Document: 340 U.S. 534 71 S.Ct. 377 95 L.Ed. 517 NORTON CO.v.DEPARTMENT OF REVENUE STATE ILLINOIS. No. 133. Argued Dec. 6, 1950. Decided Feb. 26, 1951. Order Conformed to May 21, See 99 N.E.2d 346. Mr. Joseph B. Brennan, Washington, D.C., for petitioner. William C. Wines, Chicago, Ill., respondent. Justice JACKSON delivered the opinion of Court. 1 Petitioner, a Massachusetts corporation, manufactures and sells abrasive machines supplies. Under consent from State Illinois do business therein, it operates branch office warehouse in Chicago which makes local sales at retail. These admittedly subject an Occupation Tax 'upon persons engaged selling tangible personal property retail this State'. Ill.Rev.Stat.1949, c. 120, § 441. The base computation tax is gross receipts. 2 Not all petitioner's customers are over-the-counter, but has collected, under protest, on entire income company its inhabitants. statute specifically exempts 'business interstate commerce' as required by Constitution, question whether exceeded constitutional range taxing power derived income. 3 In Worcester, Massachusetts, petitioner some 225,000 items, 18,000 usually carries stock. There general management, accounting, credit offices, where accepts or rejects direct mail orders forwarded office. If order calls specially built machines, there studied accepted rejected. Orders filled shipment f.o.b. Worcester either directly customer via 4 place performs several functions. It inventory about 3,000 most frequently purchased items. From these serves cash those whose home approved, consummating sales. Income admits be constitutionally taxable. But also useful functions other classes customers. For no established credit, who items not stock, want special equipment, receives their forwards action there. many acts intermediary reduce freight charges. packages marks each customer's goods accumulates them until carload lot can consigned breaks reconsigns separate original package thus intervenes between vendor vendees service helpful competition that trade except when buyer shipped buyer. 5 Supreme Court recognized was dealing with commerce. reiterated former holdings 'that could solicitation only' State.1 solicitors work territory out branch, although will supply engineering technical advice. court held presence outlet, circumstances case, sufficient attribute outlet render 6 Where corporation chooses stay respects send abroad advertising drummers solicit sent acceptance, filling, delivery back buyer, obvious grip seller. Unless incident occurs bring transaction within power, McLeod v. J. E. Dilworth Co., 322 327, 64 1023, 88 1304. Of course, state imposing use more easily meet burden, because impact taxes one user. Cases involving controlling here, falls vendor.2 7 when, gone into permission submitted itself State, avoid taxation only showing particular transactions dissociated nature. rule, applicable taxpayer claiming immunity burden establishing his exemption.3 8 This never met merely fair difference matter might decided differently. submitting Illinois, likewise judicial construe apply insofar keeps bounds. cases, we have examine whole record arrive independent judgment rights been invaded, does mean re-examine, first instance, findings fact supported substantial evidence.4 9 so mingled taxable contends requires administrative two. We conclude that, light evidence, attributing utilized receiving distributing realm permissible judgment. Petitioner such services were rendered decisive factors holding market. On record, source relationship shown. 10 approached market through would entitled commerce set case. But, competitive point view, system disadvantages. may view seller remote inaccessible. He cannot reached process courts breach contract, if defective need replacement. elected localize advantages keep close trade, locally take others, costs consumers. Although concern not, engaging lose right immunity, Cooney Mountain States Telephone & Telegraph 294 384, 55 477, 79 934, channel gain advantage hold immunities business. 11 clearly character reasonably proceeds Worcester. think tax. 12 below vacated cause remanded further proceedings inconsistent herewith. ordered. 13 Judgment remanded. 14 REED, dissenting part. 15 REED concurs Court's permits sales, consummated acceptance office, directly, transhipment title passes Massachusetts. concedes brief above facts class I nothing else appearing, buyer's cost risk. 16 recognizes taxed. described 17 pull permit measure receipts slight relation strong. however, puts regulation hands Federal Government. far interpretation Constitution allow collect money, delegation Government over carried than state, should preserve levied unapportioned Central Greyhound Lines, Inc., Mealey, 334 653, 68 1260, 92 1633; Carter Weekes Stevedoring 330 422, 67 815, 91 993; Interstate Oil Pipe Line Co. Stone, dissent, 337 662, 676, 69 1264, 1271, 93 1613. 18 Our closest approach DuGrenier, McGoldrick Felt Tarrant Mfg. 309 70, 77, 60 404, 405, 84 584. Despite marked differences DuGrenier others considered Berwind-White Coal Mining 33, 388, 565, without analysis effect reliance upon 'possession' transferred New York transportation upheld language used meant say were, said, 'controlled' Berwind-White. 19 A few years later, 1304, writer opinion, Chief joined, made clear collected solicited another, purchaser's That later clarifying seems me true rule here. see difference, constitutionally, salesmen road. Such buyers free levied. So holds taxable, reversed. 20 CLARK, 21 believe respondent attributed company's activities. therefore agree shipments 22 As points out, 'by * (they) (are) exemption.' failed burden. shown Illinois; provides sole means event aggrieved; affords after sale, well replacement defective; stands ready receive complaints offer advice; multitudinous activities give operations. Surely conclusion, 'Petitioner market', applies equal validity 23 maintaining establishment magnitude, adopted label home-town merchant. After received manifold label, our sanction claim taxpaying time respect itinerant drummer. foregoing reasons stated, affirm entirety below. 24 BLACK DOUGLAS join opinion. 405 Ill. 314, 320, 90 737, 741. Cf. Nelson Montgomery Ward 312 373, 61 593, 85 897; Sears, Roebuck 359, 586, 888; 565; MeLeod supra. Compania General de Tabacos Filipinas Collector Internal Revenue, 279 306, 310, 49 304, 305, 73 704; People ex rel. Cohn Graves, 300 308, 316, 57 466, 469, 81 666. Merchant's National Bank Richmond, Va., City 256 635, 638, 41 619, 620, 65 1135; Carlson Washington Curtiss, 234 103, 106, 34 717, 718, 58 1237.

Category: 7