Source: https://supreme.justia.com/cases/federal/us/233/304/
Timestamp: 2019-04-23 02:49:15+00:00

Document:
Where orders are taken in one state for goods to be supplied from another state, which orders are transmitted to the latter state for acceptance or rejection, and filled from stock in that state, the business is interstate commerce and not subject to a state license tax. Crenshaw v. Arkansas, 227 U. S. 389.
its home office, unconstitutional as denying due process of law, or as interfering with interstate commerce, or as denying equal protection of the law because it does not apply to merchants selling such machines at regularly established places of business.
In determining whether a state tax statute is constitutional, there is a presumption that the legislature intended to tax only that which it had the constitutional power to tax, and the statute will be sustained if full and fair effect can be given to its provisions as confined wholly to intrastate business.
While a state license statute, if void in part, may be wholly void where its provisions are not separable, it may be sustained so far as it relates to business wholly intrastate and held inapplicable as to interstate commerce, and so held that the Alabama sewing machine license tax is constitutional as to those agencies of a foreign corporation which carry on an intrastate business and inapplicable as to those agencies of such corporation which carry on a wholly interstate business.
The classification of merchants selling sewing machines at regular places of business, as distinguished from a manufacturer selling them by traveling salesmen, is not so unreasonable and arbitrary as to render it a denial of equal protection of the law under the Fourteenth Amendment.
The state has a wide range of discretion in establishing classes for revenue taxes, and its laws will not be set aside as discriminatory if there is any rational basis for the classification.
The court below rightly held that a foreign corporation having an agency in each county of the state and selling sewing machines by traveling salesmen as well as at the agencies was subject to the license intended to be imposed on itinerant sales by the statute of Alabama, and that it fell without the excepted class of merchants although the latter made deliveries of machines by wagon.
"Sec. 32. Sewing machines. -- Each person, firm, or corporation selling or delivering sewing machines either in person or through agents, shall pay $50 annually for each county in which they may sell or deliver said articles. And for each wagon and team used in delivering or displaying the same an additional sum in each county of $25 annually; but this section shall not apply to merchants selling the above enumerated articles at their regularly established places of business."
And also to enjoin the enforcement of county taxes, amounting to fifty percentum of the state tax prescribed by the above section, which might be imposed in the several counties for county purposes under § 33F of the same act.
The bill, as amended, besides showing diverse citizenship of the parties, avers that complainant is qualified under the state laws to do business within the state as a foreign corporation, and has established, in thirty counties of the state, thirty-six regular places of business or stores, which are conducted by it; that complainant buys sewing machines and parts to supply breakage and defects therein and a variety of sewing machine accessories without the state, causes them to be shipped to its places of business within the state, and keeps them at these places for sale to the general public.
at their places of business, and the average weight of these also is about 135 pounds; that, on account of their weight, it is the custom and practice of complainant, and of the other merchants also, to make delivery by the use of wagons and teams, whether the sales are made at their places of business or otherwise, and that it is impracticable to conduct the business without delivery by wagon.
With respect to the business conducted in Russell County, Alabama, it is averred that complainant operates a regularly established place of business in the City of Columbus, Georgia, where sewing machines and accessories are kept for sale, and in connection with this business, agents are employed to deliver machines and accessories in Russell County, which adjoins the Georgia state line, and that complainant does not sell or deliver any sewing machines or accessories in Russell County except in the following manner, namely, its agents use wagons and teams in going about and displaying sample machines, and thereby obtain orders for machines and accessories, which orders are transmitted by the agents to the complainant at Columbus, Georgia, for acceptance or rejection, and if accepted, the machines or other articles so ordered are taken out of stock there, placed upon wagons, and thereby delivered to the purchasers in Russell County.
The bill is based upon the contention that § 32 of the tax law violates the Constitution of the United States in that it is a regulation of interstate commerce, and contravenes the "due process" and "equal protection" clauses of the Fourteenth Amendment, and also that it violates the Constitution of Alabama; and, finally, that appellant is within the exception of the statute.
commerce, and that the act had no application to it. 199 F. 654.
The amendments having been made, the amended bill was submitted upon the same demurrers, which were made to apply to the bill as amended. Again the court sustained the demurrers except as to paragraph 6, relating to Russell County, and as to this overruled them. Defendants then filed an answer admitting the allegations of paragraph 6, and the cause was submitted upon bill and answer, with the result that, by final decree, relief was accorded to complainant as to the license tax sought to be collected in Russell County, and in other respects relief was denied, and the bill dismissed. Because of the constitutional questions, a direct appeal to this Court was taken under Judicial Code, § 238.
With respect to the business conducted in Russell County, the decree of the district court is not now directly under review, but, at any rate, it was clearly correct under Crenshaw v. Arkansas, 227 U. S. 389. With respect to the other counties, the correctness of the decision, so far as the commerce clause is concerned, seems to us equally clear under Ement v. Missouri, 156 U. S. 296.
thus clearly in error in limiting the invalidity of the statute to the dealing in Russell County."
