Source: https://m.openjurist.org/347/us/590
Timestamp: 2020-01-27 07:21:45
Document Index: 402162620

Matched Legal Cases: ['§ 425', '§ 77', '§ 77', '§ 77', '§ 77', '§ 10', '§ 180', '§ 180', '§ 2', '§ 3', '§ 4', '§ 270', '§ 2', '§ 270']

347 U.S. 590 - Braniff Airways v. Nebraska State Board of Equalization and Assessment
NEBRASKA STATE BOARD OF EQUALIZATION AND ASSESSMENT et al.
The argument upon which appellant depends ultimately, however, is that its aircraft never 'attained a taxable situs within Nebraska' from which it argues that the Nebraska tax imposes a burden on interstate commerce. In relying upon the Commerce Clause on this issue and in not specifically claiming protection under the Due Process Clause of the Fourteenth Amendment, appellant names the wrong constitutional clause to support its position. While the question of whether a commodity en route to market is sufficiently settled in a state for purpose of subjection to a property tax has been determined by this Court as a Commerce Clause question,17 the bare question whether an instrumentality of commerce has tax situs in a state for the purpose of subjection to a property tax is one of due process.18 However, appellant timely raised and preserved its contention that its property was not taxable because such property had attained no taxable situs in Nebraska. Though inexplicit, we consider the due process issue within the clear intendment of such contention and hold such issue sufficiently presented. See People of State of New York ex rel. Bryant v. Zimmerman, 278 U.S. 63, 67, 49 S.Ct. 61, 63, 73 L.Ed. 184, and cases cited; Wolfson and Kurland, Jurisdiction of the Supreme Court of the United States, 149 et seq.
Thus the situs issue devolves into the question of whether eighteen stops per day by appellant's aircraft is sufficient contact with Nebraska to sustain that state's power to levy an apportioned ad valorem tax on such aircraft. We think such regular contact is sufficient to establish Nebraska's power to tax even though the same aircraft do not land every day and even though none of the aircraft is continuously within the state. 'The basis of the jurisdiction is the habitual employment of the property within the state.'19 Appellant rents its ground facilities and pays for fuel it purchases in Nebraska. This leaves it in the position of other carriers such as rails, boats and motors that pay for the use of local facilities so as to have the opportunity to exploit the commerce, traffic, and trade that originates in or reaches Nebraska. Approximately one-tenth of appellant's revenue is produced by the pickup and discharge of Nebraska freight and passengers. Nebraska certainly affords protection during such stops and these regular landings are clearly a benefit to appellant.
Appellant urges that Northwest Airlines v. State of Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283, precludes this tax unless that case is to be overruled. In that case Minnesota, as the domicile of the air carrier and its 'home port,' was permitted to tax the entire value of the fleet ad valorem although it ranged by fixed routes through eight states.20 While no one view mustered a majority of this Court, it seems fair to say that without the position stated in the Conclusion and Judgment which announced the decision of this Court, the result would have been the reverse. That position was that it was not shown 'that a defined part of the domiciliary corpus has acquired a permanent location, i.e., a taxing situs, elsewhere.' 322 U.S. at page 295, 64 S.Ct. at page 952. That opinion recognized the 'doctrine of tax apportionment for instrumentalities engaged in interstate commerce', 322 U.S. at page 297, 64 S.Ct. at page 953, but held it inapplicable because no 'property (or a portion of fungible units) is permanently situated in a State other than the domiciliary State.' 322 U.S. at page 298, 64 S.Ct. at page 953. When Standard Oil Co. v. Peck, 342 U.S. 382, 384, 72 S.Ct. 309, 310, 96 L.Ed. 427, was here, the Court interpreted the Northwest Airlines case to permit states other than those of the corporate domicile to tax boats in interstate commerce on the apportionment basis in accordance with their use in the taxing state. We adhere to that interpretation.
One of the most treacherous tendencies in legal reasoning is the transfer of generalizations developed for one set of situations to seemingly analogous, yet essentially very different, situations. The doctrines evolved in adjusting rights as between the States to tax property bearing some relation to a number of States, and the taxing power of the States as against the freedom from State interferences secured by the Commerce Clause, bear, of course, a practical relation to what it is that is taxed. It took a considerable time to make this adjustment in regard to taxation of railroad property and railroad income—to decide when the States are wholly excluded from levying certain taxes, when an ad valorem tax may be levied on railroad property reasonably deemed to be permanently in a given State, and on what basis income from interstate railroad business may fairly be apportioned among different States. Even as to railroads, nice distinctions had to be made and the making of them has not been concluded.
The plain intimation of the case—that these novel problems, affecting the taxing power of the States and the Nation, call for the comprehensive powers of legislation possessed by Congress found response in a resolution of Congress directing the Civil Aeronautics Board to develop the 'means for eliminating and avoiding, as far as practicable, multiple taxation of persons engaged in air commerce * * * which has the effect of unduly burdening or unduly impeding the development of air commerce.' 58 Stat. 723, 49 U.S.C.A. § 425 note. The inquiry thus set afoot produced an illuminating report. See H.R.Doc.No.141, 79th Cong., 1st Sess., which analyzed the difficulties and also made concrete proposals.1 The gist of these proposals was that Congress makd an apportionment of taxes among the States over which air carriers fly, based upon relevant factors and in appropriate ratios. The basis of taxation by Nebraska, here under review, substantially reflects the factors which the Civil Aeronautics Board recommended to the Congress. It is one thing, however, for the individual States to determine what factors should be taken into account and how they should be weighted. It is quite another for Congress to devise, as the Civil Aeronautics Board recommended it should, a scheme of apportionment binding on all the States. Until that time, Nebraska may rely on one scheme of apportionment; other States on other schemes. And each State may, from time to time, modify the relevant factors.2
The exercise of the taxing power by one of the States by means of a formula, based on such criteria as tonnage, revenue, and arrivals and departures, may, in isolation, impose no unfair burden on commerce. And the adoption by all the States of such a basis for taxation, which only congressional action could ensure, would not offend the Commerce Clause. It is the diverse and fluctuating exercise of power by the various States, even where based on concededly relevant factors, which imposes an undue burden on interstate commerce.3
The complexity of the proposals of the Board's Report—the items to be taken into account, the balance to be struck among them, the problem of giving the States their due without unfairly burdening an industry of vital national import—indicates how ill-adapted the judicial process is, as against the choices open to Congress, for dealing with these problems and how warily this Court should move within the limits of its own inescapable duty to act. The protection of interstate commerce against the burden of multiple taxation ought not to be left to litigation growing out of changes in the methods of taxation.
