After Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, held that Hawaiis liquor excise tax scheme - which allowed tax preferences for alcoholic beverages manufactured from certain products grown in the State - violated the Commerce Clause because it had the purpose and effect of discriminating against interstate commerce, Florida revised its similar tax preference scheme to provide special rate reductions for specified products commonly grown in that State and used in alcoholic beverages produced there. Petitioner McKesson Corporation, a wholesale liquor distributor whose products did not qualify for the rate reductions, paid the applicable taxes for a number of months. McKesson then filed suit in state court against respondent taxing authorities seeking, inter alia, a refund in the amount of the excess taxes it had paid as a result of its disfavored treatment. The trial court invalidated the tax scheme under Bacchus Imports, enjoining future enforcement of the preferential rate reductions, but declined to order a refund or any other form of relief for taxes McKesson had already paid. The courts order was stayed pending appeal, and the State continued to collect taxes with the local preferences still in effect. The Florida Supreme Court ultimately affirmed in all respects, ruling that the refusal to order a refund was proper in light of "equitable considerations."

Held:

1. The Eleventh Amendment - which provides in part that the federal "[j]udicial power . . . shall not . . . extend to any suit . . . commenced or prosecuted against one of the United States by Citizens" - does not preclude the Supreme Courts exercise of appellate jurisdiction over cases brought against States that arise from state courts. This view has been implicit in the Courts consistent practice and uniformly endorsed in its cases, including cases involving state tax refund actions brought in state court, for almost 170 years. See, e. g., Cohens v. Virginia, 6 Wheat. 264, 412; General Oil Co. v. Crain, 209 U.S. 211, 233; Davis v. Michigan Dept. of Treasury, 489 U.S. 803. Pp. 26-31.

2. If a State penalizes taxpayers for failure to remit their taxes in a timely fashion, thus requiring them to pay first and obtain review of the [496 U.S. 18, 19] taxs validity later in a refund action, the Due Process Clause of the Fourteenth Amendment requires the State to afford them meaningful postpayment relief for taxes already paid pursuant to a tax scheme ultimately found unconstitutional. Pp. 31-52.

(a) This Courts precedents demonstrate the traditional legal analysis appropriate for determining Floridas constitutional duty to provide retrospective relief to McKesson for its payment of an unlawful tax. Atchison, T. & S. F. R. Co. v. OConnor, 223 U.S. 280, 285-286; Ward v. Love County Board of Commrs, 253 U.S. 17, 24; Carpenter v. Shaw, 280 U.S. 363, 369; Montana National Bank of Billings v. Yellowstone County, 276 U.S. 499, 504, 505; Iowa-Des Moines National Bank v. Bennett, 284 U.S. 239, 247. Pp. 32-36.

(b) Under these cases, a State must provide procedural safeguards against an unlawful tax exaction because such exaction constitutes a deprivation of property under the Due Process Clause. A State may do so either by providing a form of predeprivation process - e. g., by authorizing taxpayers to sue to enjoin imposition of the tax prior to its payment or to withhold payment and then interpose their objections as defenses in a state-initiated tax enforcement proceeding - or by providing retrospective relief as part of its postdeprivation procedure. Since Florida has established various financial sanctions and summary remedies to encourage liquor distributors to tender tax payments before resolution of any dispute over the taxs validity, the State does not provide a meaningful opportunity for predeprivation relief. Th