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Timestamp: 2019-04-25 22:20:15+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 302 › James v. Dravo Contracting Co.
James v. Dravo Contracting Co.
1. A State cannot lay a gross receipts tax on business carried on in another State. P. 302 U. S. 138.
2. A State has no power to tax in a place within the State over which the United States has acquired exclusive jurisdiction. P. 302 U. S. 140.
3. The title to beds of navigable streams within a State is vested in the State, subject to the right of the United States to use the land for the improvement of navigation. P. 302 U. S. 140.
Occupation of the river bed by the United States for the purpose of improving navigation does not divest the State of its title.
4. Locks and dams erected by the United States for the improvement of navigation are "needful buildings" within the meaning of the Const., Art. I, § 8, Cl. 17. P. 302 U. S. 141.
"all places purchased by the consent of the legislature of the State in which the same shall be, for the erection of forts, magazines, arsenals, dock-yards, and other needful buildings."
"Exclusive legislation" is consistent only with exclusive jurisdiction.
"and such other jurisdiction and authority over the same as is not inconsistent with the jurisdiction ceded to the United States by virtue of such acquisition."
(1) The provision as to concurrent jurisdiction qualifies the provision giving consent, and applies to lands acquired by purchase or condemnation, as well as to lands given by municipalities. P. 302 U. S. 143.
(2) The provision reserving merely the right to execute process, repeated from an earlier statute, does not derogate from the broader reservation of jurisdiction in the statute as amended. P. 302 U. S. 145.
6. When a State gives the legislative consent as contemplated by the Const., Art. I, § 8, Cl. 17, to purchase of land by the United States for "needful buildings," as when, after prior purchase or condemnation by the United States, it cedes jurisdiction, it may reserve such a concurrent jurisdiction as will not operate to deprive the United States of the enjoyment of the property for the purposes for which it is acquired. P. 302 U. S. 146.
West Virginia, by a reservation qualifying her consent to their acquisition, retained her jurisdiction to tax over lands purchased or condemned by the United States for navigation improvements on a river.
7. An independent contractor engaged under his contract with the Government in the construction of locks and dams for the improvement of navigation is not an instrumentality of the Government. P. 302 U. S. 149.
tax laid on the contract itself, or as otherwise directly burdening the Government. P. 302 U. S. 149.
9. Application of the principle that governmental instrumentalities of the United States are immune from taxation by the States, and vice-versa, requires close distinctions in order to maintain the essential freedom of government in performing its functions without unduly limiting the taxing power which is equally essential to both Nation and State under our dual system. P. 302 U. S. 150.
Decisions on immunity of government bonds and of government purchases of commodities held inapplicable in case of tax on earnings of independent contractor rendering services to the Government. Pp. 302 U. S. 150-153.
10. The question of the taxability of a contractor upon the fruits of his services to the Government is closely analogous to that of the taxability of his property used in performing the services. His earnings flow from his work; his property is employed in securing them. In both cases, the taxes increase the cost of the work, and diminish his profits. P. 302 U. S. 153.
11. The fact that the tax in this case was on gross, rather than net, receipts does not prove it an unconstitutional burden on the Government. P. 302 U. S. 157.
Distinguished from cases where taxes on gross receipts of individuals engaged in interstate commerce have been held invalid under the commerce clause.
12. Assuming (what is not necessarily so) that a state tax on contractor's gross receipts may increase cost of service to the Government, that fact would not invalidate the tax any more than it would a tax on the contractor's property equipment used in the performance of the contract. P. 302 U. S. 159.
13. Semble that Congress has power to prevent interference with the operations of the Government through state taxation laid on receipts of those who render it services under contracts. P. 302 U. S. 160.
Appeal from a final decree of the three-judge District Court enjoining the collection of a State tax.
This case presents the question of the constitutional validity of a tax imposed by the State of West Virginia upon the gross receipts of respondent under contracts with the United States.
Respondent, the Dravo Contracting Company, is a Pennsylvania corporation engaged in the general contracting business, with its principal office and plant at Pittsburgh in that state, and is admitted to do business in the state of West Virginia. In the years 1932 and 1933, respondent entered into four contracts with the United States for the construction of locks and dams in the Kanawha river and locks in the Ohio river, both navigable streams. [Footnote 1] The State Tax Commissioner assessed respondent for the years 1933 and 1934 in the sum of $135,761.51 (taxes and penalties) upon the gross amounts received from the United States under these contracts.
to restrain the collection of the tax. The case was heard by three judges (28 U.S.C. § 380), and, upon findings, the court entered a final decree granting a permanent injunction. 16 F.Supp. 527. The case comes here on appeal.
"Upon every person engaging or continuing within this state in the business of contracting, the tax shall be equal to two percent of the gross income of the business. [Footnote 2]"
Acts W.Va.1933, 1st Ex.Sess., c. 33, § 2(e).
The tax was in addition to other state taxes upon respondent, to-wit, the license tax on foreign corporations (Code of West Virginia, c. 11, art. 12, §§ 69, 71) and ad valorem taxes upon real and personal property of the contractor within the state.
The questions presented are: (1) whether the state had territorial jurisdiction to impose the tax, and (2) whether the tax was invalid as laying a burden upon the operations of the federal government.
After hearing, we directed reargument and requested the Attorney General of the United States to present the views of the government upon the two questions above stated. Reargument has been had, and the government has been heard.
First. As to territorial jurisdiction. Unless the activities which are the subject of the tax were carried on within the territorial limits of West Virginia, the state had no jurisdiction to impose the tax. Hans Rees' Sons v. North Carolina, 283 U. S. 123, 283 U. S. 133-134; Shaffer v.
Carter, 252 U. S. 37, 252 U. S. 57; Surplus Trading Co. v. Cook, 281 U. S. 647. The question has two aspects: (1) as to work alleged to have been done outside the exterior limits of West Virginia, and (2) as to work done within those limits, but (a) in the bed of the rivers, (b) on property acquired by the federal government on the banks of the rivers, and (c) on property leased by respondent and used for the accommodation of his equipment.
1. A large part of respondent's work was performed at its plant at Pittsburgh. The stipulation of facts shows that respondent purchased outside the State of West Virginia materials used in the manufacture of the roller gates, lock gates, cranes, substructure racks and spur rims, structural steel, patterns, hoisting mechanism and equipment, under each of its contracts, and fabricated the same at its Pittsburgh plant. The roller gates and the appurtenant equipment were pre-assembled at respondent's shops at Pittsburgh, and were there inspected and tested by officers of the United States government. The materials and equipment fabricated at Pittsburgh were there stored until time for delivery, and the appropriate units, as prepared for shipment, were then transported by respondent to the designated sites in West Virginia, and there installed. The United States knew at the time the contracts were made that the above-described work was to be performed at the plaintiff's main plant. The contracts provided for partial payments as the work progressed, and that all the material and work covered by the partial payments should thereupon become "the sole property of the government." Payments by the government were made from time to time accordingly.
in West Virginia consisted of the installation at the respective sites within that state, and an apportionment would, in any event, be necessary to limit the tax accordingly. Hans Rees' Sons v. North Carolina, supra.
