Argentina: Hygiene, Sanitation And Safety Tax: The Federal Supreme Court Held That Provincial Authorities Can Only Control The Hygiene, Sanitation And Safety Of Dairy Products Inside Local Stores

On February 14, 2012, the Federal Supreme Court, in the "Logística La Serenísima S.A. y otros c/ Provincia de Mendoza s/ acción declarativa de inconstitucionalidad" case, issued a preliminary injunction ordering the province of Mendoza to cease:

1. to require payment of the Hygiene, Sanitation and Safety Tax (the so called "Tasa de Abasto"); and
2. to obstruct the introduction, distribution and sale of dairy products that intend to enter into such province.

This decision was held in a proceeding where was challenge the constitutionality of the tax created by the Province of Mendoza through Law No. 6959 (as amended by the Law No. 8006) which established a system to control the hygiene, sanitation and safety of dairy products that were introduced in the Province.

According to the challenged legislation, any individual or entity located outside the Province of Mendoza which intends to resell dairy products in such jurisdiction is complied to pay this tax.

When admitting the injunction, the Federal Supreme Court considered that the fact that the Province of Mendoza intends to perform hygienic and sanitary controls of diary products manufactured in other jurisdictions and introduced into its territory in a place other than local stores breaches the National System of Food Control ("Sistema Nacional de Control de Alimentos").

This decision is significant because it was recognized that provincial authorities can only perform hygiene, sanitation and safety controls of dairy products inside the stores where such products are sold and not during the time that said products are circulating inside the Province. Therefore, this conclusion may be extended to challenge similar taxes created by different Municipalities (Tasa de Abasto).