Read the scenario.A city places a tax on the plastic bags customers use for their store purchases. The state legislature responds by passing a bill that outlaws taxes on plastic bags, and the governor signs the bill into law.

The state legislature passed a law that prevents the city from taxing plastic bags, so the state is limiting what laws the city can pass. This illustrates that state governments can regulate the laws cities are allowed to make. The scenario does not establish that only state governments can regulate businesses or pass tax laws.

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