2. As to work done within the exterior limits of West Virginia, the question is whether the United States has acquired exclusive jurisdiction over the respective sites. Wherever the United States has such jurisdiction, the state would have no authority to lay the tax. Surplus Trading Company v. Cook, supra.
(a) As to the beds of the Kanawha and Ohio rivers. The present question is not one of the paramount authority of the Federal Government to have the work performed for purposes within the federal province (Scranton v. Wheeler, 179 U. S. 141, 179 U. S. 163; United States v. Chandler-Dunbar Water Power Co., 229 U. S. 53, 229 U. S. 61-62; Lewis Blue Point Oyster Co. v. Briggs, 229 U. S. 82, 229 U. S. 88), or whether the tax lays a burden upon governmental operations; it is simply one of territorial jurisdiction.
right of the Federal Government (Gibson v. United States, supra, p. 166 U. S. 276), the servient title continued as before. No transfer of that title appears. The Solicitor General conceded in his argument at bar that the state of West Virginia retained its territorial jurisdiction over the river beds, and we are of the opinion that this is the correct view.
the latter cannot affect the title of the United States or embarrass it in using the lands or interfere with its right of disposal."
Id., p. 281 U. S. 650. Clause 17 governs those cases where the United States acquires lands with the consent of the Legislature of the state for the purposes there described. If lands are otherwise acquired, and jurisdiction is ceded by the state to the United States, the terms of the cession, to the extent that they may lawfully be prescribed -- that is, consistently with the carrying out of the purpose of the acquisition -- determine the extent of the federal jurisdiction. Fort Leavenworth R. Co. v. Lowe, 114 U. S. 525, 114 U. S. 527, 114 U. S. 538-539; Palmer v. Barrett, 162 U. S. 399, 162 U. S. 402-403; Arlington Hotel Co. v. Fant, 278 U. S. 439, 278 U. S. 451; United States v. Unzeuta, 281 U. S. 138, 281 U. S. 142; Surplus Trading Company v. Cook, supra.
Are the locks and dams in the instant case "needful buildings" within the purview of clause 17? The state contends that they are not. If the clause were construed according to the rule of ejusdem generis, it could be plausibly contended that "needful buildings" are those of the same sort as forts, magazines, arsenals, and dockyards -- that is, structures for military purposes. And it may be that the thought of such "strongholds" was uppermost in the minds of the framers. Elliot's Debates, volume 5, pp. 130, 440, 511; cf. Story on the Constitution, volume 2, § 1224. But such a narrow construction has been found not to be absolutely required, and to be unsupported by sound reason in view of the nature and functions of the national government which the Constitution established.
buildings'" within clause 17. See also United States v. Wurtzbarger, 276 F. 753, 755; Arlington Hotel v. Fant, supra. Locks and dams for the improvement of navigation, which are as clearly within the federal authority as post offices, have been regarded as "needful buildings." United States v. Tucker, 122 F. 518, 522. We take that view. We construe the phrase "other needful buildings" as embracing whatever structures are found to be necessary in the performance of the functions of the federal government.
acquisition by the United States, or under its authority, by purchase, lease, condemnation, or otherwise, of any land acquired, or to be acquired in this State by the United States, from any individual, body politic or corporate, for sites for . . . locks, dams, . . . or any needful buildings or structures or proving grounds, or works for the improvement of the navigation of any watercourse . . . , or for any other purpose for which the same may be needed or required by the government of the United States."
fails for five consecutive years to use any such land for the purposes of the grant.
The contention is made that the third paragraph of § 3 as to "concurrent jurisdiction" was not in the Code of 1923, but was a later addition (1931), and should not be taken as qualifying the first paragraph. But the third paragraph was added before the acquisition here in question, and "any land so acquired" manifestly refers to the acquisitions previously described, which expressly embraced all such acquisitions in the future. The suggestion that the third paragraph applies only to the lands given by municipalities to the United States under the second paragraph is without force. The third paragraph appears to have been taken from the provision, in the same language, of § 19 of the Code of Virginia of 1919, which was not qualified by any intervening provision as to municipalities. See Code of West Virginia, 1931, c. 1, Art. 1, § 3, Revisers' Note. The revisers say it was added to "make more definite the provisions as to jurisdiction." Id. We are not referred to any decision of the Supreme Court of West Virginia construing this paragraph.
was a part of the former statute (1923), and cannot be taken as derogating from the force of the explicit amendment by the later addition in the third paragraph of the present § 3. And, apparently to prevent misunderstanding, there was an amendment at the same time of the provision now in § 4 by the addition of the last clause [Footnote 6] in order to make the reservation of the state's jurisdiction "more comprehensive." Code of West Virginia, 1931, c. 1, Art. 1, § 4, Revisers' Note.
The third paragraph of § 3 carefully defines the jurisdiction ceded by the state, and there is no permissible construction which would ignore this definite expression of intention in considering the effect upon jurisdiction of the consent given by the first paragraph.
But it is urged that, if the paragraph be construed as seeking to qualify the consent of the state, it must be treated as inoperative. That is that the state cannot qualify its consent, which must be taken as carrying with it exclusive jurisdiction by virtue of clause 17. The point was suggested by Justice Story in United States v. Cornell, Fed.Cas. No.14,867, 2 Mason 60, 65, 66, but the construction placed upon the consent in that case made decision of the point unnecessary. There, the place (Fort Adams in Newport Harbor) had been purchased with the consent of the state, to which was added a reservation for the service of civil and criminal process. Justice Story held that such a reservation was not incompatible with a cession of exclusive jurisdiction to the United States, as the reservation operated "only as a condition" and "as an agreement of the new sovereign to permit its free exercise as quoad hoc his own process." Reservations of that sort were found to be frequent in grants made by the states to the United States in order to avoid the granted places being made a sanctuary for fugitives from justice.
Story on the Constitution, volume 2, § 1225. Reference is made to statements in the general discussion in the opinion in Fort Leavenworth R. Co. v. Lowe, supra, but these are not decisive of the present question. The decision in that case was that the state retained its jurisdiction to tax the property of a railroad company within the Fort Leavenworth Military Reservation, as federal jurisdiction had not been reserved when Kansas was admitted as a state and, when the state subsequently ceded jurisdiction to the United States, there was saved to the state the right "to tax railroad, bridge, and other corporations, their franchises and property, on said reservation." The terms of the cession in this respect governed the extent of the federal jurisdiction. See Surplus Trading Company v. Cook, supra. There are obiter dicta in other cases, but the point now raised does not appear to have been definitely determined.
qualification. As the Solicitor General has pointed out, a transfer of legislative jurisdiction carries with it not only benefits, but obligations, and it may be highly desirable, in the interest both of the national government and of the state, that the latter should not be entirely ousted of its jurisdiction. The possible importance of reserving to the state jurisdiction for local purposes which involve no interference with the performance of governmental functions is becoming more and more clear as the activities of the government expand and large areas within the states are acquired. There appears to be no reason why the United States should be compelled to accept exclusive jurisdiction or the state be compelled to grant it in giving its consent to purchases.
