This TaxProf Op-Ed on Learning Resources is by Reuven S. Avi-Yonah (Google Scholar), Irwin I. Cohn Professor of Law at the University of Michigan:

Learning Resources and Regulatory Taxation

Reuven S. Avi-Yonah

On February 20, 2026, the Supreme Court issued its opinion in Learning Resources, Inc. v. Trump.[1] The Court held by a 6-3 majority that President Trump lacked the authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The statute authorizes the President to “by means of instructions, licenses, or otherwise . . . regulate . . . nullify, void, prevent or prohibit, any . . . importation or exportation of . . . any property in which any foreign country or a national thereof has any interest.”[2] The Court was split in its rationale, because Chief Justice Roberts and Justices Gorsuch and Barrett based their decision on the major questions doctrine, while Justices Kagan, Sotomayor, and Jackson based it on statutory interpretation of the phrase “regulate . . . importation.”

The opinion raises interesting issues about the relationship between taxes and regulations. In his majority opinion, Chief Justice Roberts wrote that—

But the facial breadth of “regulate” places in stark relief what the term is not usually thought to include: taxation. The U. S. Code is replete with statutes granting the Executive the authority to “regulate” someone or something. Yet the Government cannot identify any statute in which the power to regulate includes the power to tax. The Government concedes, for example, that the Securities and Exchange Commission cannot tax the trading of securities, even though it is expressly authorized to “regulate the trading of . . . securities.” 15 U. S. C. §78i(h)(1); see Brief for Federal Parties 31–32. We are therefore skeptical that in IEEPA—and IEEPA alone—Congress hid a delegation of its birth-right power to tax within the quotidian power to “regulate.”

Taxes, to be sure, may accomplish regulatory ends. See Sonzinsky, 300 U. S., at 513; Gibbons, 9 Wheat., at 201–202. But it does not follow that the power to regulate something includes the power to tax it as a means of regulation. Congressional practice suggests as much. When Congress addresses both the power to regulate and the power to tax, it does so separately and expressly. See, e.g., 16 U. S. C. §460bbb–9(a) (distinguishing between the power to “tax persons, franchise, or private property” on lands and the power “to regulate the private lands”); 2 U. S. C. §622(8)(B)(i) (“government-sponsored enterprise” does not have the “power to tax or to regulate interstate commerce”). That is unsurprising, as the “power to regulate commerce” is “entirely distinct from the right to levy taxes.” Gibbons, 9 Wheat., at 201. That Congress did not grant those authorities separately here is strong evidence that “regulate” in IEEPA does not include taxation.[3]

The question, though, is what distinguishes a tax that is intended to regulate from other types of regulation? If there is an overlap between “tax” and “regulation,” and some taxes are regulatory, then are those regulatory taxes not regulations? And if they are, are those regulations not taxes? Some regulations (e.g., command and control regulations) are not taxes, and some taxes (e.g., taxes that do not affect behavior) are not regulations, but there is a significant overlap between the two terms that makes it difficult to draw a clear distinction between them.

Chief Justice Roberts suggested that the distinction is that taxes raise revenue, writing that “[n]one of IEEPA’s authorities includes the distinct and extraordinary power to raise revenue.”[4] He also wrote that—

tariffs, as discussed above, are different in kind, not degree, from the other authorities in IEEPA. Unlike those authorities, tariffs operate directly on domestic importers to raise revenue for the Treasury. See 19 U. S. C. §1505(a); 19 CFR §141.1(b) (2025).[5]

Similarly, Justice Jackson in her concurring opinion also emphasized that all taxes raise revenue, writing that “[t]ariffs are different in kind. They are a tax on imports; a means of generating revenue from transactions between private parties.”[6]

But what about a tariff that is so high as to raise no revenue, and therefore essentially bans the importation of the relevant product? President Biden imposed 100% tariffs on electric vehicles from China, and that has resulted in no Chinese EVs at all being imported into the United States, so that the tariff raises no revenue.

The IEEPA clearly authorizes the President to “nullify” the importation of foreign goods, so that an outright ban on them would be an appropriate exercise of delegated authority. It is hard to see why a tariff that is so high that it operates as a ban would not be authorized under this language. But in that case, where would the line be drawn? Would a tariff that reduces imports by 99% not be authorized because it raises some minimal revenue?

Similarly, consider a Pigouvian tax, such as a tax on tobacco products designed to deter their consumption. The tax rate could be set high enough so that it raises no revenue because it drives all the demand to a black market. Would that still be a tax authorized under the Taxing Clause?

If a tax can be primarily regulatory, then it makes no sense to argue that the power to “regulate” excludes the power to tax. Therefore, since the President is explicitly authorized by the IEEPA to “regulate” imports, the President should be entitled also to tax them through tariffs. Most of the tariffs imposed under the IEEPA are not primarily a revenue-raising measure; their primary rationale is to protect American industry from foreign competition and induce foreign competitors to move production to the United States. The fact that they produce some revenue does not undermine their primary regulatory function.

The Court’s opinion is therefore wrong as a matter of statutory interpretation. But other than arguably requiring a refund of billions collected under the IEEPA, it is unlikely to bar the President from imposing tariffs under other delegations.[7] And it further confuses the line between taxes and regulations that has already been misapplied in NFIB v. Sebelius.[8] As Justice Kavanaugh wrote in his dissent, what a “mess”!

Other TaxProf Blog posts in this series:

• TaxProf Op-Ed: Clarke on Justice Gorsuch’s Learning Resources Concurrence (Feb. 25, 2026)
• TaxProf Op-Ed: Endean on Delegations of the Taxing Power (Feb. 24, 2026)
• TaxProf Op-Ed: Avi-Yonah on Learning Resources and Regulatory Taxation (Feb. 23, 2026)
• The Supreme Court Strikes Down Trump’s IEEPA Tariffs (Feb. 21, 2026)

[1] No. 24-1287, slip op. (U.S. Feb. 20, 2026).

[2] International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. (emphasis added).

[3] Learning Res., slip op., at 14–15 (Roberts, C.J., opinion of the Court); see also id. (Kagan, J., concurring).

[4] Id. at 16.

[5] Id. at 17.

[6] Learning Res., slip op. at 4 (Jackson, J., concurring).

[7] See Learning Res., slip op. at 62–63 (Kavanaugh, J., dissenting).

[8] 567 U.S. 519 (2012). See Reuven S. Avi-Yonah & Yoseph M. Edrey, Constitutional Review of Federal Tax Legislation, 2023 U. Ill. L. Rev. 1.