Source: http://supreme.nolo.com/us/132/472/case.html
Timestamp: 2019-04-23 21:58:11+00:00

Document:
No tax can be imposed by a state upon telegraphic messages sent by a company which has accepted the provisions of Rev.Stat. §§ 5263-5268, or upon the receipts derived therefrom, where the communication is carried either into the state from without or from within the state to another state.
A statute of Alabama imposed a tax "on the gross amount of the receipts by any and every telegraph company derived from the business done by it in this state." The Western union Telegraph Company reported to the board of assessors only its gross receipts received from business wholly transacted within the state. The board required of the company a further return of its gross receipts from messages carried partly within and partly without the state. The company made such farther return and the tax was imposed upon its gross receipts as shown by the two returns. Held that the statute of Alabama thus construed was a regulation of commerce, and that the tax imposed upon the messages comprised in the second return was unconstitutional.
The facts which raised the federal question are stated in the opinion.
This case comes before us on a writ of error to the Supreme Court of the State of Alabama.
The question on which the jurisdiction of this Court depends has been decided in this Court so frequently of late years, several of the decisions having been made since the judgment of the Supreme Court of Alabama was delivered, that but little remains to be said in the present case except to show that it comes within the principles of the cases referred to.
That principle is, in regard to telegraph companies which have accepted the provisions of the Act of Congress of July 24, 1866, sections 5263 to 5268 of the Revised Statutes of the United States, that they shall not be taxed by the authorities of a state for any messages or receipts arising from messages from points within the state to points without or from points without the state to points within, but that such taxes may be levied upon all messages carried and delivered exclusively within the state. The foundation of this principle is that messages of the former class are elements of commerce between the states, and not subject to legislative control of the states, while the latter class are elements of internal commerce, solely within the limits and jurisdiction of the state, and therefore subject to its taxing power. The following cases in this Court have fully developed and established this proposition: Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1; Telegraph Co. v. Texas, 105 U. S. 460; Western Union Tel. Co. v. Massachusetts, 125 U. S. 530; Ratterman v. Western Union Tel. Co., 127 U. S. 411; Leloup v. Port of Mobile, 127 U. S. 640; Fargo v. Michigan, 121 U. S. 230; Philadelphis & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326.
"on the gross amount of the receipts by any and every telegraph, telephone, electric light, and express company derived from the business done by it in this state at the rate of two dollars on the hundred dollars."
the statute is not an unauthorized interference with interstate commerce. This question is fully and ably considered and discussed in the following cases: Western Union Tel. Co. v. Richmond, 26 Grattan 1; Western Union Tel. Co. v. State, 5 Tex. 314; Western Union Tel. Co. v. Mayer, 28 Ohio St. 521, and Port of Mobile v. Leloup, 76 Ala. 401, and is expressly decided in respect to a tax on the gross receipts of railroad companies, though consisting in part of freights received for transportation of merchandise from the state to another state or into the state from another in State Tax on Railway Gross Receipts, 15 Wall. 284, and in Osborne v. Mobile, 16 Wall. 479."
It will be observed that the authorities relied on by the Supreme Court of Alabama to sustain its judgment in this case are mostly decisions of state courts. The case of Western Union Tel. Co. v. State, 55 Tex. 314, and the case of Port of Mobile v. Leloup, 76 Ala. 401, have been reversed by the decisions of this Court in the same cases on writ of error to the state courts. Of the cases already referred to as establishing the proposition which we have stated in the early part of this opinion, those of Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1; Telegraph Co. v. Texas, 105 U. S. 460; Western Union Tel. Co. v. Massachusetts, 125 U. S. 530; Ratterman v. Western Union Tel. Co., 127 U. S. 411, and Leloup v. Port of Mobile, 127 U. S. 640, are all cases in regard to taxes upon telegraph companies by state authorities, and all of them hold that no tax can be imposed upon messages or upon the receipts derived from messages where the communication is carried either into the state from without or from within the state to another state.
to the State of Florida. In the next case, that of Telegraph Co. v. Texas, in which that state had imposed a tax of one cent for every full-rate message sent and one-half cent for every message less than full rate on the business of the Western union Telegraph Company, many of the messages were by the officers of the government, on public business, and a large portion of them were to places outside of the state. The company contested the constitutionality of this law, and the case came to this Court, where it was said that a telegraph company occupies the same relation to commerce as a carrier of messages that a railroad does as a carrier of goods. Both companies are carriers, and their business is commerce itself. The Court then went on to consider the authorities, and said further that it followed that the judgment under review so far as it included the messages sent out of the state, or for the government, on public business, was erroneous. The rule that the regulation of commerce which is confined exclusively within the jurisdiction and territory of the state, and does not affect other nations or states -- that is to say, the purely internal commerce of the state -- belongs exclusively to the state was said to be as well settled as that the regulation of commerce which does affect other nations or states, or Indian tribes, belongs to Congress. The judgment of the Supreme Court of Texas was therefore reversed.
The case of Western Union Tel. Co. v. Massachusetts was a question growing out of the taxation of the telegraph company by the State of Massachusetts, and the same principle we have already considered was asserted in that case, after a general review of the authorities upon the subject.
"We answer the question in regard to which the judges of the circuit court are divided in opinion by saying that a single tax, assessed under the Revised Statutes of Ohio upon the receipts of a telegraph company which were derived partly from interstate commerce and partly from commerce within the state, but which were returned and assessed in gross, and without separation or apportionment, is not wholly invalid, but is invalid only in proportion to the extent that such receipts were derived from interstate commerce,"
and, concurring with the circuit judge in his action enjoining the collection of the taxes on that portion of the receipts derived from interstate commerce and permitting the treasurer to collect the other tax upon property of the company and upon receipts derived from commerce entirely within the limits of the state, the decree was affirmed.
Reversed, and the case remanded to it with directions for further proceedings in conformity with this opinion.

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