Normally, where governmental consent is essential, the consent may be granted upon terms appropriate to the subject and transgressing no constitutional limitation. Thus, as a state may not be sued without its consent and "permission is altogether voluntary," it follows "that it may prescribe the terms and conditions on which it consents to be sued." Beers v. Arkansas, 20 How. 527, 61 U. S. 529; Smith v. Reeves, 178 U. S. 436, 178 U. S. 441-442. Treaties of the United States are to be made with the advice and consent of the Senate, but it is familiar practice for the Senate to accompany the exercise of this authority with reservations. Hyde, International Law, volume 2, § 519. The Constitution provides that no state, without the consent of Congress, shall enter into a compact with another state. It can hardly be doubted that, in giving consent, Congress may impose conditions. See Arizona v. California, 292 U. S. 341, 292 U. S. 345.
or qualify cessions of jurisdiction when purchases have been made without consent or property has been acquired by condemnation. In the present case, the reservation by West Virginia of concurrent jurisdiction did not operate to deprive the United States of the enjoyment of the property for the purposes for which it was acquired, and we are of the opinion that the reservation was applicable and effective.
(c) As to property leased by respondent and used for the accommodation of its equipment. There can be no question as to the jurisdiction of the state over this area.
We conclude that, so far as territorial jurisdiction is concerned, the state had authority to lay the tax with respect to the respondent's activities carried on at the respective dam sites.
Second. Is the tax invalid upon the ground that it lays a direct burden upon the federal government? The Solicitor General, speaking for the government, supports the contention of the state that the tax is valid. Respondent urges the contrary.
The tax is not laid upon the government, its property, or officers. Dobbins v. Commissioners, 16 Pet. 435, 41 U. S. 449-450.
The tax is not laid upon an instrumentality of the government. McCulloch v. Maryland, 4 Wheat. 316; Osborn v. Bank of the United States, 9 Wheat. 738; Gillespie v. Oklahoma, 257 U. S. 501; Federal Land Bank v. Crosland, 261 U. S. 374; Clallam County v. United States, 263 U. S. 341; New York ex rel. Rogers v. Graves, 299 U. S. 401. Respondent is an independent contractor. The tax is nondiscriminatory.
"The power to tax is no less essential than the power to borrow money, and, in preserving the latter, it is not necessary to cripple the former by extending the constitutional exemption of taxation to those subjects which fall within the general application of nondiscriminatory laws, and where no direct burden is laid upon the governmental instrumentality, and there is only a remote, if any, influence upon the exercise of the functions of government."
"the privilege of carrying on a business a part of which is that of a governmental agency constituted under a law of the United States and engaged in an essential part of the public business, communication between the officers and departments of the Federal government."
The emphasis put in these cases upon the effect of the acceptance of the obligation of the act of Congress shows that they cannot be regarded as sustaining the board claim of immunity here advanced.
"wholly the vendor's affair." In Liggett & Myers Tobacco Co. v. United States, 299 U. S. 383, the federal tax, as applied to tobacco purchased by a state for use in a state hospital, was sustained as a tax upon the manufacture of the tobacco, and not upon the sale. Hence, the Court said, "the effect upon the purchaser was indirect, and imposed no prohibited burden."
"There was no tax upon the contract for such carriage; the burden laid upon the property employed affected operations of the Federal Government only remotely. . . . The facts in Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218, and New Jersey Bell Tel. Co. v. State Board, 280 U. S. 338, were held to establish direct interference with or burden upon the exercise of a federal right. The principles there applied are not controlling here."
These decisions show clearly the effort of the Court in this difficult field to apply the practical criterion to which we referred in Willcuts v. Bunn, supra, and again in Graves v. Texas Company, supra. There is no ineluctable logic which makes the doctrine of immunity with respect to government bonds applicable to the earnings of an independent contractor rendering services to the government.
That doctrine recognizes the direct effect of a tax which "would operate on the power to borrow before it is exercised" (Pollock v. Farmers' Loan & Trust Co., supra), and which would directly affect the government's obligation as a continuing security. Vital considerations are there involved respecting the permanent relations of the government to investors in its securities and its ability to maintain its credit; considerations which are not found in connection with contracts made from time to time for the services of independent contractors. And, in dealing with the question of the taxability of such contractors upon the fruits of their work, we are not bound to consider or decide how far immunity from taxation is to be deemed essential to the protection of government in relation to its purchases of commodities, or whether the doctrine announced in the cases of that character which we have cited deserves revision or restriction.
"It may therefore be considered as settled that no constitutional implications prohibit a State tax upon the property of an agent of the government merely because it is the property of such an agent. A contrary doctrine would greatly embarrass the States in the collection of their necessary revenue, without any corresponding advantage to the United States. A very large proportion of the property within the States is employed in execution of the powers of the government. It belongs to governmental agents, and it is not only used, but it is necessary for their agencies. United States mails, troops, and munitions of war are carried upon almost every railroad. Telegraph lines are employed in the national service. So are steamboats, horses, stagecoaches, foundries, shipyards, and multitudes of manufacturing establishments. They are the property of natural persons, or of corporations, who are instruments or agents of the General government, and they are the hands by which the objects of the government are attained. Were they exempt from liability to contribute to the revenue of the States, it is manifest the State governments would be paralyzed. While it is of the utmost importance that all the powers vested by the Constitution of the United States in the General government should be preserved in full efficiency, and while recent events have called for the most unembarrassed exercise of many of those powers, it has never been decided that State taxation of such property is impliedly prohibited. . . ."
government as they were intended to serve it, or does hinder the efficient exercise of their power. A tax upon their property has no such necessary effect. It leaves them free to discharge the duties they have undertaken to perform. A tax upon their operations is a direct obstruction to the exercise of Federal powers."
"The case differs toto coelo from that wherein the government enters into a contract with an individual or corporation to perform services necessary for carrying on the functions of government, as for carrying the mails, or troops, or supplies, or for building ships or works for government use. In those cases, the government has no further concern with the contractor than in his contract and its execution. It has no concern with his property or his faculties independent of that. How much he may be taxed by, or what duties he may be obliged to perform towards, his state is of no consequence to the government so long as his contract and its execution are not interfered with. In that case, the contract is the means employed for carrying into execution the powers of the government, and the contract alone, and not the contractor, is exempt from taxation or other interference by the State government."
The question of immunity from taxation of the earnings of an independent contractor under a government contract arose in Metcalf & Eddy v. Mitchell, 269 U.S.
