PSMT, LLC v. The Government of the U.S. Virgin Islands, the Virgin Islands Bureau of Internal Revenue, and Joel A. Lee, in His Capacity as Director of Internal Revenue

PSMT · United States District Court for the District of the Virgin Islands, Division of St. Thomas and St. John · March 30, 2026 · No. 3:19-cv-0118

Summary

The District Court of the Virgin Islands denied the defendants’ Rule 12(b)(6) motion to dismiss PSMT, LLC’s First Amended Complaint. The court held that PSMT plausibly alleged that the Virgin Islands container tax violates the Dormant Commerce Clause and Tonnage Clause, and therefore allowed its claims for tax refunds and related relief to proceed.

Court
United States District Court for the District of the Virgin Islands, Division of St. Thomas and St. John
Jurisdiction
District Court of the Virgin Islands, Division of St. Thomas and St. John
Decision date
March 30, 2026
Docket number
3:19-cv-0118
Disposition
other

Questions Presented

  1. Whether the court had federal-question jurisdiction over PSMT's constitutional challenges to the Virgin Islands container tax.
  2. Whether PSMT plausibly alleged that the Virgin Islands container tax violates the Dormant Commerce Clause.
  3. Whether PSMT plausibly alleged that the container tax violates the Tonnage Clause.
  4. Whether PSMT, as owner of cargo containers subject to the tax, falls within the Tonnage Clause's zone of interests.
  5. Whether the complaint stated a claim for a refund of improperly assessed excise taxes.

Holdings

  1. Because PSMT challenged the constitutionality of the Container Tax, the court could exercise federal-question jurisdiction under 28 U.S.C. § 1331 over Counts II through VI of the First Amended Complaint.
  2. PSMT was entitled to pursue a refund of improperly assessed excise taxes as alleged in Count I.
  3. PSMT plausibly alleged that the Virgin Islands container tax discriminates against out-of-territory commerce and therefore states a claim under the Dormant Commerce Clause.
  4. PSMT plausibly alleged that the container tax violates the Tonnage Clause because taxing containers brought into the Territory on oceangoing ships operates as a charge for the privilege of entering, trading in, or lying in a port.
  5. PSMT, as owner of cargo containers subject to the tax, falls within the Tonnage Clause's zone of interests.
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