Source: http://supreme.nolo.com/us/80/29/case.html
Timestamp: 2019-04-24 06:23:03+00:00

Document:
1. Goods imported from a foreign country, upon which the duties and charges at the custom house have been paid are not subject to state taxation whilst remaining in the original cases, unbroken and unsold, in the hands of the importer, whether the tax be imposed upon the goods as imports or upon the goods as part of the general property of the citizens of the state which is subjected to an ad valorem tax.
2. Goods imported do not lose their character as imports and become incorporated into the mass of property of the state until they have passed from the control of the importer, or been broken up by him from their original cases.
"No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports"
Upon the refusal, one Austin, at the time collector of taxes for the City and County of San Francisco, levied upon the cases of wine thus stored for the amount of the tax assessed, and was about to sell them when Low and the others paid the amount and the charges incurred under protest. They then brought the present action in one of the district courts of the state to recover back the money paid, there arguing that the illegality of the tax was settled by the case of Brown v. State of Maryland, [Footnote 2] in which this Court declared an act of the State of Maryland requiring all persons who should sell imported goods by wholesale, bale, or package to take out a license from the state, for which they were required to pay $50, to be in conflict with the provision of the Constitution of the United States above quoted -- this Court there holding that the license was a tax upon the articles imported, that it intercepted the goods before they had become mingled with the mass of the property of the state, and therefore that it was a tax upon the goods as imports, and consequently within the constitutional inhibition.
The district court gave judgment for the plaintiffs, holding that the law under which the tax was levied was void.
state, simply because it was still the property of the importer, in the original packages in which it was imported."
"We see nothing in this which even tends to show that the property had not become incorporated with the general wealth of the state. We see no reason why imported goods exposed in the store of a merchant for sale do not constitute a portion of the wealth of the state, as much as domestic goods similarly situated. Nor do we see the slightest difference whether the importer is also the merchant who sells or whether the goods are in the original packages or not. In either case, the goods are exposed for sale in the markets for the profit which may be realized from selling. They may be equally the basis of credit, and alike they require and receive the benefit of the police laws of the state, and upon every principle of equality should contribute to pay for their protection. Possibly the plaintiff, who is a commission merchant, has in his store champagne wines manufactured in Sonoma or Los Angeles, which he is offering to sell in the same market, in precisely similar packages. In what possible sense can one be said to constitute a portion of the wealth of the state in which the other does not? The object of the constitutional restriction is said to be to prevent the state from imposing a tax upon commerce to discriminate against foreign goods. It certainly cannot be intended to discriminate against domestic productions by exempting foreign goods from its share of the cost of protecting it."
"A tax which is imposed alike upon all the property of the state cannot in any sense be considered a tax upon commerce. It has no tendency to discourage importations. Exemption from the tax might encourage importations, but certainly it was not the purpose of the restriction to compel the state to offer a bounty to foreign produce over domestic. The tax prohibited must be a tax upon the character of the goods as importations, rather than upon the goods themselves as property."
The Supreme Court of California accordingly reversed the decree of the district court, and to that decree of reversal the present writ was taken.
The simple question presented in this case for our consideration is whether imported merchandise, upon which the duties and charges at the custom house have been paid, is subject to state taxation, whilst remaining in the original cases, unbroken and unsold, in the hands of the importer.
The decision of this Court in the case of Brown v. Maryland [Footnote 3] furnishes the answer to the question. The distinction between that case and the present case does not affect the principle affirmed, which equally governs both.
In that case, the question arose whether an act of the Legislature of Maryland requiring importers of foreign goods by the bale or package to pay the state a license tax before selling them in the form and condition in which they were imported was valid and constitutional. The Court held the act in conflict with the provision of the Constitution which declares that no state shall, without the consent of Congress, lay any impost or duty on imports or exports except what may be absolutely necessary for executing its inspection laws.
that when the importer has so acted upon the thing imported that it has become incorporated and mixed up with the mass of property in the country, it has perhaps lost its distinctive character as an import and has become subject to the taxing power of the state, but while remaining the property of the importer in his warehouse in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the Constitution. [Footnote 4]"
In that case it was also held that the authority given to import necessarily carried with it a right to sell the goods in the form and condition -- that is, in the bale or package in which they were imported, and that the exaction of a license tax for permission to sell in such case was not only invalid as being in conflict with the constitutional prohibition upon the states, but also as an interference with the power of Congress to regulate commerce with foreign nations.
judicial mind. In the nature of things, the line of division is in some degree vague and indefinite, and I do not see how it could be drawn more accurately and correctly, or more in harmony with the obvious intention and object of this provision in the Constitution. Indeed, goods imported, while they remain in the hands of the importer, in the form and shape in which they were brought into the country can in no just sense be regarded as a part of that mass of property in the state usually taxed for the support of the state government. [Footnote 6]"
The Supreme Court of California appears from its opinion to have considered the present case as excepted from the rule laid down in Brown v. Maryland, because the tax levied is not directly upon imports as such, and consequently the goods imported are not subjected to any burden as a class, but only are included as part of the whole property of its citizens which is subjected equally to an ad valorem tax. But the obvious answer to this position is found in the fact, which is, in substance, expressed in the citations made from the opinions of Marshall and Taney, that the goods imported do not lose their character as imports and become incorporated into the mass of property of the state until they have passed from the control of the importer or been broken up by him from their original cases. Whilst retaining their character as imports, a tax upon them in any shape is within the constitutional prohibition. The question is not as to the extent of the tax or its equality with respect to taxes on other property, but as to the power of the state to levy any tax. If at any point of time between the arrival of the goods in port and their breakage from the original cases, or sale by the importer, they become subject to state taxation, the extent and the character of the tax are mere matters of legislative discretion.
The argument for the tax on the wines in the present case, that it is not greater than the tax upon other property of the same value held by citizens of the state, would justify a like tax upon securities of the United States, in which form probably a large amount of the property of some of her citizens consists; yet it has been repeatedly held that such securities are exempted from state taxation, whether the tax be imposed directly upon them by name or upon them as forming a part in the aggregate of the property of the taxpayer. [Footnote 8] The rule is general that whenever taxation by a state is forbidden or would interfere with the full exercise of a power vested in the government of the United States over the same subject, it cannot be imposed. Imports, therefore, whilst retaining their distinctive character as such, must be treated as being without the jurisdiction of the taxing power of the state.
25 U. S. 12 Wheat. 419.
25 U. S. 12 Wheat. 441.
46 U. S. 5 How. 575.
See also Almy v. State of California, 24 How. 169; Woodruff v. Parham, 8 Wall. 123; Hinson v. Lott, 8 Wall. 148.
Woodruff v. Parham, 8 Wall. 123; Hinson v. Lott, 8 Wall. 148.
Bank of Commerce v. New York City, 2 Black 620.

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