Document: 486 U.S. 24 108 S.Ct. 1619 100 L.Ed.2d 21 D.H. HOLMES COMPANY, LTD., Appellant,v.Shirley McNAMARA, Secretary of Revenue and Taxation Louisiana. No. 87-267. Argued March 22, 1988. Decided May 16, Syllabus Appellant, a Louisiana corporation which operates 13 department stores realizing over $100 million in annual sales that State, contracted with several out-of-state companies to design, print, distribute merchandise catalogs. Appellant paid for the catalogs, were shipped free charge addressees; supplied contractors lists addressees, 82% whom residents; instructed postal authorities return undeliverable catalogs its New Orleans store; initiated distribution improve name recognition among residents. did not pay any taxes where designed or printed. The Department Taxation, appellee is Secretary, assessed on catalogs' value under statute imposing 3% use tax all tangible personal property used defining "use" as exercise right power such incident ownership, including distribution. When appellant refused tax, State filed won collection suit state court. Court Appeal affirmed, finding once landed mailboxes they left stream interstate commerce became part mass State; constituted subject taxation statute; that, four-pronged test determining validity articulated Complete Auto Transit, Inc. v. Brady, 430 274, 97 1076, 51 326, violate Commerce Clause Federal Constitution. Held: application Louisiana's appellant's does Clause. It largely irrelevant purposes whether "came rest" customers' still considered commerce, since recognized certain restrictions, may be required fair share taxes. Moreover, argument assessment against was essence mere presence goods within without merit, constitutes statute. Furthermore, satisfies each prong test. taxing scheme fairly apportioned, it provides credit other States, imposed only those distributed in-state, sent customers. structure likewise discriminate compensate revenue lost purchases equal same purchased in-state; fact, both are set forth statutory sections. also related state-provided services facilitate in-state sales, fire police protection transit public roads benefit Finally, activity had substantial nexus Louisiana, controlled approximately 400,000 residents, directly aimed at expanding enhancing business, has significant terms number volume. Cf. National Geographic Society California Bd. Equalization, 551, 1386, 631. Bellas Hess, Illinois, 386 753, 87 1389, 18 505, distinguished. Pp. 29-34. 505 So.2d 102 (La.App. 4th Cir.1987), affirmed. REHNQUIST, C.J., delivered opinion unanimous Court. Andrew Rinker, Jr., Orleans, La., appellant. Robert G. Pugh, Shreveport, appellee. Chief Justice REHNQUIST 1 corporation, challenges State's imposition printed direction outside prospective customers State. found this We affirm. 2 * D. H. Holmes Company, Ltd., principal place business registered office Orleans. owns various locations throughout employ about 5,000 workers. 500,000 card an estimated 1,000,000 3 In 1979-1981, York design printing York, but actually Atlanta, Boston, Oklahoma City. From these locations, mailed residents Louisiana; remainder Alabama, Mississippi, Florida, flagship store Canal Street addressee, their entire cost (about $2 3-year period), mailing, borne by Holmes. not, however, 4 Although selected customers, contained instructions carrier leave them current resident if addressee moved, Holmes' store. freely concedes purpose promote instill future buyers. included inserts could order products mail. 5 conducted audit returns 1979-1981 determined liable delinquent pursuant La.Rev.Stat.Ann. §§ 47:302 47:321 (West 1970 Supp.1988), margin.1 Together, 47:302(A)(2) 47:321(A)(2) impose "Use," defined elsewhere statute, includes consumption, distribution, storage. See 47:301(18) (19) Supp. 1988). when brought into calculated retail price would have imported. 6 it, Civil District collect tax.2 response complaint, answered owed no properly applied, position claimed reinforced § 47:305(5) 1970).3 contended violated 7 After 2-day bench trial, "intended increasing potential who Louisiana." 