St. Johnsbury Caledonian. [volume] (St. Johnsbury, Vt.) 1867-1919, 1890-11-27
RAILROAD TAXATION.

We had supposed the recent deci-
sion of the Vermont supreme court
pronouncing the corporation tax
law of the state unconstitutional
| was based upon some possible pro-
vision of the law that the gross
receipts of the railroads should be
taxed regardless of what proportion
was earned within and what with
| out the state. But the full text of
the decision does not bear out this
superstition The law is declared
unconstitutional and void because it
provides for any taxing of the gross
receipts of roads engaged in inter
state commerce. And as practically
all railroads handle interstate traffic
in greater orless degree, this decision
plete abandonment by Vermont of
this method of taxing railway and
other transportation corporations.
1t becomes, therefore, a very i'm
portant decision. This taxation
method has been regarded with great
favor in Vermont. 1t has been tried
in Wisconsin and Mississippi, and
there, too, considered very salts
factory But the Vermont court
says that tax on gross receipts OBJ
tanned from interstate traffic is
tax on interstate commerce and IS
inhibited by the constitution. How
are such receipts to be readily dis
tinguished from those of purely state
traffic? The two kinds of traffic are
so mixed and commingled that such
divisioni is next to impossible. And
were it possible, what would be the
effect of taxing traffic wholly within
thestate and letting interstate traffic
much the largest proportion in
almost any state-go free? Would
it not be a clear discrimination
against state in favor of interstate
traffic?
We cannot see that the commerce
clause of the United States constitu-
ton calls for any such discrimina
ton 1t cannot be called an inter
ference with, or regulation of, inter
state commerce where state levies
taxes on goods or traffic within it's
borders without distinguishing or
discrimina ting between what orig
mated within and what without the
state. We know that the United
States supreme court has recently
laid down the contrary opinion,
notably in the Tennessee tax drum
mer case and in that of Philadelphia
steamship company against Penn
sylvania; which last is cited by the
Vermont court to sustain its present
decision. But the position is untena-
BILE, as Chief Justice Waite pointed
out in the drummer case, and the
court will in the end be compelled to
recede from it if any sort of state
control of local affairs is to be al
lowed. 1t was in adhering to this
position that the court was led into
what Senator Edmunds calls the
blunder of the original-package de
cision, which decreed that liquor
coming from without a state could
not be treated on just the same tax
ing or prohibitive terms that liquor
originating within the state could
If this position is right the taxing
of the real property of the railroads
of Massachusetts is as wrong as the
Vermont gross-receipts tax. Why
not? Is not the taxation of a road
bed over which interstate traffic
passes as much a taxation of inter
state commerce as the levy upon the
gross receipts of such roads? To be
sure Massachusetts taxes the road
bed within her borders regardless of
whether the traffic be mainly local
or mainly interstate; but Vermont
taxes gross receipts of traffic within
her borders in just the same way.
Is it an interference with interstate
commerce to treat interstate traffic
with the state in just the same way
in which purely local traffic is treat
ed? If it is, the state might as well
surrender all powers of taxation
springfield Republican.