514. The services were rendered to a political subdivision of a state, and the contractor's earnings were held to be subject to the federal income tax. That was a pivotal decision, for we had to meet the question whether the earnings of the contractor stood upon the same footing as interest upon government securities or the income of an instrumentality of government. It is true that the tax was laid upon net income. But if the tax upon the earnings of the contractor had been regarded as imposing a direct burden upon a governmental agency, the fact that the tax was laid upon net income would not save it under the doctrine of Gillespie v. Oklahoma, supra. And if the doctrine of the immunity of interest upon government bonds had been deemed to apply, the tax would have been equally bad whether the tax was upon net or gross income. The ruling in Pollock v. Farmers' Loan & Trust Co., supra, related to net income. The uniform ruling in such a case has been that the interest upon government securities cannot be included in gross income for the purpose of an income tax computed upon net income. The pith of the decision in the case of Metcalf & Eddy v. Mitchell is that government bonds and contracts for the services of an independent contractor are not upon the same footing. The decision was a definite refusal to extend the doctrine of cases relating to government securities and to the instrumentalities of government to earnings under contracts for labor.
"must receive a practical construction which permits both to function with the minimum of interference each with the other, and that limitation cannot be so varied or extended as seriously to impair either the taxing power of the government imposing the tax . . . or the appropriate exercise of the functions of the government affected by it."
Metcalf & Eddy v. Mitchell, supra, pp. 269 U. S. 523-524.
"that any taxation of it by the other would be such a direct interference with the functions of government itself as to be plainly beyond the taxing power."
"any taxation by one government of the salary of an officer of the other, or the public securities of the other, or an agency created and controlled by the other, exclusively to enable it to perform a governmental function,"
was prohibited. We concluded that a nondiscriminatory tax upon the earnings of an independent contractor derived from services rendered to the government could not be said to be imposed "upon an agency of government in any technical sense," and could not "be deemed to be an interference with government, or an impairment of the efficiency of its agencies in any substantial way." Id. at 269 U. S. 524-525.
While the Metcalf case was one of a federal tax, the reasoning and the practical criterion it adopts are clearly applicable to the case of a state tax upon earnings under a contract with the federal government.
net earnings, is not a controlling distinction. Respondent invokes our decisions in the field of interstate commerce, where a tax upon the gross income of the taxpayer derived from interstate commerce has long been held to be an unconstitutional burden. Philadelphia & Southern S.S. Co. v. Pennsylvania, 122 U. S. 326; Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 245 U. S. 297; United States Glue Co. v. Oak Creek, 247 U. S. 321, 247 U. S. 328-329; Fisher's Blend Station v. Tax Commission, 297 U. S. 650, 297 U. S. 655-656.
But the difference is plain. Persons have a constitutional right to engage in interstate commerce free from burdens imposed by a state tax upon the business which constitutes such commerce or the privilege of engaging in it or the receipts as such derived from it. Minnesota Rate Cases, 230 U. S. 352, 230 U. S. 400. Interstate commerce is not an abstraction; it connotes the transactions of those engaged in it, and they enjoy the described immunity in their own right. Here, respondent's activities at the dam sites are local, and not in interstate commerce. Respondent has no constitutional right to immunity from nondiscriminatory local taxation, and the mere fact that the tax in question burdens respondent is no defense. The defense is that the tax burdens the government, and respondent's right is at best, a derivative one. He asserts an immunity which, if it exists, pertains to the government, and which the government disclaims.
Hanover Fire Insurance Co. v. Harding, 272 U. S. 494, 272 U. S. 509-510.
"mere contracts between private corporations and the United States do not necessarily render the former essential governmental agencies, and confer freedom from state control."
Id., pp. 240 U. S. 320-323. The premiums, of course, were paid by those who were required to obtain the bonds, but the facts that the contracts were with the United States, and that the tax was laid upon gross receipts from the writing of such contracts, did not make the tax an invalid exaction.
In both the Alward case and that of the Fidelity & Deposit Company, the argument, pressed here, that the state withheld for its use "a part of every dollar" received by the taxpayer was equally pertinent, and equally unavailing.
tax, although respondent knew of the West Virginia act imposing it, and respondent's estimates of cost did include "compensation and liability insurance, construction bond and property taxes."
"affects the federal government at all, it at most gives rise to a burden which is consequential and remote, and not to one that is necessary, immediate or direct."
But a tax of that sort unquestionably increases the expense of the contractor in performing his service, and may, if it enters into the contractor's estimate, increase the cost to the government. The fact that the tax on the gross receipts of the contractor in the Alward case, supra, might have increased the cost to the government of the carriage of the mails did not impress the Court as militating against its validity.
"be so used, indeed, as to defeat or hinder the operations of the National Government; but it will be safe to conclude, in general, in reference to persons and state corporations employed in government service, that, when Congress has not interposed to protect their property from state taxation, such taxation is not obnoxious to that objection."
See Van Allen v. Assessors, 3 Wall. 573, 70 U. S. 585; Fidelity & Deposit Co. v. Pennsylvania, supra.
We hold that the West Virginia tax, so far as it is laid upon the gross receipts of respondent derived from its activities within the borders of the state, does not interfere in any substantial way with the performance of federal functions, and is a valid exaction. The decree of the District Court is reversed, and the cause is remanded for further proceedings in conformity with this opinion.
See Act of July 3, 1930, c. 847, 46 Stat. 928; H.Doc. No.190, 70th Cong., 1st sess.; Act of August 30, 1935, c. 831, 49 Stat. 1035; H.Doc. No. 31, 73d Cong., 1st Sess.
Prior to May 26, 1933, the tax was three-tenths of one percent, and the assessment on receipts prior to that date was at that rate. Two of the contracts of respondent were made before the rates were changed.
"The Congress shall have Power . . ."
"To exercise exclusive Legislation in all cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings."
"Sec. 3. Acquisition of Lands by United States; Jurisdiction. -- The consent of this State is hereby given to the acquisition by the United States, or under its authority, by purchase, lease, condemnation, or otherwise, of any land acquired, or to be acquired in this State by the United States, from any individual, body politic or corporate, for sites for lighthouses, beacons, signal stations, post offices, customhouses, courthouses, arsenals, soldiers' homes, cemeteries, locks, dams, armor plate manufacturing plants, projectile factories or factories of any kind or character, or any needful buildings or structures or proving grounds, or works for the improvement of the navigation of any watercourse, or work of public improvement whatever, or for the conservation of the forests, or for any other purpose for which the same may be needed or required by the government of the United States. The evidence of title to such land shall be recorded as in other cases."
"Any county, magisterial district, or municipality, whether incorporated under general law or special act of the legislature, shall have power to pay for any such tract or parcel of land and present the same to the government of the United States free of cost, for any of the purposes aforesaid, and to issue bonds and levy taxes for the purpose of paying for the same, and, in the case of a municipal corporation, the land so purchased and presented may be within the corporate limits of such municipality or within five miles thereof: Provided, however, That no such county, magisterial district, or municipality shall, by the issue and sale of such bonds, cause the aggregate of its debt to exceed the limit fixed by the Constitution of this State: Provided further, That the provisions of the Constitution and statutes of this State, or of the special act creating any municipality, relating to submitting the question of the issuing of bonds and all questions connected with the same to a vote of the people, shall, in all respects, be observed and complied with."
