board found and ruled that Hy-Line's vessels did not engage in "foreign and interstate commerce" merely because they passed through federal waters.  
	The foundation of the Court's decision in Lehigh Valley Railroad Company rested on the distinction between state regulations affecting interstate commerce and state taxes imposed upon income derived from interstate commerce.  
The conflict between the commercial regulations of the several States was destructive to their harmony and fatal to their commercial interests abroad, and this was the mischief intended to be obviated by the grant to Congress of the power to regulate commerce with foreign nations and among the States.  But, as was said by Chief Justice Marshall, the words of the grant do not embrace that commerce which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to nor affect other States... Taxation is undoubtedly one of the forms of regulation, but the power of each State to tax its own internal commerce... has always been recognized... [a]nd while interstate commerce cannot be regulated by a State by the laying of taxes thereon... whenever the subjects of taxation can be separated so that which arises from interstate commerce can be distinguished from that which arises from commerce wholly within the State, the distinction will be acted upon by the courts, and the State permitted to collect [the tax].

	Id. at 200-01.  

The distinction made by the Court in Lehigh Valley Railroad Company more than a century ago has been consistently recognized by courts which have considered the issue since that time.  It was for this reason that many of the cases cited by the appellant in support of its claim for the exemption at issue ultimately did not provide that support.  Though the appellant cited a litany of cases for the proposition that the terms "foreign and interstate commerce" should be given a broad construction, as they are under the Commerce Clause, most of the cases relied on by the appellant involved constitutional claims unrelated to taxes. The appellant did not raise a constitutional issue in this appeal and the cases cited by the appellant were simply inapposite.  See, e.g., Hanley v. Kansas City Southern Railway Company, 182 U.S. 617 (1902); Conlin Bus Lines, Inc. v. Old Colony Coach Lines, Inc., 282 Mass. 498 (1933);  Lord v. Steamship Company, 102 U.S. 541 (1880).   
A "[s]tate tax is valid under the commerce clause if the tax 'is applied to an activity with a substantial nexus with the taxing State, is fairly apportioned,  does not discriminate against interstate commerce, and is fairly related to the services provided by the State.'" George S. Carrington Co. v. State Tax Commission, 375 Mass. 549, 552 (1978) (quoting Complete Auto Transit v. Brady, 430 U.S. 274, 279 (1977)).  In the instant appeal, the appellant offered no evidence showing that the sales tax at issue failed any of these tests.  The transactions giving rise to the sales tax at issue took place between two Massachusetts companies, and the Board found and ruled that the imposition of the tax did not discriminate against - or even involve - interstate commerce.  
On the basis of all of the evidence, the Board found and ruled that Hy-Line's vessels transported passengers from points in Massachusetts to other points in Massachusetts.  The Board therefore found and ruled that Hy-Line's vessels did not engage in "foreign and interstate commerce" and that the fuel sales at issue were not exempt under § 6(o).  
Accordingly, the Board issued a decision for the appellee in this appeal.		

  APPELLATE TAX BOARD




		  		   By: 				_____	____
  Thomas W. Hammond, Jr., Chairman


A true copy,

Attest:		______	_____		
	        Clerk of the Board

 The Lady Martha was formerly known as the Grey Lady II.  
 The appellant did not argue that the imposition of the sales tax at issue violated the Commerce Clause nor did it present any evidence showing that the sales tax at issue discriminated against interstate commerce.  Because there was no evidence in the record that the sales tax at issue discriminated against interstate commerce, the Board found and ruled that it did not discriminate against interstate commerce.  
 At the hearing of this appeal, the Commissioner raised numerous objections to the admission of the summaries on the basis that they were unreliable hearsay evidence and the Board overruled those objections.  The Commissioner's objections appeared to focus on whether the summaries presented reliable evidence of the percentage of Hy-Line's out-of-state and foreign passengers during the periods at issue.  However, the Board did not rely on the summaries for evidence of the exact percentage of out-of-state and foreign travelers making use of Hy-Line's vessels.  Rather, it relied on the summaries only as further evidence that Hy-Line's passengers included out-of-state and foreign tourists.  
  
 "The marine boundary of the Commonwealth extends three geographical miles from shore."  Massachusetts Bay Lines, Inc. v. Commissioner of Revenue, 72 Mass. App. 321, 323 (2008) (citing 43 U.S.C. § 1312 (2000)).  
 International waters are those waters beyond the twelve nautical mile territorial sea boundary.  See 33 CFR 2.22.  
  The American Heritage College Dictionary defines the term "interstate" as "[i]nvolving, existing between, or connecting two or more states." The american heritage college dictionary, 711 (3rd Ed. 1997).   
 The appellant also contended that Hy-Line's vessels were engaged in foreign commerce because they entered into international waters.  However, as discussed above, the Board found and ruled that the evidence of record did not support a finding that Hy-Line's vessels entered into international waters and the Board rejected the argument that Hy-Line's vessels were engaged in foreign commerce.  
 In fact, the courts in both Hanley and in Conlin Bus Lines limited their holdings to the state regulations at issue, and expressly differentiated the cases at issue from cases involving the imposition of a tax.  See Hanley, 182 U.S. at 621; Conlin Bus Lines, 282 Mass. at 505.  

ATB 2009-585