Evening star., 1940-01-29
Court broadens
New York CITY
Sales Tax Scope
Levy Held Applicable
To Goods Delivered
From Out of Town
Ry I. A. E0X.

Dy D. m o<A'
The Supreme Court today in a
five-three decision broadened the
scope of the New York City con-
sumers' sales tax, holding that 1t
applied to merchandise delivered to
local buyers from out-of-toWn dis
tributing centers as we'll as to the
over the counter transactions on
which sales levies customarily are
made.
The 2 per cent tax had been
held unconstitutional by the New
York Supreme Court as burden on
interstate commerce after chal-
lenges by the Berwind-White Coal
Co., the Felt Tarrant Manufacture
ing Co. and the A. H. DuGrenier,
Inc.
Certain types of tax may, if per-
mitted at all, so readily be made
the instrument of destroying inter-
state commerce, as plainly to call
for their condemnation as forbidden
regulations, said the opinion of the
court, which was read by Justice
Stone
Such are the taxes which are
aimed at or discriminate against
the commerce or impose levy for
the privilege of doing it, or tax
interstate transportation or COM
munication or their gross earnings.
or levy an exaction on merchandise
in the course of its interstate jour-
ney Each imposes burden which
intra- state commerce does not bear,
and merely because interstate COM
merce is being done places it at a
disadvantage in comparison with
intra-state business or property in
circumstances such that if the as
serted power to tax were sustained,
the States would be left free to
exert it to the detriment of the
national commerce.
The present tax is without pos
sibility of such consequences. Equal
ity is its theme"
Hughes Dissents.
In the vigorous dissent. in which
he was joined by Justice Mercy
nolds and Justice Roberts. Chief
Justice Hughes declared the case
is one of interstate commerce in its
most obvious form"
I'VE have the duty of maintain
ing the immunity of interstate COM
merce as contemplated by the Con-
stitution," the dissent continued.
That immunity still remains an
essential buttress of the Union and
a free national market so far as
it can be preserved without violence
to State power over the subjects
within State jurisdiction, is not less
now than heretofore a vital con-
Germ of the national economy
The courts principal decision was
given in the case of the BurWin-
White Co. with supporting deci-
sion for the other two concerns
which had protested the levy.
THE tax as here applied is open
to the same objection as tariff
upon the entrance of the coal into
the State of New York, or a State
tax upon the privilege of doing an
interstate business" the chief JUS
tice said, land in my view it cannot
be sustained without abandoning
principles long established and a
host of precedents soundly based"
Imposed for Jobless Aid.
The New York City sales tax was
imposed for unemployment relief
and required that it be collected
by the vendor.
In appealing from the reversal
in the Supreme Court of New York,
the city said a decision by the
Supreme Court would have an effect
on business revenues amounting to
millions of dollars and also would
determine the validity of sales tax
legislation elsewhere. In the Ber-
wind White case, the company
pointed out that its coal was ordered
from its New York Office. that these
orders were telephoned to the COM
pany's Pennsylvania mine, that the
coal came into Jersey City by train
dllu JllhJ IL was JllCil lOdOCO VII
barges for delivery in New York,
the principal customers being utili-
ties.
Felt and Tarrant are manufac-
lures of speedometers in Chicago,
while DuGrenier, Inc. manufactures
vending machines in Haverhill,
Mass.
New York City said the ruling
of the State court would encourage
business to keep their plants out
side New York and maintain only
sales Offices In the city.
"It was not the purpose OF the
commerce clause to relieve those en-
gagged in interstate commerce of
their just share of just tax burden,
merely because an incidental or
consequential effect of the tax is an
increase in the cost of doing busi-
ness" the courts opinion said. mot
1see SUPREME COURT, Page A-5)
1ranennrtafinn hnenrv