Source: https://www.law.cornell.edu/supremecourt/text/245/292
Timestamp: 2019-04-23 16:08:31+00:00

Document:
Mr. David Wallerstein, of Philadelphia, Pa., for plaintiff in error.
Mr. Joseph L. Kun, of Philadelphia, Pa., for the Commonwealth of Pennsylvania.
As in other cases of this character, we accept the decision of the state court of last resort respecting the proper construction of the statute, but are in duty bound to determine the questions raised under the federal Constitution upon our own judgment of the actual operation and effect of the tax, irrespective of the form it bears or how it is characterized by the state courts. Galveston, Harrisburg, etc., Ry. Co. v. Texas, 210 U. S. 217, 227, 28 Sup. Ct. 638, 52 L. Ed. 1031; St. Louis S. W. Ry. v. Arkansas, 235 U. S. 350, 362, 35 Sup. Ct. 99, 59 L. Ed. 265; Kansas City Ry. v. Kansas, 240 U. S. 227, 231, 36 Sup. Ct. 261, 60 L. Ed. 617.
The bare question, then, is whether a state tax imposed upon the business of selling goods in foreign commerce, in so far as it is measured by the gross receipts from merchandise shipped to foreign countries, is ineffect a regulation of foreign commerce or an impost upon exports, within the meaning of the pertinent clauses of the federal Constitution. Although dual in form, the question may be treated as a single one, since it is obvious that, for the purposes of this case, an impost upon exports and a regulation of foreign commerce may be regarded as interchangeable terms. And there is no suggestion that the tax is limited to the necessities of inspection, or that the consent of Congress has been given.
We are constrained to hold that the answer must be in the affirmative. No question is made as to the validity of the small fixed tax of $3 imposed upon wholesale venders doing business within the state in both internal and foreign commerce; but the additional imposition of a percentage upon each dollar of the gross transactions in foreign commerce seems to us to be, by its necessary effect, a tax upon such commerce, and therefore a regulation of it, and, for the same reason, to be in effect an impost or duty upon exports. This view is so clearly supported by numerous previous decisions of this court that it is necessary to do little more than refer to a few of the most pertinent. Case of the State Freight Tax, 15 Wall. 232, 276, 277, 21 L. Ed. 146; Robbins v. Shelby County Taxing District, 120 U. S. 489, 7 Sup. Ct. 592, 30 L. Ed. 694; Fargo v. Michigan, 121 U. S. 230, 244, 7 Sup. Ct. 857, 30 L. Ed. 888; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326, 336, 7 Sup. Ct. 1118, 30 L. Ed. 1200; Leloup v. Port of Mobile, 127 U. S. 640, 648, 8 Sup. Ct. 1383, 32 L. Ed. 311; McCall v. California, 136 U. S. 104, 109, 10 Sup. Ct. 881, 34 L. Ed. 391; Galveston, Harrisburg, etc., Ry. Co. v. Texas, 210 U. S. 217, 227, 28 Sup. Ct. 638, 52 L. Ed. 1031.
Most of these cases related to interstate commerce, but there is no difference between this and foreign commerce, so far as the present question is concerned.
Besides, the tax imposed in the Ficklen Case was not directly upon the business itself or upon the volume thereof, but upon the amount of commissions earned by the brokers, which, although probably corresponding with the volume of the transactions, was not necessarily proportionate thereto. For these and other reasons the case has been deemed exceptional.
That portion of the tax which is measured by the receipts from foreign commerce necessarily varies in proportion to the volume of that commerce, and hence is a direct burden upon it.
So obvious is the distinction between this tax and those that were sustained in Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 12 Sup. Ct. 121, 163, 35 L. Ed. 994, U. S. Express Co. v. Minnesota, 223 U. S. 335, 347, 32 Sup. Ct. 211, 56 L. Ed. 459, Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 87, 34 Sup. Ct. 15, 58 L. Ed. 127, Kansas City Ry. v. Kansas, 240 U. S. 227, 232, 235, 36 Sup. Ct. 261, 60 L. Ed. 617, and some other cases of the same class, that no time need be spent upon it.
'Section 1. Be it enacted, etc., That from and after the passage of this act, each retail vender of or retail dealer in goods, wares and merchandise shall pay an annual mercantile license tax of two dollars, and all persons so engaged shall pay one mill additional on each dollar of the whole volume, gross, of business transacted annually. Each wholesale vender of or wholesale dealer in goods, wares and merchandise shall pay an annual mercantile license tax of three dollars, and all persons so engaged shall pay one-half mill additional on each dollar of the whole volume, gross, of business transacted annually. Each dealer in or vender of goods, wares or merchandise at any exchange or board of trade shall pay a mercantile license tax of twenty-five cents on each thousand dollar worth, gross, of goods so sold.
Literally, the objection was that a tax based upon the gross receipts for merchandise shipped to foreign countries would be 'a tax levied by the United States of America upon commerce with foreign nations, in violation of article 1, section 8, of the Constitution of the United States, and would also be an impost or duty on exports levied by the state of Pennsylvania without the authority of an act of Congress in violation of aricle 1, section 10, of the Constitution of the United States.' The description of the tax as 'levied by the United States of America' evidently was a slip, and so understood by both courts, as appears from the opinion of the court of common pleas (unreported), of which only the conclusion is quoted in the opinion of the Supreme Court.
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A. G. SPALDING & BROS. v. EDWARDS, Collector of Internal Revenue.
OZARK PIPE LINE CORPORATION v. MONIER et al.
NEW JERSEY BELL TELEPHONE CO. v. STATE BOARD OF TAXES AND ASSESSMENT OF NEW JERSEY.

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