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for preferential treatment of beverages that were manufactured from certain "Florida-grown" citrus and other agricultural crops and then bottled in state. See, e. g., Fla. Stat. §§ 564.02, 564.06, 565.12, 565.14 (1983). After this Court held in Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984), that a similar preference scheme employed by the State of Hawaii violated the Commerce Clause1 (because it had both the purpose and effect of discriminating in favor of local products), the Florida Legislature revised its excise tax scheme and enacted the statutory provisions at issue in this litigation. See Fla. Stat. §§ 564.06, 565.12 (1989) (hereafter Liquor Tax). The legislature deleted the previous express preferences for “Florida-grown" products and replaced them with special rate reductions for certain specified citrus, grape, and sugarcane products, all of which are commonly grown in Florida and used in alcoholic beverages produced there.2

Petitioner McKesson Corporation is a licensed wholesale distributor of alcoholic beverages whose products did not qualify for the rate reductions.3 Petitioner paid the appli

1 "The Congress shall have Power . . . To regulate Commerce . . . among the several States." U. S. Const., Art. I, §8, cl. 3.

2 Under the Liquor Tax, the tax rate for each of several categories of preferred products is calculated according to a sliding scale. The rate varies directly with the total volume of such products sold by all distributors during the preceding month. If the volume of preferred products sold within any category is low, the tax rate is very favorable compared to the generally applicable rate for nonpreferred products. Conversely, at a relatively high volume of sales, the tax rate for preferred products equals the nonpreferred rate.

The Liquor Tax also contains "retaliation" provisions which declare that the rate reductions applicable to the preferred products do not apply when they are imported from a State that imposes discriminatory taxes or provides agricultural price supports or export subsidies benefiting its own locally produced alcoholic beverages. Fla. Stat. §§ 564.06(9), 565.12(1)(c), 565.12(2)(c) (1989).

3

Florida law divides traffic in alcoholic beverages into three tiers: (1) manufacture or importation; (2) wholesale distribution; and (3) retail sales. § 561.14. Manufacturers may not sell directly to retail dealers, and dis

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cable taxes every month as required after the revised Liquor Tax went into effect, but in June 1986, petitioner filed an application with the Florida Office of the Comptroller seeking a refund on the ground that the tax scheme was unlawful. In September, after the Comptroller denied its application, petitioner (along with other distributors not present here) brought suit in Florida state court against respondents Division of Alcoholic Beverages and Tobacco, Department of Business Regulation, and Office of the Comptroller. Petitioner challenged the constitutionality of the tax under the Commerce Clause as well as under various other provisions of the United States and Florida Constitutions, and petitioner sought both declaratory and injunctive relief against the continued enforcement of the discriminatory tax scheme. Pursuant to Florida's "Repayment of Funds" statute, which provides for a refund of "[a]n overpayment of any tax, license or account due" and "[a]ny payment made into the State Treasury in error," §§ 215.26(1)(a), (c), and in apparent compliance with the statutory requisites for preserving a claim thereunder, petitioner also sought a refund in the amount of

tributors therefore serve as necessary intermediaries. The State places the legal incidence of the excise taxes on distributors, who must remit the taxes monthly. Distributors may choose to sell beverage products receiving the tax preferences, nonpreferred products, or both. §§ 561.50, 561.506, 565.13.

The record is unclear whether and how, prior to petitioner's refund application to the Comptroller in September 1986, petitioner protested its tax payments or otherwise put the State on notice of its position that the Liquor Tax was unconstitutional. It appears, however, that Florida law does not require a taxpayer to pay under protest in order to preserve the right to challenge a remittance in a postpayment refund action, as long as the action is initiated within the applicable limitations period. See § 215.26 (2) (generally applicable 3-year limitations period for refund actions containing no protest requirement); Miami v. Florida Retail Federation, Inc., 423 So. 2d 991, 993 (Fla. App. 1982) (“[T]he involuntary payment of an invalid tax, which has been promulgated without an authorized procedure for protest, presents no bar to recovery by a taxpayer who has paid without protest"). We assume for present purposes that petitioner satisfied

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the excess taxes it had paid as a result of its disfavored treatment.

On petitioner's motion for partial summary judgment, the Florida trial court invalidated the discriminatory tax scheme on Commerce Clause grounds because the revised "legislation failed to surmount the constitutional violations addressed in Bacchus [Imports, supra]." App. 263. The trial court enjoined future enforcement of the preferential rate reductions, leaving all distributors subject to the Liquor Tax's nonpreferred rates. The court, however, declined to order a refund or any other form of relief for the taxes previously paid and timely challenged under the discriminatory scheme. The court's order of prospective relief was stayed pending respondents' appeal of the Commerce Clause ruling to the Florida Supreme Court.5

Petitioner McKesson cross-appealed the trial court's ruling, arguing that as a matter of both federal and state law it was entitled at least to "a refund of the difference between the disfavored product's tax rate and the favored product's tax rate." 524 So. 2d 1000, 1009 (1988). The State Supreme

whatever protest requirements might exist, though as we explain, infra, at 45, upon remand the State may invoke, as an independent basis for refusing to provide a refund, petitioner's failure to comply with a notice requirement that was in effect at the time of petitioner's tax payments.