This argument, we think, misses the point. The statute under consideration does not, in direct terms or by necessary inference, manifest an intent to regulate or burden interstate commerce. Full and fair effect can be given to its provisions, and an unconstitutional meaning can be avoided, by indulging the natural presumption that the legislature was intending to tax only that which it constitutionally might tax. So construed, it does not apply to interstate commerce at all. The statute provides for a license or occupation tax. Normally, as the averments of the bill sufficiently show, the occupation may be and is conducted wholly intrastate, and free from any element of interstate commerce. The fact that, as carried on in Russell County, a like occupation is conducted with interstate commerce as an essential ingredient is wholly fortuitous.
of Alabama upon the business of a telegraph company in part interstate and in part internal to be unconstitutional, and held that, since the tax affected the whole business without discrimination, it could not be sustained with respect to that portion of the business that was internal, and therefore taxable by the state. To the same effect are Norfolk &c. R. Co. v. Pennsylvania, 136 U. S. 114, 136 U. S. 119; Crutcher v. Kentucky, 141 U. S. 47, 141 U. S. 62; Galveston &c. Ry. Co. v. Texas, 210 U. S. 217; Western Union Telegraph Co. v. Kansas, 216 U. S. 1, 216 U. S. 27. In Williams v. Talladega, 226 U. S. 404, 226 U. S. 419, there was a state license tax that operated without exemption or distinction upon the privilege of carrying on a business, a part of which was that of an essential governmental agency constituted under a law of the United States. It was held that the tax necessarily included within its operation this part of the business, and, since this was unconstitutional, the whole tax was rendered void.
The statute now under consideration differs materially, in that it deals separately with the business as conducted in each county of the state, and provides for separate taxes to be laid for each county. And the facts as averred in the bill of complaint show that with respect to all of the counties in which appellant does business, excepting only the county of Russell, there is no element of interstate commerce. In each county there is a store or regular place of business, from which all of the local agents for the same county are supplied with sewing machines and appurtenances that are to be taken into the rural districts for sale or renting, and all transactions that enter into the sale or renting are completely carried out within a single county.
by establishing in one county a system of business that involved transactions in interstate commerce.
So far as the Fourteenth Amendment is concerned, the argument is confined to the "equal protection" clause. It is said there is no sufficient ground for a distinction, with respect to taxing the occupation, between the business of selling sewing machines from a regularly established store and the business of selling them from a delivery wagon. But there is an evident difference, in the mode of doing business, between the local tradesman and the itinerant dealer, and we are unable to say that the distinction made between them for purposes of taxation is arbitrarily made. In such matters, the states necessarily enjoy a wide range of discretion, and it would require a clear case to justify the courts in striking down a law that is uniformly applicable to all persons pursuing a given occupation on the ground that persons engaged in other occupations more or less like it ought to be similarly taxed. This is not such a case. Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 184 U. S. 559, 184 U. S. 562; Cook v. Marshall County, 196 U. S. 261, 196 U. S. 274; Armour Packing Co. v. Lacy, 200 U. S. 226, 200 U. S. 235; Southwestern Oil Co. v. Texas, 217 U. S. 114, 217 U. S. 121.
"each sewing machine . . . company selling sewing machines . . . either themselves or by their agents, and all persons who engage in the business of selling sewing machines . . . , but when merchants engaged in a general business keep sewing machines . . . , they shall not be required to pay the tax herein provided,"
"If sewing machines be part of their stock in trade, they are taxed for them as for other merchandise. Their business is in its nature stationary, and there is little or no risk in levying taxes upon their business, on the rule of percentage. That rule may be wholly unsuited and ineffectual for other pursuits and other lines of business. Much must be left to the discretion of the legislature, for exact equality of taxation can never be reached."
And see Ballou v. State, 87 Ala. 144, 146.
"That all men are equally free and independent; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, and the pursuit of happiness,"
"That the sole object and only legitimate end of government is to protect the citizen in the enjoyment of life, liberty, and property, and when the government assumes other functions, it is usurpation and oppression."
"Selling sewing machines is the business, and it is taxed highly, and it may be in fact prohibitorily, when it is done by the use of wagons and teams, and not at all when done at stores."
There are other suggestions of a like import. They seem to be sufficiently answered by what has been already said respecting the "equal protection" clause of the Fourteenth Amendment. The state has a wide range of discretion with respect to establishing classes for the purpose of imposing revenue taxes, and its laws upon the subject are not to be set aside as discriminatory unless it clearly appears that there is no rational basis for the classification.
"The tax is not therefore imposed upon the business, or upon all engaged in a similar business, but is based solely upon the manner in which a party may conduct the business, and the foregoing section is repugnant to the state and federal constitutions under the authority of Montgomery v. Kelly, supra."
The other state decisions to which we are referred have been examined, and we are unable to find in them any basis for declaring § 32 of the act to be in contravention of the state constitution.
Finally, it is said that, since it appears from the averments of the bill that all sales of sewing machines by appellant's agents in the field are executory only, and require the approval of appellant at its regularly established places of business, located in the various counties of the state, which are headquarters for all agents with their wagons and teams, it at the same time sufficiently appears that appellant is a merchant conducting a regular business at each of said stores, and therefore within the saving clause of § 32 of the act in question, which declares that "this section shall not apply to merchants selling the above enumerated articles at their regularly established places of business."
It is quite plain, however, from a reading of the entire section that the business of selling sewing machines by traveling salesmen is intended to be taxed, and the business of selling them at established places of business is intended to be left untaxed, so far as this section is concerned, although the machines sold at these places be delivered by wagons. Complainant is engaged in doing business of both kinds, and, with respect to the itinerant sales, it is subject to the tax under the § referred to.

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