Source: https://supreme.justia.com/cases/federal/us/377/341/
Timestamp: 2019-04-19 04:49:12+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 377 › Department of Revenue v. James B. Beam Co.
Held: A tax on the whisky, which retained its character as an import in the original package, was clearly proscribed by the Export-Import Clause, which was not, insofar as intoxicants are concerned, repealed by the Twenty-first Amendment. Pp. 377 U. S. 341-346.
This case requires consideration of the relationship between the Export-Import Clause [Footnote 1] and the Twenty-first Amendment [Footnote 2] of the Constitution.
The Kentucky Court of Appeals held that the tax in question, although an occupational or license tax in form, is a tax on imports in fact. "[T]he incidence of the tax is the act of transporting or shipping the distilled spirits under consideration into this state." 367 S.W.2d at 270. The court further held that the tax cannot be characterized as an inspection measure in view of the fact that neither the statute nor the regulations implementing it provide for any actual inspection. Concluding, therefore, that the tax falls squarely within the interdiction of the Export-Import Clause, the court held that this provision of the Constitution has not been repealed, insofar as intoxicants are concerned, by the Twenty-first Amendment. [Footnote 3] Accordingly, the court ruled that the respondent was entitled to a refund of the taxes it had paid. We agree with the Kentucky Court of Appeals, and affirm the judgment before us.
Id. at 80 U. S. 34. See Hooven & Allison Co. v. Evatt, 324 U. S. 652.
"[t]his Court made clear in the early years following adoption of the Twenty-first Amendment that, by virtue of its provisions, a State is totally unconfined by traditional Commerce Clause limitations when it restricts the importation of intoxicants destined for use, distribution, or consumption within its borders. [Footnote 4]"
Hooven & Allison Co. v. Evatt, 324 U. S. 652, 324 U. S. 665-666.
Id. at 299 U. S. 64. In Gordon v. Texas, 355 U. S. 369, the Court, in a brief per curiam, affirmed a Texas conviction for illegal possession of 11 bottles of rum which had been imported without a permit and to which the required Texas tax stamps were not affixed. The state tax in that case had been held to be not a tax on imports. [Footnote 6] It is clear that the gravamen of the offense in Gordon was the failure to obtain, or even apply for, a permit as required by state law. Such permits, in addition to other functions, serve to channelize the traffic in liquor, and thus to prevent diversion of that traffic into unauthorized channels. In the present case, the respondent has both applied for and obtained the requisite permit. The relief it requests is not the abrogation of that requirement, but simply a refund of the import tax.
See State Board v. Young's Market Co., 299 U. S. 59; Indianapolis Brewing Co. v. Liquor Comm'n, 305 U. S. 391; Finch & Co. v. McKittrick, 305 U. S. 395.
Prior to the Eighteenth Amendment, Congress passed the Webb-Kenyon Act and the Wilson Act, giving the States a large degree of autonomy in regulating the importation and distribution of intoxicants. Those laws are still in force. 27 U.S.C. §§ 121, 122. In De Bary & Co. v. Louisiana, 227 U. S. 108, the Court upheld under the Wilson Act a Louisiana license tax imposed on the business of selling in their original packages wines and liquors imported from abroad. There is nothing in that decision, nor in the language of either the Wilson Act or the Webb-Kenyon Act, to support the view that Congress intended by those laws to consent to state taxation upon importation of liquor.
Twenty-first Amendment does mean, I believe, is that, whenever liquor imported from anywhere outside the State, including foreign countries, is transported physically into a State, there to come to rest to be stored for sale and distribution, it then and there becomes a state problem, and, like all other liquors, is subject to state laws of all kinds. It cannot be treated as if it were liquor passing straight through the State -- although, even then, the State would have the power to impose regulations to prevent diversions or other possible evils. See Carter v. Virginia, 321 U. S. 131 (1944). Whatever may have been the virtue or the constitutional soundness of the fiction that articles imported from abroad are "imports" so long as they remain "in their original packages," see Hooven & Allison Co. v. Evatt, 324 U. S. 652 (1945), and dissent at 324 U. S. 686-691, that doctrine was expressly attacked in the Senate debate on the Twenty-first Amendment as rendering the States "powerless to protect themselves against the importation of liquor into the States." * 76 Cong.Rec. 4171 (1933). The Amendment was meant to bury that obstacle to state power over liquor, and the doctrine of "original package," which the Senate consciously rejected, should not be revived after 30 years' interment, once again to be used to deprive States of power the Senate so clearly wanted them to have and the people so clearly granted them. Section 2 of the Amendment, born of long and bitter experiences in the field of liquor regulation, should not be frustrated by us.

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