Source: https://m.openjurist.org/340/us/511/canton-co-v-rogan
Timestamp: 2020-04-05 23:59:11
Document Index: 649249478

Matched Legal Cases: ['§ 10', '§ 173', '§ 173', '§ 902', '§ 902', '§ 141', '§ 902', '§ 902', '§ 905', '§ 906', '§ 906', '§ 6', '§ 6']

340 US 511 Canton Co v. Rogan | OpenJurist
340 U.S. 511 - Canton Co v. Rogan
340 US 511 Canton Co v. Rogan
71 S.Ct. 447
95 L.Ed. 488
CANTON R. CO.
Argued Nov. 28, 29, 1950.
The State of Maryland imposes on steam railroad companies a franchise tax, measured by gross receipts, apportioned to the length of their lines within the State.1 Appellant Canton Railroad Company, a Maryland corporation, challenges the validity of the tax under the Import-Export Clause of the Constitution, Art. I, § 10, cl. 2, insofar as the gross income by which the taxes measured includes revenues derived from the handling of goods moving inforeign trade.
If this were a tax on the articles of import and export, we would have the kind of problem presented in Spalding & Bros. v. Edwards, 262 U.S. 66, 43 S.Ct. 485, 67 L.Ed. 865; Richfield Oil Corp. v. State Board, 329 U.S. 69, 67 S.Ct. 156, 91 L.Ed. 80; Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252; and Joy Oil Co. v. State Tax Comm., 337 U.S. 286, 69 S.Ct. 1075, 93 L.Ed. 1366. But the present tax is not on the articles of import and export; nor is it the equivalent of a direct tax on the articles, as was held to be true of stamp taxes on foreign bills of lading, Fairbank v. United States, 181 U.S. 283, 21 S.Ct. 648, 45 L.Ed. 862, stamp taxes on charter parties in foreign commerce, United States v. Hvoslef, 237 U.S. 1, 35 S.Ct. 459, 59 L.Ed. 813; and stamp taxes on policies insuring exports against maritime risks. Thames & Mersey Marine Ins. Co. v. United States, 237 U.S. 19, 35 S.Ct. 496, 59 L.Ed. 821. It is true that the latter cases indicate that the prohibition of the Import-Export Clause against taxes on imports and exports involves more than an exemption from taxes laid upon the goods themselves. Moreover, Crew Levick Co. v. Com. of Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295, following the reasoning of Brown v. Maryland, 12 Wheat. 419, 444—445, 6 L.Ed. 678, gave like immunity to the business of selling goods in foreign commerce when gross receipts were taxes. Cf. Anglo-Chilean Nitrate Sales Corp. v. Alabama, 288 U.S. 218, 53 S.Ct. 373, 77 L.Ed. 710. Though appellant is not engaged in the import-export business, it claims that its handling of goods, which are destined for export or which arrive as imports, is part of the process of exportation and importation. In support of the argument it refers to language in Spalding & Bros. v. Edwards, supra, and Richfield Oil Corp. v. State Board, supra, relative to when the export process starts; and it argues that, if the baseballs and the baseball bats in Spalding2 and the oil in Richfield were immune from the sales taxes because those commodities had been committed to exportation, the same immunity should be allowd here since the goods handled by appellant were similarly committed The difference is that in the present case the tax is not on the goods, but on the handling of them at the port. An article may be an export and immune from a tax long before or long after it reaches the port. But when the tax is on activities connected with the export or import the range of immunity cannot be so wide.
The objection to Maryland's tax on the ground that interstate commerce is involved is not well taken. It is settled that a nondiscriminatory gross receipts tax on an interstate enterprise may be sustained if fairly apportioned to the business done within the taxing state, see Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 255, 58 S.Ct. 546, 548, 82 L.Ed. 823, and not reaching any activities carried on beyond the borders of the state. Where transportation is concerned, an apportionment according to the mileage within the state3 is an approved method. Central Greyhound Lines of New York v. Mealey, 334 U.S. 653, 663, 68 S.Ct. 1260, 1266, 92 L.Ed. 1633.
