Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-07-30
RICHMOND, VA, FRIDAY, JULY 30, 1915.
SECTION OF NEW TAX LAW
HELD Unconstitutional
Judge II. Carter Scott Grants Perma-
nent Injunction 10 Armour
y Company.
STATE WILL APPEAL CASE
Packers Allege Section as to Mcr-
chants Licenses Is Unjust TO
Nonresident Manufacturers Having
Selling Agencies In Virginia


Selling Agencies In Virginia.
Holding that section IS OF the new
Virginia tax law is unconstitutional,
Judge R. Carter Scott yesterday
handed down mn opinion in the case
OF Armour & Co. against the Com
monwealth. permanent injunction is
awarded. restraing Auditor c. Lee
Moore and commissioners Of the rev.
enue in ten cities and towns in which
Armour d Co. have branches from re-
curing the concern TO report as pur-
chases, as basis for its merchants
license tax. the value OF products,
manufactured at its own plants out
side the State and offered for sale
within Virginia. The main point In
Judge Scotts decision is that section
A. controVenes the interstate commerce
provision Of the Federal Constitution.
sitting in the Circuit Court of Rich
mona IN May, Judge Scott granted
temporary Injunction on the applica-
ZION OF Armour & Co, and later ex-
tended the restraining order indefinite
ly' pending arguments of counsel. The
complatnants were represented by
Eppa Hunton, Jr., OF Richmond, and
w. I. Hall, of Roanoke. Assistant At
torney-General Christopher b. Car
nett appeared for the Commonwealth.
The case is regarded as one OF the ut
most Importance. and stands out as
the first successful attack on the new
tax system, adopted by the General
Assembly ut the extraordinary session
last winter.
WILL CARRY CASE
TO SUPREME COURT
Mr.. Garnett said last night that the
Commonwealth would take the case to
the Supreme Court OF Appeals. In
view OF the fact that Judge Scott
holds that the statute conflicts with
tho Federal Constitution, the case may
finally 30 to the Supreme Court of the
United States, unless tho General AS
sembly at its session next year should
remedy the defect pointed out by the
court.
Auditor Moore last night called at
tention to the attitude OF the National
Biscuit Company, of New York, in con-
tradistinction to that OF Armour & Co.
The biscuit company readily agreed to
comply with the law requiring local
merchants licenses for its several
depots in Virginia. and sent represcn-
tatives of Its legal department to Rich
mond for the purpose Of ascertaining
the requirements of the now statute.
The auditor expressed the belief that
not near all OF the foreign corpora
tions, which occupy a similar position
to that OF Armour's. would take adj
vantage of the injunction, but that
many would follow tho course pursued
by the National Biscuit Company. Mr..
Moore was not able to make an esti-
mate OF the loss of revenue which will
result from the courts decision. Ar
mour e. Co. has given no figures on
which its merchants license tax might
In hnG nH hNN hn ~ fhA 49,
that the loss would be three or four
times as much as the concern now
pays in taxos to the State and several
localities affected.
ARMOUR COMPLAINED OF
DISCRIMINATION IN LAW
In It's bill Of complaint, Armour &
Co. attacked section As as a dscrimi-
natory provision against foreign manu-
facturers. 1t was set forth that the
company operates numerous packing
and manufacturing plants in Western
and Eastern cities, and that the bust
ness In which 1t is engaged is pc
culiarly manufacturing business"
Under the section complained of, the
several branches and distributing
houses of the company in Virginia
were required to include as purchas es
for the purpose Of ascertaining n basis
for tho merchants license tax, all goods
and wares manufactured by the coma
pany outside the State.
The section. the company charged,
operated to discriminate in favor OF
resident manufacturers and impose on
nonresident manufacturers a burden
of taxation, In order to diapose of their
products in Virginia, which Is not i'm
posed on resident manufacturers. Sec
tion Al OF the tax laws, It was asserted,
expressly exempted Virginia manufac-
turers from the payment OF mcr-
chants license tax for the disposal OF
It's own products.
COMMONWEALTH CONTENDS
LAW DOES NOT DISCRIMISATE
The Commonwealth's contention was
that there Is no discrimination be-
tween nonresident and domestic manu-
facturers. II was asserted that the
resident manufacturers are permitted
to dispose of their products only at
the place of manufacture without tho
payments OF a merchants license tax,
and that If these domestic concerns
maintain branches. such rs are oper-
ated by Armour & Co. they are subject
TO tho provisions of the law the same
as nonresident manufacturers. It was
contended that this very provision pre-
vents discrimination in favor of tho
nonresident manufactures. The manu-
facturer, whose plant is in the State
also pays tax on the capital In
vested
The Injunction applies to Auditor c..
Lee Moore, under whose orders the at
tempt was made to enforce the section
10 which objection was taken, and to
the following commissioner Of the
revenue in cities and towns where the
company maintains distributing Offices:
Joseph rs. Anderson. Danville; D. r.
Hunt Roanoke; W. H. Snead, Lynch
burg; Charles II. Callahan, Alexandria;
H. w. Fowler. charlottesville; Henry
+. Tresnon, Richmond; r. L. Cosby,
Newport News: Il. ]. Doran, Norfolk