But only those who have a sufficiently substantial relation to Nebraska that they may fairly be said to partake of the benefits, though impalpable and unspecific, it gives as an ordered society, may be taxed because they partake of those benefits. And even then, of course, an undue burden must not be cast on commerce. Not unless Nebraska can show that appellant has airplanes that have a substantially permanent presence in Nebraska can Nebraska exert its taxing power on their presence. I do not believe that planes which pause for a few moments can be made the basis for the exercise of such power.4 If Nebraska can tax without such a tie, every other State through which the planes fly or in which they alight for a few minutes can tax. Surely this is an obvious inroad upon the Commerce Clause and as such barred by the Constitution.
Neb.Rev.Stat.1943, § 77—1244 et seq.
Id., § 77—1244(3).
Id., § 77—1245.
Neb.Rev.Stat.1943, §§ 77—1247, 77—1249.
That space was defined in § 10 of the Air Commerce Act and freedom for its navigation declared. This was continued by the Civil Aeronautics Act, 49 U.S.C. § 180, 49 U.S.C.A. § 180, in 'airspace above the minimum safe altitudes of flight prescribed by the Civil Aeronautics Authority'.
§ 2. Sovereignty in Space.—Sovereignty in the space above the lands and waters of this State is declared to rest in the State, except where granted to and assumed by the United States pursuant to a constitutional grant from the people of this State.
§ 3. Ownership of Space.—The ownership of the space above the lands and waters of this State is declared to be vested in the several owners of the surface beneath, subject to the right of flight described in Section 4.
§ 4. Lawfulness of Flight.—Flight in aircraft over the lands and waters of this State is lawful, unless at such a low altitude as to interfere with the then existing use to which the land or water, or the space over the land or water, is put by the owner, or unless so conducted as to be imminently dangerous to persons or property lawfully on the land or water beneath. The landing of an aircraft on the lands or waters of another, without his consent, is unlawful, except in the case of a forced landing. For damages caused by a forced landing, however, the owner or lessee of the aircraft or the aeronaut shall be liable, as provided in Section 5.'
See Conference Handbook, 1943, pp. 66—67. Efforts continue to draft an acceptable State Uniform Aeronautical Code. See Conference Handbook, 1948, p. 147.
See Pullman's Palace-Car Co. v. Commonwealth of Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613; Ford Motor Co. v. Beauchamp, 308 U.S. 331, 60 S.Ct. 273, 84 L.Ed. 304; Nashville, C. & St. L. Ry. Co. v. Browning, 310 U.S. 362, 60 S.Ct. 968, 84 L.Ed. 1254; Central Greyhound Lines of New York v. Mealey, 334 U.S. 653, 654, 662, 663, 68 S.Ct. 1260, 1261, 1265, 1266, 92 L.Ed. 1633; Ott v. Mississippi Valley Barge Line Co., 336 U.S. 169, 174, 69 S.Ct. 432, 434, 93 L.Ed. 585; Canton R. Co. v. Rogan, 340 U.S. 511, 514—516, 71 S.Ct. 447, 448—449, 95 L.Ed. 488. Multiple Taxation of Air Commerce, H.R.Doc.No.141, 79th Cong., 1st Sess.; Arditto, State and Local Taxation of Scheduled Local Airlines, 16 Jour. of Air Law & Com. 162; Howard, State Taxation of Airplanes in Interstate Commerce, 10 Mo.L.Rev. 195; Welch, The Taxation of Air Carriers, 11 Law & Contemp.Prob. 584; Green, The War Against the States in Aviation, 31 Va.L.Rev. 835; Sutherland and Vinciguerra, The Octroi and the Airplane, 32 Cornell L.Q. 161; Saxe, Federal Control of State Taxation of Airlines, 31 Cornell L.Q. 228; Ternes, Aviation Taxation, 25 Mich. S.B.J. 23; Note, 57 Harv.L.Rev. 1097.
A collection of this Court's decisions dealing with power to tax may be found in an Appendix to Miller Bros. Co. v. State of Maryland, 347 U.S. 340, notes 8—20, 74 S.Ct. 535, 540—546.
Subsequent to the Northwest Airlines case, Minnesota enacted a tax statute incorporating an apportionment formula for allocation of the valuation of property of air carriers to Minnesota. Minn.Stat.1945, §§ 270.071—270.079, as amended, Minn.Laws 1953, c. 672, §§ 2—3, M.S.A. §§ 270.071—270.079.
The proposal of this Report—that there be a uniform allocation formula to apportion taxes among the States—was adopted by the Council of State Governments. See 20 State Government 95. However no federal legislation has yet resulted.