Source: https://www.law.cornell.edu/supremecourt/text/306/62
Timestamp: 2019-04-21 22:15:37+00:00

Document:
FELT & TARRANT MFG. CO. v. GALLAGHER et al.
Messrs. A. Calder MacKay and Thomas R. Dempsey, both of Los Angeles, Cal., for appellant.
Mr. James J. Arditto, of San Francisco, Cal., for appellees.
Appellant seeks an injunction prohibiting the state officers from enforcing against it the California Use Tax Act of 1935. Cal.Stat.1935, Ch. 361, p. 1297, as amended by Cal.Stat.1937, Chs. 401, 671 and 683, pp. 1327, 1874, 1936. Counsel do not question the right of the state to collect this tax from the user, etc., but they say that, in the circumstances here disclosed, the officers may not compel appellant to serve as an agent for collecting the tax as they are threatening to do.
The trial court, three judges, dismissed the bill upon motion.
The Use Tax Act (sec. 6, St.Cal.1937, p. 1938) directs retailers maintaining a place of business in the state, and making sales of tangible personal property for storage, use or other consumption therein, to collect from the purchaser the tax imposed.
Appellant presents for our consideration two points: (1) The statute as construed and applied by the appellees to the appellant is repugnant to Art. 1, section 8, clause 3 of the Federal Constitution, U.S.C.A. (2) The threatened enforcement of the statute would deprive appellant of his property without Due Process of Law contrary to the Fourteenth Amendment, U.S.C.A.
The appellant, an Illinois corporation, carried on no intrastate operations in California and is not subject to its jurisdiction. Such business as it transacts in California is interstate in character. California, therefore, lacks the power to require it (1) to act as the state's collecting agent with respect to use tax which may become due from California storers, users or consumers, or (2) to insure payment of such tax if it fails to make collections from the tax debtors, or (3) otherwise to act as a 'retailer' as defined by the Act and the appellees. The treatment of the appellant as a retailer subject to the provisions of the California Use Tax Act is a direct burden upon interstate commerce prohibited by the Federal Constitution. Numerous provisions of the statute, if applied, would deprive appellant of its property without due process of law.
The trial court thought that both contentions were foreclosed by what was said and ruled in Bowman et al. v. Continental Oil Co., 256 U.S. 642, 650, 41 S.Ct. 606, 609, 65 L.Ed. 1139, Monamotor Oil Co. v. Johnson et al., 292 U.S. 86, 93, 95, 54 S.Ct. 575, 578, 78 L.Ed. 1141, and Henneford et al. v. Silas Mason Co. et al., 300 U.S. 577, 582, 583, 57 S.Ct. 524, 526, 527, 81 L.Ed. 814. And we agree with that conclusion.
'The tax is not upon the operations of interstate commerce, but upon the privilege of use after commerce is at an end.
The challenged judgment must be affirmed.
Mr. Justice ROBERTS took no part in the consideration or decision of this cause.
McGOLDRICK, City Comptroller, v. FELT & TARRANT MFG. CO. SAME v. A. H. DU GRENIER, Inc., et al.
COLORADO NAT. BANK F DENVER v. BEDFORD, Treasurer of State of Colorado.
INTERNATIONAL HARVESTER CO. et al. v. DEPARTMENT OF TREASURY OF STATE OF INDIANA et al.
McLEOD, Commissioner of Revenues of Arkansas, v. J. E. DILWORTH CO. et al.

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