Page images
PDF
EPUB

framers of the Constitution, as shown in the historical records. that have come down to us.

§ 333. State Taxation of Goods in Transit.

A difficulty which has not infrequently arisen with reference to the amenability of articles of interstate commerce to state taxation is the question when an article may fairly be said to be in transitu and when it may be said to have obtained a taxable situs in the State. That an article actually in transit from one State to another is not taxable by a State is admitted. That an article manufactured for interstate trade and intended to be sent outside the State, but its transportation thither not yet begun, is taxable in the State where located, is equally well established.

89

In Brown v. Houston it was held that coal from another State, unsold, and for sale upon the barge upon which it had been brought, was taxable by the State. The court said: "The tax was not a tax imposed upon the coal as a foreign product, or as the product of another State than Louisiana, nor a tax imposed by reason of the coal being imported or brought into Louisiana, nor a tax imposed whilst it was in a state of transit through that State to some other place of destination. It was imposed after the coal had arrived at its destination and was put up for sale. The coal had come to its place of rest, for final disposal or use, and was a commodity in the market of New Orleans. had become a part of the general mass of property in the State, and as such it was taxed for the current year, as all other property in the city of New Orleans was taxed. It was subjected to no discrimination in favor of goods which were the product of Louisiana, or goods which were the property of citizens of Louisiana."

[ocr errors]
[ocr errors]
[ocr errors]
[ocr errors]

It

The court go on to say: "When Congress shall see fit to make a regulation of the subject of property transported from one State to another, which may have the effect to give it a temporary exemption from taxation in the State to which it is transported, it

89 114 U. S. 622; 5 Sup. Ct. Rep. 1091; 29 L. ed. 257.

will be time enough to consider any conflict that may arise between such regulation and the general laws of the State."

90

In Coe v. Errol the question was as to the taxation of certain logs cut in the State and drawn to another place in the State, whence they were to be floated down stream to a place outside the State. Because of low water they had not yet started upon this interstate portion of their trip. The logs were held taxable, the court thus fixing the doctrine that articles deposited or stored at an entrepôt for future interstate transportation are taxable by the State in which they are situated.

91

In Diamond Match Co. v. Ontonagon, however, it was held that logs cut and floated down a stream to a boom or sorting gap, from which they were to be shipped by rail outside the State, were, while awaiting delivery to the railroad, in transitu and not subject to state taxation.

In Kelley v. Rhoads2 it was held that sheep while being driven across the State of Wyoming, to the State of Nebraska at the rate of about nine miles a day, were exempt from taxation under a Wyoming law authorizing the taxing of live stock brought into the State for grazing purposes, although the sheep were permitted, incidentally, while in transit, to support themselves by grazing,83

In American Steel & Wire Co. v. Speed the foregoing authorities are reviewed, and the doctrine declared that a State is not precluded by the Commerce Clause from imposing a manufacturer's tax upon a non-resident manufacturing corporation which has selected a city of the State as a distributing point, and engaged a local transfer company to take charge of its products when shipped to that point, assort them, store them and make delivery of them in the original packages to the firm's customers. Such goods, when stored, were declared to be no longer in transit.

90 116 U. S. 517; 6 Sup. Ct. Rep. 475; 29 L. ed. 715. 91 188 U. S. 82; 23 Sup. Ct. Rep. 266; 47 L. ed. 394. 92 188 U. S. 1; 23 Sup. Ct. Rep. 259; 47 L. ed. 359.

93 The court observe: "We do not deny that it may have been the plaintiff's intention not only to graze, but to fatten his sheep, while en route to Wyoming. Indeed, we may suspect it, but there is nothing in the agreed statement of facts to justify that inference.”

94 192 U. S. 500; 24 Sup. Ct. Rep. 365; 48 L. ed. 538.

§ 334. State Taxation of Persons in Transit.

96

97

95

The right of persons to travel from State to State, though apparently not strictly upheld during the early years of the Constitution, has been, since the middle of the last century, well established. Though questioned and not clearly sustained in New York v. Miln, and the License Cases,98 it was definitely declared in the Passenger Cases," decided in 1848, that persons are articles of commerce, and, therefore, that their travel from State to State is protected by the Commerce Clause from state interference. Also in Crandall v. Nevada,1 decided in 1868, the right was held to be one which attaches to federal citizenship and, therefore, protected from state interference independently of the Commerce Clause.

In Henderson v. Mayor of New York2 and People v. Compagnie Générale Translantique3 state taxation of immigrants from foreign countries was declared unconstitutional, the validity of the laws not being saved by terming them police or inspection regulations.