83-15523 (La.Civ.Dist.Ct., July 19, 1985), App. Juris. Statement 12A, 21A. court "[o]nce reach residences addressed, authority reaches resting catalogs," id., 22A, concluded statutes unconstitutionally burden commerce. then ordered $49,937.03, plus interest attorney's fees, amount parties stipulated due tax. 8 Appeal, Fourth Circuit, affirmed judgment trial (1987). reviewing catalog subjected "[d]istribution certainly 'use' tax." Id., 105. Turning federal question case, analyzed we 326 (1977), 9 Supreme denied discretionary review. 506 1224 noted probable jurisdiction, 28 U.S.C. 1257(2). 484 923, 283, 98 244 II 10 Constitution, Art. I, 8, cl. 3, Congress shall "[t]o regulate foreign Nations, Indian Tribes." Even acted affirmatively protect prevents States from discriminating "distinction between shelter people menaces health safety fraud, even dangers emanate lack retard, constrict flow economic advantage, one deeply rooted our history law." H.P. Hood & Sons Du Mond, 336 525, 533, 69 657, 662, 93 L.Ed. 865 (1949). 11 One frequent source conflict kind occurs seeks sale borders. See, e.g., Colonial Pipeline Co. Traigle, 421 100, 95 1538, 44 (1975); Memphis Natural Gas Stone, 335 80, 68 1475, 92 1832 (1948). This recurring dilemma exemplified what come leading case area, supra. Auto, Mississippi transportation motor vehicles manufactured Clause, because benefits provided 287, S.Ct., 1083. 12 four-part formulation been evaluate vis-a-vis contexts. Two Terms ago, instance, upheld Florida aviation fuel four criteria satisfied. Wardair Canada Dept. Revenue, 477 1, 106 2369, 91 (1986). employed constitutionality occupation taxes, Washington Association Stevedoring Cos., 435 734, 1388, 55 682 (1978); mineral severance Commonwealth Edison Montana, 453 609, 101 2946, 884 (1981); income received subsidiaries, Mobil Oil Corp. Commissioner Taxes Vermont, 445 425, 1223, 63 510 (1980). abandoned abstract notion "itself" cannot taxed States. Accordingly, present really makes little difference distinction some importance (in determining, "taxable moment" occurred, see So.2d, 105), analysis irrelevant. 14 argues is, essence, contention expressly rejected Appeal's 47:321. accept construction law, thus merit attempted existence 15 before us, then, complies prongs Auto. doubt second third elements 47:303(A) 1970) ("A Chapter granted taxpayers similar upon another state"); (instructing "there duplication tax"); Supp.1988) (same). printed; had, eligible exacted. Similarly, attempt portion went 16 purchase applicable sections statutes. Supp.1988). 17 requires condition met here. State: stores, runs maintains supplies civic profits. To sure, many others services; alter fact Holmes, increase advantages aid business. believe reflects begin with, lacked sufficient control verges nonsensical. list sent; returned it. admits 68-69, 98. There "nexus" aplenty 19 amici argue posture here closely resembles predicament mail-order confronted (1967). held Illinois consistently compel company seller's connection mail common carrier. apparently views analogous solicitation Hess. ignores, connections direct receives conducting similarity shipments Hess activities case. 20 find much closer Board 631 (1977). involved operation two offices national magazine devoted solely soliciting advertising magazine. nonetheless applied every retailer engaged purchasers, magazine's activities. "maintenance there adequately establish[ed] relationship 'nexus' [magazine] State" support 556, 1390. conclusion applies fortiori here, far exceeds Geographic. Because 22 Affirmed. "§ 47:302. Imposition "A. hereby levied retail, use, storage consumption state, item article property, herein, levy said follows: "(2) At rate per centum (2%) sold used, consumed, distributed, stored state; addition R.S. 47:302(A) collected provisions Subtitle Title 47 Revised Statutes 1950, additional . percent As originally Court, complaint claim candy reached acceptable compromise joint motion dismiss prejudice issue. That issue longer codified section provided: 47:305. Exclusions exemptions "(5) intention articles imported produced export; nor bona fide consumed after rest become state."

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