Document: 459 U.S. 145 103 S.Ct. 523 74 L.Ed.2d 323 XEROX CORPORATION, Appellantv.COUNTY OF HARRIS, TEXAS and City of Houston, Texas No. 81-1489. Argued Nov. 10, 1982. Decided Dec. 13, Syllabus Appellant, a New York corporation that manufactures sells copying machines, shipped machine parts manufactured in this country to Mexico City, Mexico, for assembly by its affiliate there. After assembly, the copiers were transported customs bonded trucking company warehouse Tex., where they segregated from other merchandise stored while awaiting sale shipment appellant's affiliates Latin America. None these ever sold customers domestic use, but remained under continuous control supervision United States Customs Service time entered until cleared at their export ports. In 1977, both city Houston Harris County (appellees) assessed ad valorem personal property taxes on warehouse. Appellant sought declaratory injunctive relief state court, claiming unconstitutional. Appellees counterclaimed assessed. The trial court judgment appellant, holding violated Import-Export Commerce Clauses Constitution. Court Civil Appeals reversed granted appellees counterclaims, neither Clause Constitution and, alternatively, had law granting relief. Held: 1. This has jurisdiction over appeal 28 U.S.C. § 1257(2). Notwithstanding appellees' argument lacks because Appeals' decision reversing grant an injunction rested independent adequate ground, indispensable predicate award counterclaims was determination permissible Federal P.149 2. State taxes, such as those involved here, goods bond are pre-empted Congress' comprehensive regulation duties. Under system, established pursuant powers Clause, imports may be duty free Government-supervised warehouses prescribed periods, during withdrawn reexported without payment duty. Only if or beyond period does any become due. Congress created duty-free enclaves federal order encourage merchants here abroad make use American ports transshipment centers foreign trade. It would not compatible with scheme enacted effect goals states tax lodged temporarily Government-regulated storage country. Cf. McGoldrick v. Gulf Oil Corp., 309 414, 60 664, 84 L.Ed. 840. Pp. 150-154. 619 S.W.2d 402, remanded. Alfred H. Hoddinott, Jr., appellant. Cheryl Helena Chapman, appellees. Chief Justice BURGER delivered opinion Court. 1 We noted probable decide whether impose nondiscriminatory imported destined markets. held constitutional. 2 * Xerox Corporation is engaged business manufacturing selling machines. Its operations span globe, it countries facilitate sales. plants production facilities Mexico. 3 machines Colorado which assembled designed market all printing instructions accompanying them Spanish Portuguese. Most operated electric current 50 cycles per second, rather than second standard States. Many approved either Laboratories Canadian Standards Association, required To convert have cost approximately $100 copier. 4 Terminal Warehouse Texas,1 Class There periods ranging few days three years warehouse, merchandise, received. When received order, transport Port Miami, loaded board vessels Miami export.2 5 use; ultimately abroad. Consequently, paid no import duties them.3 6 local authorities did assess 1974 1975. Houston4 $156,728 1977.5 Harris6 followed suit, assessing $55,969 1977 also $48,426 back 1976, total $104,395. 7 As soon learned intended Mexican-assembled copiers, trade zone Buffalo, York, continued fill orders 8 Declaratory already might future. claimed question unconstitutional Art. I., cl. 2; I, 8, 3. 9 Clauses, Xerox. Appeals, 1st District, reversed, nor Clause. 402 (1981). Alternatively, Tex.R.Civ.P. 683 Finally, amount $131,311 plus penalties interest Houston. Supreme denied Xerox's application writ error followed. jurisdiction, --- ----, 102 1766, 72 172 (1982), we reverse. II A. 10 A preliminary appeal. argue since ground. However, issue Constitution; so held. ground supports holding. therefore review judgment. B 11 Pursuant system includes provisions government supervised periods. At 19 1557(a) (1976). While joint custody proprietor officers. 1555 Detailed regulations every aspect manner operated. CFR §§ 19.1-19.6 12 Government regulated, been link chain commerce "a very early our history." Fabbri Murphy, 95 191, 197, 94 468 (1877). forerunner present statute Warehousing Act 1846, ch. 84, Stat. 53 (1846). major objective warehousing allow importers defer exported. legislative history explains reinstate: 13 "the sound though long neglected maxim Adam Smith, 'that ought levied most convenient contributor pay it;' [by providing] shall only when consumption. . ." H.R.Rep. 411, 26th Cong., Sess. 14 stimulated allowing transit remain secure storage, free, resumed journey export. geographic location made place within Western Hemisphere across Atlantic Pacific. consequence making center world that: 15 ". carrying vastly increased; shipbuilding stimulated; many markets supplied, wholly part, us now furnished Europe; industry seaports put greater activity; [and] commercial transactions facilitated. App. Cong.Globe, 29th 792 (1846) (remarks Sen. Dix). 16 ends, willing waive defer, period, small sacrifice up part revenues,7 stimulate work Americans. 