Ecotax Law and Legal Definition

Ecotax is known as ecological taxation. Ecotax is levied to promote ecologically sustainable activities. Ecotax is a form of pigouvian tax. Ecotax is more common in Germany. In the U.S. ecotax is also known as severance tax. In, Commonwealth Edison Co. v. Mont., 453 U.S. 609 (U.S. 1981), the U.S. Supreme court ruled that, states may set ecotaxes as high as they wish without violating the Commerce Clause or the Supremacy Clause of the U.S. Constitution.