If the roads to the ports may be obstructed with local regulation and taxes, inland producers may be made to pay tribute to the seaboard for the privilege of exportation, and the longer the road to port, the more localities that may lay burdens on the passing traffic. The evident policy of the Constitution is to avoid these burdens and maintain free and equal access to foreign ports for the inland areas. If the constitutional policy can be avoided by shifting the tax from the exported article itself to some incident such as carriage, unavoidable in the process of exportation, then the policy is a practical nullity. I think prohibition of a tax on exports and imports goes beyond exempting specific articles from direct ad valorem duties—it prohibits taxing exports and imports as a process.
Congress, the Interstate Commerce Commission, this Court, and American rail and motor carriers have all concurred in the development of rate structures on the premise that exports are to be recognized as such from the time they are delivered to the carrier for export and not merely when they reach the water's edge. There is a wealth of statutory material relating to the carriage of goods for export by railroads, motor carriers, and shipping companies.* Railroads have established lawful tariffs for export goods substantially less than for like goods destined for local markets. Texas & P.R. Co. v. I.C.C., 162 U.S. 197, 16 S.Ct. 666, 40 L.Ed. 940; Texas & P.R. Co. v. United States, 289 U.S. 627, 53 S.Ct. 768, 77 L.Ed. 1410. In the latter case, this Court recognized that export and import shipments, although not made on through bills, might lawfully be transported at rates below those charged for domestic traffic between the same points. 289 U.S. at page 636, 53 S.Ct. 771. The differential, I believe, is sometimes as much as fifty percent of the local tariff over the same route. Of course, if the export character of the goods is not to be recongized until they are ready to board or have boarded ship, this is a rank discrimination against local shippers quite without justification.
As demonstrative that Congress is vitally concerned about exports and imports, see 15 U.S.C. § 173, 15 U.S.C.A. § 173, respecting the annual report on statistics of commerce required of the Director of the Bureau of Foreign and Domestic Commerce, in which he must outline the 'kinds, quantities, and values' of all articles exported or imported, showing the exports to and imports from each foreign country and their values, the exports being required to be broken down into those manufactured in the United States and their value, and those manufactured in other countries and their value.
Also, although the Interstate Commerce Act does not apply to carriers engaged in foreign commerce insofar as their carriage beyond the limits of the United States is concerned, 49 U.S.C. § 902(i)(3), 49 U.S.C.A. § 902(i)(3); 49 C.F.R. § 141.67, their state-side activities have received considerable attention. Chapter 12, Part III of the Act, relating to water carriers, defines 'common carrier by water' as 'any person which holds itself out to the general public to engage in the transportation by water in interstate or foreign commerce of passengers or property * * *.' (Emphasis supplied.) 49 U.S.C. § 902(d), 49 U.S.C.A. § 902(d). Section 905(b) of the same Title states: 'It shall be the duty of common carriers by water to establish reasonable through routes * * * with common carriers by railroad * * * and just and reasonable rates * * * applicable thereto * * *. Common carriers by water may establish reasonable through routes and rates * * * with common carriers by motor vehicle. * * *' And § 905(c) provides that, 'It shall be unlawful for any common carrier by water to * * * give * * * any undue or unreasoanble preference or advantage to any particular person, port, * * * territory, or description of traffic * * *.'
Further congressional concern is evidenced in 49 U.S.C. § 906(a), 49 U.S.C.A. § 906(a): 'Every common carrier by water shall file with the Commission and print, and keep open to public inspection tariffs showing all rates, fares, charges, classifications, rules, regulations, and practices for the transportation in interstate or foreign commerce of passengers and property between places on its own route, and between such places and places on the route of any other such carrier or on the route of any common carrier by railroad or by motor vehicle, when a through route and joint rate shall have been established. * * *' See also 49 U.S.C. § 6, par. (12), 49 U.S.C.A. § 6(12), providing: 'If any common carrier subject to this chapter and chapters 8 and 12 of this title enters into arrangements with any water carrier operating from a port in the United States to a foreign country * * * for the handling of through business between interior points of the United States and such foreign country, the Commission may by order require such common carrier to enter into similar arrangements with any or all other lines of steamships operating from said port to the same foreign country.'