Current Position Ha v NSW (1997)
•    Endorses broad definition of excise: A tax on the production, manufacture, sale or distribution of goods prior to consumption, whether of foreign or domestic origin.
•    Any tax on a step in production of goods up to the point of sale is an excise, & in order to determine whether a tax meets this description, one has to consider the practical effects of the tax.
•    Didn’t overrule, but did confine Franchise fee cases exclusively to their facts.
•    A flat fee is more likely to be seen as a licensing fee in the appropriate industry. When a fee becomes a % of sales, it begins to appear more like a tax.
•    NSW required a tobacco license fee composed of a fixed portion & a backdated levy calculated as % of tobacco sold. P argued invalid as it was an excise.
•    The HC held it to be an excise. The the fee was too high, the period of backdating (2 mths) was too short & period of license (monthly) was too short. Those factors pointed to a tax on tobacco.

Consumption Taxes Ha v NSW
•    Although not explicit, obiter shed doubt on the use of consumption taxes
•    Given practical effects doctrine, it’s almost certain that any consumption tax would be a tax on the sale of goods given there’s no sensible way to tax consumption, without passing on the tax to the point of sale.

Franchise cases
•    After Ha effect has been to practically invalidate ‘Criterion of liability’ reasoning.
•    Ha didn’t overrule them completely, but basically said they disagreed with the reasoning by limiting them to their factual situations.
•    Effect: only backdated license fees imposing exactly the same rates, license periods & calculation methods will survive the test.

Dennis Hotels v Victoria (1960)
•    Backdated license fee was not an excise, because the criterion of liability was not the quantity of the goods currently for sale, but rather the charge was characterised as a license fee to conduct a business.
•    Court considered the ‘form’ and not the ‘substance’ of the State laws imposing the charge.
•    HC upheld validity of Vic legislation which imposed a license fee to conduct a liquor retail business calculated as 6% of the value of all liquor sold in a previous 12 mth period.
•    Concluded that it wasn’t a tax on alcohol being sold, it was a fee for engaging in the practice of selling alcohol.

Dickenson’s Arcade v Tasmania
(1974)
•    Tobacco retailers license fee
•    Fee set at 2.5% of retail value handled by retailer on a 6mth backdated basis
•    Majority upheld the reasoning in Dennis Hotels above.
•    Note that even then this lay on very weak doctrinal foundations. 2 justices said they would have held the fees invalid as excise, in absence of authority.

Phillip Morris (1989)
•    Majority applied Dennis Hotels on a special basis
•    Expressed the view that alcohol & tobacco invited special regulatory control
•    Not an excise if it can be “properly characterised as a fee for carrying on business & if it is calculated by reference to sales made a during a period other than the period of the license.”

Modern thinking
Capital Duplicators v ACT (1993)
•    Endorsed the broad view in Parton
•    Found to be an excise because it was directed towards raising revenue, not merely an element in a regulatory scheme
•    The fact that it involved an advance fee, the backdating period was very proximate, and the large size of the fee, were all relevant.
•    Distinction between duties of custom & duties of excise dependent on step that attracts the tax. Inland taxes Ie. Production, manufacture, sale or distribution in the case of excise. Importation or exportation for customs duties.
•    License to sell X-rated videos ($50/mth + 40% of wholesale value) by wholesale or retail was in substance a tax on the production of such videos.

Hematite Petroleum v Vic (1983)
•    Endorsed broad view as enunciated in Parton
•    4 factors pointed to it being tax (per Mason)
1.    levied only on (3) trunk pipelines
2.    already had permission to operate the pipes
3.    fee is extraordinarily large, & bears no relationship to fees for operation of other pipelines ($40/km for others)
4.    fee is payable before an essential step in production can occur.
•    “it is an exaction of such magnitude imposed in respect of a step in production in such circumstances that it is explicable only on the footing that it is imposed in virtue of the quantity & value…produced.”
•    “a tax on goods sold, like a tax on goods produces, is a burden on production becase it enters into the price of the goods. As the tax increases the price of the goods to the ultimate consumer…it is a burden on production” per Mason J
•    Argued that a section inserted into a Vic Act, imposed a tax which is a duty of excise & therefore invalid by virtue of s90.
•    Tax was called a “pipeline operation fee” of $10mill annually.