"Concurrent jurisdiction with this State in and over any land so acquired by the United States shall be, and the same is hereby, ceded to the United States for all purposes; but the jurisdiction so ceded shall continue no longer than the United States shall be the owner of such lands, and if the purposes of any grant to the United States shall cease, or the United States shall for five consecutive years fail to use any such land for the purposes of the grant, the jurisdiction hereby ceded over the same shall cease and determine, and the right and title thereto shall reinvest in this State. The jurisdiction ceded shall not vest until the United States shall acquire title of record to such land. Jurisdiction heretofore ceded to the United States over any land within this State by any previous acts of the legislature shall continue according to the terms of the respective cessions."
"Sec. 4. Execution of Process and Other Jurisdiction as to Land Acquired by United States. -- The State of West Virginia reserves the right to execute process, civil or criminal, within the limits of any lot or parcel of land heretofore or hereafter acquired by the United States as aforesaid, and such other jurisdiction and authority over the same as is not inconsistent with the jurisdiction ceded to the United States by virtue of such acquisition."
I regret that I am unable to concur in the Court's opinion. I should not set forth my views in detail were I not convinced the decision runs counter to the settled rule that a state may not, by taxation, burden or impede the United States in the exercise of its delegated powers. The judgment seems to me to overrule, sub silentio, a century of precedents, and to leave the application of the rule uncertain and unpredictable.
"The attempt to use it [the power of taxation] on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse because it is the usurpation of a power which the people of a single state cannot give. We find, then, on just theory, a total failure of this original right [of the states] to tax the means employed by the government of the Union, for the execution of its powers. [Footnote 2/2]"
"The States have no power, by taxation or otherwise, to retard, impede, burden or in any manner control the operations of the constitutional laws enacted by congress to carry into execution the powers vested in the general government."
I agree that the gross receipts tax laid by West Virginia upon the appellee's transactions with the United States is not upon the government as such, upon its property, or upon its officers.
The court has, moreover, repeatedly held a tax nominally upon one who contracts with the government was in effect and in fact imposed upon the operations of the latter. Thus, an excise upon a telegraph company which, under contract with the United States, transmits government messages, whether the tax be at a given sum per message [Footnote 2/16] or in the form of a license tax upon all business, private and governmental, [Footnote 2/17] is prohibited because it imposes a burden upon the operations of the United States. The cases so holding are sought to be distinguished by the circumstance that the telegraph companies carrying the messages of the United States were by federal statute given the privilege of using the post roads, and it is said that this in some way gave them a peculiar status which rendered their gross receipts untaxable.
"The tax is the same on every message sent, and because it is sent. . . . Clearly, if a fixed tax for every two thousand pounds of freight carried is a tax on the freight, or for every measured ton of a vessel a tax on tonnage, or for every passenger carried a tax on the passenger, or for the sale of goods a tax on the goods, this must be a tax on the messages. . . . As to the government messages, it is a tax by the State on the means employed by the government of the United States to execute its constitutional powers, and therefore void. It was so decided in McCulloch v. Maryland, 4 Wheat. 316, and has never been doubted since."
That the privileges granted telegraph companies by federal law, had no bearing upon the validity of the tax is shown by Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530, and Massachusetts v. Western Telegraph Co., 141 U. S. 40, in which state taxes on the property and franchises of companies, operating under the same statute as the Telegraph Company in the Texas case, were sustained because not on the transactions between the carrier and the United States.
"the tax . . . is a tax upon the contract subsisting between the government and the individual. It bears directly upon that contract, while subsisting and in full force. The power operates upon the contract the instant it is framed and must imply a right to affect that contract."
The government's obligation is for the payment both of principal and interest, and an exaction which bears upon either of these features of the obligation is prohibited.
"But we fail to perceive . . . that such certificates, issued as a means of executing constitutional powers of the government other than of borrowing money, are not as much beyond control and limitation by the States through taxation as bonds or other obligations issued for loans of money."
Many sorts of imposts, however, which bear merely upon the obligee of a government contract for the exercise of a privilege having no relation to the contractual nexus between him and the government have been sustained.
"If the states and corporations throughout the Union possess the power to tax a contract for the loan of money, what shall arrest this principle in its application to every other contract? What measure can government adopt, which will not be exposed to its influence?"
leased land before any sale or segregation of the equitable interests of the government as guardian, is void as burdening and impeding an operation of the government. [Footnote 2/26] A sales tax on commodities sold to the government, though laid upon the seller at a given rate per unit sold, is also bad as directly burdening the government's transactions. [Footnote 2/27] A tax on storage or withdrawal from storage essential to the sale of a commodity contracted to be delivered to the United States is in the same class as a tax on sales to the government. [Footnote 2/28] On the other hand, a sales tax upon articles purchased by a government contractor, [Footnote 2/29] or a net income tax laid upon his income, is valid. [Footnote 2/30] The reason is that exactions of the latter sort do not impinge upon or directly affect the transaction between him and the government; do not affect the government's choice of means for executing its powers.
fined or taxed for doing so? We have not yet heard these questions answered in the affirmative. It is true, that the property of the contractor may be taxed, as the property of other citizens. . . . But we do not admit, that the act of purchasing, or of conveying the articles purchased, can be under state control."
"The right of the United States to make such purchases is derived from the Constitution. The petitioner's right to make sales to the United States was not given by the State, and does not depend on state laws; it results from the authority of the national government under the Constitution to choose its own means and sources of supply. While Mississippi may impose charges upon petitioner for the privilege of carrying on trade that is subject to the power of the State, it may not lay any tax upon transactions by which the United States secures the things desired for its governmental purposes."
As in the Panhandle case, so in the present, the receipt of the thing contracted for constitutes the transaction by which the tax is measured, and on which the burden rests. We may thus paraphrase what was there said: to use the value and amount of the goods and services furnished to the United States as a measure of the tax is in substance and effect to tax the transaction itself. The amount of the tax rises and falls in direct ratio to the contract value of the goods and services rendered to the government. This is to tax the sale, and that is to tax the United States.
the execution of its powers. That test is whether the taxing statute discriminates against the government and in favor of other taxpayers. He frankly admits that, if the proposed criterion be adopted, we must overrule Indian Motocycle Co. v. United States, 283 U. S. 570; Panhandle Oil Co. v. Mississippi ex rel. Knox, supra, and Graves v. Texas Co., 298 U. S. 393. He professes himself, as I am, unable to distinguish a sales tax or a tax upon storage preliminary to sale to the United States from a gross receipts tax upon goods and services furnished the government. In a brief filed as amicus curiae in Graves v. Texas Co., supra, he urged the court to hold such a tax imposed on gasoline under contract to the United States invalid as an unconstitutional impediment and burden upon the operations of the government. [Footnote 2/33] It is said that these cases have been distinguished. But, in the cases distinguished from them, the tax was found to be one on the property of a contractor with the United States, or on its net income, not on the gross receipts of his contract with the government. To distinguish them from the present case is not to rely upon any principle, but upon the mere name or label given to a tax. Such distinctions only serve to confuse.
amount of the normal tax burden, presents no interference with its operations."