17 short, regulated 18 Co., 840 (1939), sales petroleum refined into fuel oil ships' stores bound crude struck down tax, finding preempted Congressional scheme. Id., 429, S.Ct., 669. determined purpose exemption normally laid upon importation "to [refinement stores] thus enable refiners meet competition recover lost imposition tax." U.S., 427, 668; see id., 428, went note that, furtherance purpose, 20 "Congress provided segregation mass state, procedure insure reference confirmed adopted prescribing should taxation." 428-429, concluded 21 fail lessen competitive advantage conferred importer Congress, equal exceed remitted duty." Ibid. 22 deciding, expressly declined rely "prescribing taxation," merely stated "what implicit presently involved." Ibid.8 23 analysis applies full force here. First, sought, statutory reviewed McGoldrick, benefit remitting otherwise employing labor refineries States, whose products commerce. Here, remission benefited shippers using centers. Second, pervasive case petroleum. cases, continual supervision. large enough each offset substantially benefits confer duty.9 freedom taxation necessary McGoldrick. 24 Although there factual distinctions between legal difference. can discern relevance intent fact could whereas option withdraw sale, tax. 25 similar conclusion reached District Columbia International Distributing 331 F.2d 817 (CADC 1964). There, wholesaler alcoholic beverages liable excise embassies reasoned although physically Columbia, subject taxing removed Since took prior removal, quoted approval following language Tax Court: 26 "The idea negatives proposition possession petitioner [the corporation.] True private Columbia; liquors therein; sense District. law, however, still thereto official." F.2d, 820. 27 Corp. confirms what said 1877 supra, 197-198: regard complete proper officers customs." Accordingly, hold Congress's III 29 unnecessary consider whether, absent regulation, pass muster 30 remanded proceedings inconsistent opinion. 31 Reversed Remanded. 32 POWELL, dissenting. 33 1799 permitted post lieu immediate goods. Today holds customs-bonded exempt taxation. unremarkable based evidence congressional intent, support lacking. instead finds incompatible purposes system. 34 Customs-bonded enables paying ready avoid altogether reexported. correctly observes ultimate enhance position international I am persuaded, purpose. 35 attributes significance "pervasive" goods, ante, 153, fails explain how affects state's power guarantee security revenues. owner eventually must reexport monitor removal ensure impair function. withdrawn, therefore, simply immaterial validity 36 argues frustrate encouraging asserts seems me word "offset" context misused. If special warehouses, perhaps viewed "offsetting" storage. An deciding weigh saved through against expended case, acting same matter stored. bring knows he will uses value him savings deferral avoidance duties—precisely 37 accepts reduces importers' costs thereby furthers But itself acknowledges legislation "necessary" achieve No showing met Duty-free policies promoting quite reasonably choose one policy, done, choosing other. 38 relies primarily (1940), invalidated foreign-bound vessels. case. concedes, 152, alone mandated preemption Rather, key factor exempted stores. explicit competition," 668, basis infer preempt analogous meeting competition. All exists itself, reasons above find insufficient. 39 Nor do merit constitutional arguments. Appellees' violate "applied activity substantial nexus State, [are] fairly apportioned, [do] discriminate interstate commerce, related services State." Complete Auto Transit, Inc. Brady, 430 274, 279, 97 1076, 1079, 51 326 (1977). See Michelin Tire Wages, 423 276, 96 535, 46 495 40 notes left open possibility even imposed transit. years, five years. (Supp. V 1981). conceivable view "in transit" provided. cannot agree endowed indefinite immunity state-authorized During prolonged police fire protection various City. "[T]he own way, opposed exacting fee 'the privilege moving State.' " Department Revenue Washington Association Stevedoring Cos., 435 734, 764, 98 1388, 1406, 55 682 (1978) (POWELL, J., concurring result) (quoting 290, 543, (1976)). never circumstances. 41 affirm Appeals. Until 1974, Free Trade Zone Panama, free. rising anti-American sentiment Panama led seek another facility. settled excellent port Goods "joint custody" Service. charge" performed "supervision." (1976) permits end owed, 1978, limit extended Procedural Reform Simplification Pub.L. 95-410, 108, 92 888, 892 (1978). assesses collects Independent School 1976 $1,817,000 located use. Texas, authorities. 90% revenues derived Bureau Census, Historical Statistics Colonial Times 1970, Bicentennial Edition, Part 2, p. 1106 (1975) (customs accounted $26,713,000 out $29,700,000). footnote governing specifically "Imported judicial process subdivision thereof." 19.6(c) n. recent amendment deleted November 1, 1982, effective December 47 Fed.Reg. 49370. Treasury offered explanation amendment. deletion alter fair January $9,015,690. amounted $540,000. By comparison, year amounting $211,112. J.A. 12a-15a, 25a.

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