Source: https://supreme.justia.com/cases/federal/us/245/292/
Timestamp: 2019-04-21 02:57:00+00:00

Document:
This Court determines the constitutionality of a state tax upon its own judgment of the actual operation and effect of the tax, irrespective of its form and of how it is characterized by the state courts.
A state tax on the business of selling goods in foreign commerce, measured by a percentage of the entire business transacted, is both a regulation of foreign commerce and an impost or duty on exports, and is therefore void. Ficklen v. Shelby Couny Taxing District, 145 U. S. 1, distinguished.
Whether there was error in the disposition of the federal question is the only subject with which we have to deal.
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, & San Antonio Ry. Co. v. Texas, 210 U. S. 217, 210 U. S. 227; St. Louis Southwestern Ry. Co. v. Arkansas, 235 U. S. 350, 235 U. S. 362; Kansas City &c. Ry. v. Kansas, 240 U. S. 227, 240 U. S. 231.
"An examination of the details of the provisions of the present act makes it clear that the tax, as held by the learned judge below, is upon the business of vending merchandise, and that the classification is based on the manner of sale, and within each class the tax is graduated according to the gross annual volume of business transacted. This is apparent from the fact that the amount of the tax over the small fixed license fee is determined in every case by the volume of business, measured in dollars, and the rate at which it is to be levied is according to the manner of sale."
The bare question, then, is whether a state tax imposed upon the business of selling goods in foreign commerce, insofar as it is measured by the gross receipts from merchandise shipped to foreign countries, is, in effect, 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.
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, 82 U. S. 276-277; Robbins v. Shelby County Taxing District, 120 U. S. 489; Fargo v. Michigan, 121 U. S. 230, 121 U. S. 244; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326, 122 U. S. 336; Leloup v. Port of Mobile, 127 U. S. 640, 127 U. S. 648; McCall v. California, 136 U. S. 104, 136 U. S. 109; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 217, 210 U. S. 227.
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.
they [the plaintiffs in error] would have occupied if they had not undertaken to do a general commission business, and had taken out no licenses therefor, but had simply transacted business for nonresident principals, is an entirely different question, which does not arise upon this record."
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.
"It is settled that where, by way of duties laid on the transportation of the subjects of interstate commerce, or on the receipts derived therefrom, or on the occupation or business of carrying it on, a tax is levied by a state on interstate commerce, such taxation amounts to a regulation of such commerce, and cannot be sustained."
"The state may tax its internal commerce, but if an act to tax interstate or foreign commerce is unconstitutional, it is not cured by including in its provisions subjects within the domain of the state."
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, U.S. Express Co. v. Minnesota, 223 U. S. 335, 223 U. S. 347, Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 231 U. S. 87, Kansas City &c. Ry. v. Kansas, 240 U. S. 227, 240 U. S. 232, 240 U. S. 235, 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."
"Section 2. And it is provided that all persons who shall sell to dealers in or venders of goods, wares, and merchandise, and to no other person or persons, shall be taken under the provisions of this act [to] be wholesalers, and all other venders of or dealers in goods, wares and merchandise shall be retailers, and shall pay an annual license tax as provided in this act for retailers."
"a tax levied by the United States of America upon commerce with foreign nations, in violation of Article I, § 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 I, § 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.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 8
 § 10