Again, he says that the imposition of the tax in question "is in no sense a threat to the capacity of the government to perform its functions."
Thus, it appears that, in his view, a nondiscriminatory state tax is to be judged not by the "burden" it imposes, but by the extent of its "interference" with the functioning of government. If this be the test, no tax, however great, can prevent such functioning, so long as the United States' taxing and borrowing powers remain adequate to meet the ordinary expenses of its operations and the added cost of state taxes thereon. The adoption of any such theory would require the overruling not only of the three decisions the Solicitor General singles out for deletion, but literally scores of others, beginning with McCulloch v. Maryland and ending with Graves v. Texas Co., 298 U. S. 393, decided at the 1935 term in accordance with the views then earnestly pressed upon us by the Solicitor General.
It is not clear to what extent the court's opinion adopts the doctrine advocated by the government. It is said merely that the appellee is an independent contractor, that the tax is nondiscriminatory and is not laid upon the contract of the government, and it is suggested that if, in the view of Congress, the burden of such a tax becomes too heavy, Congress has the means of redress. Whether one or all of these factors is requisite to justify the exaction we are not told.
the taxable net income was to be calculated. In accordance with all of this Court's applicable decisions, the tax was held not to be upon the state or its contract with the taxpayer, not upon an instrumentality or means chosen by the state for executing its powers, not directly upon the amount of the taxpayer's compensation received from the state. The exaction was not, as here, of a proportion of each dollar paid by the government. It was upon net income remaining after allowable deductions from gross.
citizens of the state of Pennsylvania as such. They did not differ from transactions with federal officers and employees whereby the latter procured any other sort of goods or service. [Footnote 2/35] Of course, the mere fact that a contractual relation, that of suretyship, was created between the Fidelity Company and the United States, was not, in and of itself, sufficient to relieve the company of the burden of paying a local tax for the privilege of doing business with its customers.
Alward v. Johnson, 282 U. S. 509, is cited as an instance where a gross receipts tax incident upon the consideration paid the contractor by the United States was sustained. Examination of the case demonstrates that the contrary is true. Alward was engaged in operating an automotive stage line between points in California. In his business, he employed automotive property and used the state highways. In classifying property for taxation the state separately classified property of persons carrying on such a business as his and laid a tax on this class of property, in lieu of all other taxes at the rate of 4 1/2 percent of gross receipts. Other classes of property were taxed at a percentage of value. As the major portion of Alward's gross receipts arose from a contract for carrying United States mails, he insisted that the tax was invalid because, by virtue of his contract with the government, he became a federal agency immune from taxation upon his gross receipts.
under the commerce clause in which the intrastate property of an interstate carrier was either directly taxed or was taxed by use of a percentage of gross receipts in lieu of all other taxes, including property taxes, in order to reach a fair measure of the taxable value of the carrier's intrastate property. Pullman Co. v. Richardson, 261 U. S. 330; Hopkins v. Southern California Tel. Co., 275 U. S. 393. It was pointed out that the tax was not on gross receipts as such, and did not bear upon the contract between the taxpayer and the government. In the instant case, the tax is admittedly an excise for revenue imposed in addition to property taxes and foreign corporation fees paid by the appellee.
It may be considered, though I do not think with reason, that the conclusion of the court that the tax was a property tax and not a tax upon gross receipts as such was erroneous, but, even if this be conceded, it cannot be contended that the case stands as authority for the proposition that a gross receipts tax as such upon the earnings of a government contractor, from his government contract, is not a burden or impediment upon the operations of the United States within the rule of federal immunity.
"upon all tobacco and snuff manufactured in or imported into the United States, and hereafter sold by the manufacturer or importer, or removed for consumption or sale"
per pound "to be paid by the manufacturer or importer thereof." Upon analysis of the statute, it was concluded that the tax was upon the manufacture, and that payment was merely postponed until removal or sale. The tax did not vary in amount with the price received for the tobacco, and was not in terms upon its sale. Upon this ground, the Indian Motocycle Co. case and the Panhandle case were distinguished.
What was said by Mr. Justice Bradley, dissenting in Railroad Company v. Peniston, 18 Wall. 5, 85 U. S. 38, when read in the light of its context, has no bearing upon the issue here presented. In McCulloch v. Maryland, in holding that a tax upon the operations of the United States Bank invaded the federal immunity, Chief Justice Marshall said: "It [the immunity] does not extend to a tax paid by the real property of the bank, in common with the other real property within the state."
such a tax might lawfully be laid upon the property of one who was a mere contractor with the United States, it could not be laid upon the local assets of a federal corporate instrumentality. The challenged tax was not upon the franchise of the corporation granted by the government, not on its right to exist within the state nor upon the gross receipts from its operations. Confessedly the property of a contractor with the government is more remote from the government's operations than is the property of a government instrumentality. If the latter may be locally taxed a fortiori, the former may, and the language of Mr. Justice Bradley applied only to that situation, and not to a gross receipts tax such as we have here.
imposed upon the government itself. Certainly the principle of the tax immunity of the sovereign itself is too firmly established now to be reexamined."
The short answer is that the immunity from state taxation upon the means, the operations, and the instruments of the government is just as firmly established as is the immunity from taxation of the government's property or offices or posts created by it, and that neither class of taxation can be justified by the fact that the burden on the government is uniform with that laid on others.
"Here, the question is whether the State can interrupt the acts of the general government itself. With regard to taxation, no matter how reasonable, or how universal and undiscriminating, the State's inability to interfere has been regarded as established since McCulloch v. Maryland, 4 Wheat. 316."
is aimed at the taxpayer because of his relation to the government. Of course, a state cannot lay a heavier burden upon those contracting with the government simply because they are such contractors. A discrimination of that nature on its face spells a hostile purpose, an intent to hinder and burden the government, to impede its operations, and to discourage dealing with it. But the question of discrimination has no place in the consideration of the legality of an exaction laid directly upon the government, upon its operations, or upon the means or instrumentalities it has chosen for executing its powers.