5 The appeal and cross-appeal were certified directly to the Florida Supreme Court by the District Court of Appeal.

The State's immediate filing of its Notice of Appeal automatically stayed the trial court's order. Fla. Rule App. Proc. 9.310(b)(2). Petitioner requested the trial court to vacate the stay, arguing that continued enforcement of the unconstitutional tax scheme pending State Supreme Court review would continue to expose Florida's treasury to claims for tax refunds. After a hearing, the trial court denied the motion. Pending the State Supreme Court's final decision, therefore, respondents continued to collect taxes under the Liquor Tax with the unconstitutional preferences still in effect.

Hence, in this case petitioner contests the validity of the taxes it paid from July 1985 until the State Supreme Court's final decision was given effect in February 1988 (the contested tax period).

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Court affirmed the trial court's ruling that the Liquor Tax unconstitutionally discriminated against interstate commerce and upheld the trial court's order that the preferential rate reductions be given no future operative effect. The Supreme Court also affirmed the trial court's refusal to order a tax refund, declaring that "the prospective nature of the rulings below was proper in light of the equitable considerations present in this case." Id., at 1010. The court noted that the Division of Alcoholic Beverages and Tobacco had collected the Liquor Tax in "good faith reliance on a presumptively valid statute." Ibid. Moreover, the court suggested that, "if given a refund, [petitioner] would in all probability receive a windfall, since the cost of the tax has likely been passed on to [its] customers." Ibid.

After petitioner's request for rehearing was denied, petitioner filed a petition for writ of certiorari in this Court, presenting the question whether federal law entitles it to a partial tax refund. We granted the petition, 488 U. S. 954 (1988), and consolidated the case with American Trucking Assns., Inc. v. Smith, No. 88-325, which we also decide today." Post, p. 167.

II

Respondents first ask us to hold that, though the Florida courts accepted jurisdiction over this suit which sought monetary relief from various state entities, the Eleventh Amendment nevertheless precludes our exercise of appellate jurisdiction in this case. We reject respondents' suggestion. Almost 170 years ago, Chief Justice Marshall, writing for the Court, rejected a State's Eleventh Amendment challenge to

6 Both cases were argued in October Term 1988 and then reargued in October Term 1989 after supplemental briefing was requested. 492 U. S. 915 (1989).

7"The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U. S. Const., Amdt. 11.

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this Court's power on writ of error to review the judgment of a state court involving an issue of federal law. See Cohens v. Virginia, 6 Wheat. 264, 412 (1821). Although Cohens involved a proceeding commenced in the first instance by the State itself against a citizen, such that the Court's holding might be read as limited to that circumstance, the decision has long been understood as supporting a broader proposition: "[I]t was long ago settled that a writ of error to review the final judgment of a state court, even when a State is a formal party [defendant] and is successful in the inferior court, is not a suit within the meaning of the Amendment." General Oil Co. v. Crain, 209 U. S. 211, 233 (1908) (Harlan, J., concurring); see also Charles River Bridge v. Warren Bridge, 11 Pet. 420, 585 (1837) (Story, J., dissenting). Our consistent practice since Cohens confirms this broader understanding. We have repeatedly and without question accepted jurisdiction to review issues of federal law arising in suits brought against States in state court; indeed, we frequently have entertained cases analogous to this one, where a taxpayer who had brought a refund action in state court against the State asked us to reverse an adverse state judicial decision premised upon federal law.

8

See, e. g., Davis v. Michigan Dept. of Treasury, 489 U. S. 803 (1989); Texas Monthly, Inc. v. Bullock, 489 U. S. 1 (1989); Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 U. S. 232 (1987); Arkansas Writers' Project, Inc. v. Ragland, 481 U. S. 221 (1987); Williams v. Vermont, 472 U. S. 14 (1985); Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984); Aloha Airlines, Inc. v. Director of Taxation of Hawaii, 464 U. S. 7 (1983); Exxon Corp. v. Eagerton, 462 U. S. 176 (1983); Central Machinery Co. v. Arizona Tax Comm'n, 448 U. S. 160 (1980); White Mountain Apache Tribe v. Bracker, 448 U. S. 136 (1980); Halliburton Oil Well Cementing Co. v. Reily, 373 U. S. 64 (1963); Laurens Federal Savings & Loan Assn. v. South Carolina Tax Comm'n, 365 U. S. 517 (1961); Memphis Steam Laundry Cleaner, Inc. v. Stone, 342 U. S. 389 (1952); Best & Co. v. Maxwell, 311 U. S. 454 (1940); Iowa-Des Moines National Bank v. Bennett, 284 U. S. 239 (1931); International Paper Co. v. Massachusetts, 246 U. S. 135 (1918); State Tonnage Tax Cases, 12 Wall. 204 (1871); cf. Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S.

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