§ 335. Taxation of Property of Interstate Carriers.

The right of the States to tax property, as such, of companies doing an interstate commerce business, is determined by the same principles as those stated in Union Pacific R. R. Co. v. Peniston* with reference to the taxation by the States of federal agencies, namely, that "state taxation is dependent, not upon the nature of the agents, or upon the mode of their constitution, or upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it,

95 Subject, of course, to necessary quarantine provisions.

96 Cf. Prentice and Egan, Commerce Clause, p. 212ff.

97 11 Pet. 102; 9 L. ed. 648.

98 5 How. 504; 12 L. ed. 256. 997 How. 283; 12 L. ed. 702.

16 Wall. 35; 18 L. ed. 745.

2 92 U. S. 259; 23 L. ed. 543.

3 107 U. S. 59; 2 Sup. Ct. Rep. 87; 27 L. ed. 383.

4 18 Wall. 5; 21 L. ed. 787.

or does hinder the efficient exercise of this power. A tax upon their property has no such necessary effect. It leaves them free to discharge the duties they have undertaken to perform. A tax upon their operation is a direct obstruction to the exercise of federal powers."

In Postal Telegraph Cable Co. v. Adams the court say:

"It is settled that where by way of duties laid on the transpor tation of the subjects of interstate commerce, or on the receipts derived therefrom, or on the occupation or business of carrying it on, a tax is levied by a State on interstate commerce, such taxation amounts to a regulation of such commerce and cannot be sustained. But property in a State belonging to a corporation, whether foreign or domestic, engaged in foreign or interstate commerce, may be taxed, or a tax may be imposed on the corporation. on account of its property within a State, and may take the form of a tax for the privilege of exercising its franchises within the State, if the ascertainment of the amount is made dependent in fact on the value of its property situated within the State (the exaction, therefore, not being susceptible of exceeding the sum which might be leviable directly thereon), and if payment be not made a condition precedent to the right to carry on the business, but its enforcement left to the ordinary means devised for the collection of taxes. The corporation is thus made to bear its proper proportion of the burdens of the government under whose protection it conducts its operations, while interstate commerce is not in itself subjected to restraint or impediment. . . . Doubtless, no State could add to the taxation of property according to the rule of ordinary property taxation, the burden of a license or other tax on the privilege of using, constructing or operating an instrumentality of interstate or international commerce, but the value of property results from the use to which it is put and varies with the profitableness of that use, and by whatever name the exaction may be called, if it amounts to no more than the ordinary tax upon property or a just equivalent therefor, ascertained by a reference thereto, it is not open to attack as inconsistent with the 155 U. S. 688; 15 Sup. Ct. Rep. 268; 39 L. ed. 311.

Constitution. (Cleveland, C. C. & St. L. R. Co. v. Backus, 154 U. S. 439; 14 Sup. Ct. Rep. 1122; 38 L. ed. 1041).”

§ 336. Assessment of Property of Interstate Carriers for Purposes of Taxation.

In Henderson Bridge Co. v. Kentucky it is held that, in assessing for taxation the property of a bridge company owning and operating a bridge across the Ohio river, connecting the shores of Kentucky and Indiana, the value of the franchise granted by the taxing State might be included as intangible property, and that the value of this franchise might be estimated by taking the total value of the entire property and subtracting therefrom the value of the tangible property in the taxing State and the value of all the property, tangible and intangible, in the other State."

In Keokuk, etc., Bridge Co. v. Illinois it was held that a state tax on the capital stock of a bridge company consolidated from corporations of different States, which maintains an interstate bridge, is not a tax on a franchise conferred by the Federal Government, although the corporation had an authority under an act of Congress to construct the bridge. Also that such a tax was not a taxation of interstate commerce, because the bridge company did not itself transact any interstate business over it. The court quote with approval the statement in Henderson Bridge Co. v. Kentucky that "clearly the tax was not a tax on the interstate business carried on over or by means of the bridge, because the bridge company did not transact such business. That business was carried on by the persons and corporations which paid the bridge company tolls for the privilege of using the bridge. The fact that the tax in question was to some extent affected by the amount of the tolls received, and therefore might be supposed to increase the rate of tolls, is too remote and incidental to make it a tax on the business transacted."

6166 U. S. 150; 17 Sup. Ct. Rep. 532; 41 L. ed. 953. 7 Four justices dissented.

8 175 U. S. 626; 20 Sup. Ct. Rep. 205; 44 L. ed. 299.

9 166 U. S. 150; 17 Sup. Ct. Rep. 532; 41 L. ed. 953.

« ՆախորդըՇարունակել »