"This principle is pertinent only when there is no power to tax a particular subject, and has no relation to a case where such right exists. In other words, the power to destroy which may be the consequence of taxation is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even although it happens that in some particular instance no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope. "
"The decision in that case was not put upon any consideration of degree, but upon the entire absence of power on the part of the States to touch, in that way at least, the instrumentalities of the United States; 17 U. S. 4 Wheat. 429, 17 U. S. 430, and that is the law today. [Footnote 2/40]"
"It is obvious that the same power which imposes a light duty can impose a very heavy one, one which amounts to a prohibition. Questions of power do not depend on the degree to which it may be exercised. If it may be exercised at all, it must be exercised at the will of those in whose hands it is placed. If the tax may be levied in this form by a state, it may be levied to an extent which will defeat the revenue by impost, so far as it is drawn from importations into the particular state. [Footnote 2/41]"
"Where the principle applies it is not affected by the amount of the particular tax or the extent of the resulting interference, but is absolute. McCulloch v. Maryland, 4 Wheat. 316, 17 U. S. 430; United States v. Baltimore & Ohio R. Co., 17 Wall. 322, 84 U. S. 327; Johnson v. Maryland, 254 U. S. 51, 254 U. S. 55-56; Gillespie v. Oklahoma, 257 U. S. 501, 257 U. S. 505; Crandall v. Nevada, 6 Wall. 35, 73 U. S. 44-46. [Footnote 2/42]"
reverse of saying the power to tax federal means and operations exists in the states subject to veto by Congress of any exorbitant exercise of the power. And it may be pertinent to suggest that if, as the Court has always held, the immunity is reciprocal, the state legislatures, by a parity of reasoning, ought to have the power to prohibit federal taxes upon state operations if they be deemed immoderate.
It must be evident that, if the principle of federal immunity is to be preserved, if all that the court has said respecting it is not to be set aside, the gross receipts tax under review cannot be rescued from condemnation by the circumstances that it bears upon an independent contractor, does not discriminate, and is not so burdensome as seriously to interfere with governmental functions.
taxpayer derived from interstate commerce has long been held to be an unconstitutional burden. . . ."
"But the difference is plain. Persons have a constitutional right to engage in interstate commerce free from burdens imposed by a state tax upon the business which constitutes such commerce or the privilege of engaging in it or the receipts as such derived from it."
"The rule as to instrumentalities of the United States on the other hand is absolute in form and at least stricter in substance. [Footnote 2/45]"
in McCulloch v. Maryland and ever since consistently applied in the decisions of the court. I think that the judgment should be affirmed.
These views with respect to the nature of the tax render it unnecessary to express any opinion as to the asserted exclusive federal jurisdiction over the area within which the appellee pursued the activities which are the subject of the exaction.
MR. JUSTICE McREYNOLDS, MR. JUSTICE SUTHERLAND, and MR. JUSTICE BUTLER join in this opinion.
Indian Motocycle Co. v. United States, 283 U. S. 570, 283 U. S. 575; Board of Trustees v. United States, 289 U. S. 48, 289 U. S. 59; Helvering v. Powers, 293 U. S. 214, 293 U. S. 225.
McCulloch v. Maryland, 4 Wheat. 316, 17 U. S. 430; Weston v. Charleston, 2 Pet. 449, 27 U. S. 467.
Clallam County v. United States, 263 U. S. 341, 263 U. S. 344.
McGoon v. Scales, 9 Wall. 23, 76 U. S. 27; Tucker v. Ferguson, 22 Wall. 527, 89 U. S. 572; Van Brocklin v. Tennessee, 117 U. S. 151; Wisconsin Central R. Co. v. Price County, 133 U. S. 496, 133 U. S. 504; Irwin v. Wright, 258 U. S. 219, 258 U. S. 228. But property acquired from the Government, upon its severance, loses the immunity in the hands of the transferee. Forbes v. Gracey, 94 U. S. 762; Group No. 1 Oil Corp. v. Bass, 283 U. S. 279; Indian Territory Oil Co. v. Board, 288 U. S. 325.
Dobbins v. Commissioners, 16 Pet. 435; Collector v. Day, 11 Wall. 113. But the exemption does not extend to taxes laid upon his privately owned property or a sales tax on his personal purchases, even though they be of articles he uses in connection with his performance of his government work. Dyer v. City of Melrose, 215 U.S. 594; Tirrell v. Johnston, 293 U.S. 533; 86 N.H. 530.
Clallam County v. United States, 263 U. S. 341; New Brunswick v. United States, 276 U. S. 547; New York ex rel. Rogers v. Graves, 299 U. S. 401. For the same reason, a state tax which burdens the fiscal operations of a territory must fall: Farmers' & Mechanics' Savings Bank v. Minnesota, 232 U. S. 516.
Interstate railroad: Railroad Co. v. Peniston, 18 Wall. 5; National banks: McCulloch v. Maryland, 4 Wheat. 316; Smith v. Kansas City Title & Trust Co., 255 U. S. 180.
Osborn v. Bank, 9 Wheat. 738; Railroad Co. v. Peniston, 18 Wall. 5; Owensboro National Bank v. Owensboro, 173 U. S. 664.
Railroad Co. v. Peniston, 18 Wall. 5; Indian Territory Oil Co. v. Board, 288 U. S. 325, 288 U. S. 327-328.
Thomson v. Pacific Railroad, 9 Wall. 579; Western Union Tel. Co. v. Massachusetts, 125 U. S. 530; Massachusetts v. Western Union Tel. Co., 141 U. S. 40; Baltimore Shipbuilding & Dry Dock Co. v. Baltimore, 195 U. S. 375; Fidelity & Deposit Co. v. Pennsylvania, 240 U. S. 319; Choctaw, O. & G. R. Co. v. Mackey, 256 U. S. 531; Susquehanna Power Co. v. Tax Commission, 283 U. S. 291; Broad River Power Co. v. Query, 288 U. S. 178; Federal Compress & Warehouse Co. v. McLean, 291 U. S. 17.
Choctaw, O. & Gulf R. Co. v. Harrison, 235 U. S. 292; Gillespie v. Oklahoma, 257 U. S. 501; Jaybird Mining Co. v. Weir, 271 U. S. 609.
Indian Territory Oil Co. v. Board, 288 U. S. 325; Taber v. Indian Territory Oil Co., 300 U. S. 1.
The Solicitor General's argument, noticed later, would, however, validate a tax of any description imposed upon federal instrumentalities, provided the exaction were nondiscriminatory.
Osborn v. Bank, 9 Wheat. 738, 22 U. S. 867.
Federal Land Bank v. Crosland, 261 U. S. 374.
Telegraph Co. v. Texas, 105 U. S. 460.
Leloup v. Port of Mobile, 127 U. S. 640; Williams v. Talladega, 226 U. S. 404.
Weston v. Charleston, 2 Pet. 449.
Bank of Commerce v. New York City, 2 Black 620; Bank Tax case, 2 Wall. 200; Bank v. Supervisors, 7 Wall. 26; Home Savings Bank v. Des Moines, 205 U. S. 503; Missouri v. Gehner, 281 U. S. 313.
Northwestern Ins. Co. v. Wisconsin, 275 U. S. 136; National Life Ins. Co. v. United States, 277 U. S. 508. And no form of words or subterfuge can save an act the intent of which is to reach the income from federal bonds. Miller v. Milwaukee, 272 U. S. 713; Macallen Co. v. Massachusetts, 279 U. S. 620, 279 U. S. 629.
