A PROMINENT Australian legal expert says he believes the Gillard government's carbon tax is unconstitutional and that the three largest states stand a chance of successfully overturning the legislation in the event of a High Court challenge.

The University of New England academic and practising barrister, Bryan Pape, has provided legal advice to conservative policy think tank, the Institute of Public Affairs, that says the carbon tax legislation — due to come into effect on July 1 — could be challenged on several grounds including that, ''the Commonwealth cannot tax State property: Legally carbon dioxide emissions are State property''.

The advice goes on to say that, in Mr Pape's legal opinion, ''the Commonwealth cannot impose a carbon tax and other related penalties within the same Act. The Commonwealth cannot introduce a carbon tax within its external affairs powers''.

Mr Pape — a specialist in taxation and administrative law — made headlines in 2009 when he mounted a High Court challenge over Labor's $42 billion stimulus package, arguing that the $900 payments to individuals exceeded the federal government's taxation powers.

"These greenhouse gases are property owned by the States and it is impermissible for the Commonwealth to impose any tax on any property of any kind belonging to a State," Mr Pape said.