The Banks v. The Mayor, 7 Wall. 16, 74 U. S. 25.
Home Ins. Co. v. New York, 119 U. S. 129; Home Ins. Co. v. New York, 134 U. S. 594.
Plummer v. Coler, 178 U. S. 115; Greiner v. Lewellyn, 258 U. S. 384.
Hibernia Savings Society v. San Francisco, 200 U. S. 310.
Weston v. Charleston, 2 Pet. 449, 27 U. S. 465.
Jaybird Mining Co. v. Weir, 271 U. S. 609.
Indian Motocycle Co. v. United States, 283 U. S. 570; Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218; Grayburg Oil Co. v. Texas, 278 U.S. 582; 3 S.W.2d 427. Compare 25 U. S. Maryland, 12 Wheat. 419, 25 U. S. 440.
Graves v. Texas Co., 298 U. S. 393.
Trinityfarm Construction Co. v. Grosjean, 291 U. S. 466.
General Construction Co. v. Fisher, 295 U.S. 715; 149 Or. 84, 39 P.2d 358; Burnet v. A. T. Jergins Trust, 288 U. S. 508.
Alward v. Johnson, 282 U. S. 509.
In this brief, the Solicitor General stated that figured upon the estimated purchases of the Government for the then current fiscal year, state sales taxes on gasoline of 4 cents per gallon, imposed by all the states, would impose an added burden upon the United States of $4,479,661.
See the cases cited in note 10, supra.
Cornell v. Coyne, 192 U. S. 418; Hope Natural Gas Co. v. Hall, 274 U. S. 284; Wheeler Lumber Bridge & Supply Co. v. United States, 281 U. S. 572. The same problem arises in connection with taxation alleged to burden interstate commerce. See American Manufacturing Co. v. St. Louis, 250 U. S. 459.
See the cases cited in notes 17, 18 and 19.
Western Union Tel. Co. v. Texas, 105 U. S. 460; Williams v. Talladega, 226 U. S. 404; Indian Motocycle Co. v. United States, 283 U. S. 570; Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218; Graves v. Texas Co., 298 U. S. 393.
Johnson v. Maryland, 254 U. S. 51, 254 U. S. 55.
Brown v. Maryland, 12 Wheat. 419, 25 U. S. 439.
Indian Motocycle Co. v. United States, 283 U. S. 570, 283 U. S. 575.
Van Allen v. Assessors, 3 Wall. 573.
Telegraph Co. v. Texas, 105 U. S. 460, 105 U. S. 465; Western Union Telegraph Co. v. Taggart, 163 U. S. 1, 163 U. S. 14; Western Union Telegraph Co. v. Kansas, 216 U. S. 1, 216 U. S. 32; U.S. Express Co. v. Minnesota, 223 U. S. 335, 223 U. S. 344; Choctaw, O. & G.R. Co. v. Harrison, 235 U. S. 292, 235 U. S. 299; Kansas City, Ft. S. & M. Ry. Co. v. Botkin, 240 U. S. 227, 240 U. S. 232; Gillespie v. Oklahoma, 257 U. S. 501, 257 U. S. 504-505; Northwestern Mutual Life Ins. Co. v. Wisconsin, 275 U. S. 136, 275 U. S. 140; Macallen Co. v. Massachusetts, 279 U. S. 620, 279 U. S. 627; Indian Motocycle Co. v. United States, 283 U. S. 570, 283 U. S. 575; Eastern Air Transport, Inc. v. So. Carolina Tax Commission, 285 U. S. 147, 285 U. S. 152; Fox Film Corp. v. Doyal, 286 U. S. 123, 286 U. S. 126; Liggett & Myers Tobacco Co. v. United States, 299 U. S. 383, 299 U. S. 387.
Gillespie v. Oklahoma, 257 U. S. 501, 257 U. S. 505.
Pullman's Palace-Car Co. v. Pennsylvania, 141 U. S. 18; Western Union Tel. Co. v. Taggart, 163 U. S. 1; Old Dominion S.S. Co. v. Virginia, 198 U. S. 299; United States Express Co. v. Minnesota, 223 U. S. 335; Pullman Co. v. Richardson, 261 U. S. 330. And, as in the case of agents of the federal government or contractors with it, a state may measure the value of the property within its borders by a receipts tax in lieu of all property taxes. Compare United States Express Co. v. Minnesota, 223 U. S. 335; Cudahy Packing Co. v. Minnesota, 246 U. S. 450; Pullman Co. v. Richardson, 261 U. S. 330, with Alward v. Johnson, 282 U. S. 509.
Philadelphia & Southern S.S. Co. v. Pennsylvania, 122 U. S. 326; Galveston, H. & S.A. Ry. Co. v. Texas, 210 U. S. 217; Meyer v. Wells, Fargo & Co., 223 U. S. 298.
Compare Western Union Tel. Co. v. Kansas, 216 U. S. 1, and Ozark Pipe Line Corp. v. Monier, 266 U. S. 555, with California v. Central Pacific R. Co., 127 U. S. 1; Owensboro National Bank v. Owensboro, 173 U. S. 664; Third National Bank v. Stone, 174 U. S. 432, and Louisville v. Third National Bank, 174 U. S. 435.
Compare Cook v. Pennsylvania, 97 U. S. 566, and Bowman v. Continental Oil Co., 256 U. S. 642, with Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218.
Compare Cook v. Pennsylvania, 97 U. S. 566; Fargo v. Michigan, 121 U. S. 230; Crew Levick Co. v. Pennsylvania, 245 U. S. 292; New Jersey Bell Tel. Co. v. State Board, 280 U. S. 338; Fisher's Blend Station v. Tax Commission, 297 U. S. 650; Puget Sound Stevedoring Co. v. Tax Commission, 302 U. S. 90, with Western Union Tel. Co. v. Texas, 105 U. S. 460.
Compare Shaffer v. Carter, 252 U. S. 37; United States Glue Co. v. Oak Creek, 247 U. S. 321, and Atlantic Coast Line R. Co. v. Daughton, 262 U. S. 413, with General Construction Co. v. Fisher, 295 U.S. 715; 149 Or. 84, 39 P.2d 358, and Burnet v. A. T. Jergins Trust, 288 U. S. 508. But see Gillespie v. Oklahoma, 257 U. S. 501, and Burnet v. Coronado Oil & Gas Co., 285 U. S. 393.
Compare East Ohio Gas Co. v. Tax Commission, 283 U. S. 465, with 41 U. S. Erie County Commissioners, 16 Pet. 435, and New York ex rel. Rogers v. Graves, 299 U. S. 401.
Compare Eastern Air Transport, Inc. v. South Carolina Tax Commission, 285 U. S. 147, with Trinityfarm Construction Co. v. Grosjean, 291 U. S. 466, and Tirrell v. Johnston, 293 U.S. 533.

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 v.