Document: 417 U.S. 62 94 S.Ct. 2108 40 L.Ed.2d 660 Robert J. KOSYDAR, Tax Commissioner of Ohio, Petitioner,v.NATIONAL CASH REGISTER CO. No. 73—629. Argued March 19, 1974. Decided May 20, Syllabus Cash registers and other machines built to foreign buyers' specifications which were warehoused in Ohio awaiting shipment abroad, title, possession, control remaining respondent manufacturer, held not immune from state ad valorem tax, since the prospect eventual exportation, however certain, did start process exportation move into export stream, without immunity local taxation conferred by Import-Export Clause Constitution was available. Empresa Siderurgica v. County Merced, 337 154, 69 995, 93 L.Ed. 1276. Pp. 65—71. 35 St.2d 166, 298 N.E.2d 559, reversed. Dwight C. Pettay, Jr., Columbus, for petitioner. Roger F. Day, respondent. Mr. Justice STEWART delivered opinion Court. 1 The Constitution, Art. I, § 10, cl. 2, provides: 2 'No State shall, Consent Congress, law any Imposts or Duties on Imports Exports, except what may be absolutely necessary executing it's Inspection Laws; net Produce all Imports, laid shall Use Treasury United States; such Laws subject Revision Controul Congress.' 3 issue decision this case is whether assessment an personal property tax petitioner upon certain conflict with Clause. 4 * Respondent National Register Co. (NCR) has many years engaged manufacture cash registers, accounting machines, electronic data processing systems, it markets worldwide. Its home offices, main production plant, warehouse are located Dayton, Ohio. For marketing purposes, NCR organized two divisions, domestic international, each wholly separated other. It operations latter division that concerned. 5 maintains no inventory available meet incoming orders customers. Rather, when a salesman international receives order customer, individual form completed. machine then specification, taking account commercial peculiarities country shipped buyer's needs. 6 After manufacture, inspected, packed, crated abroad. taken await shipment.1 relevant storage Dayton warehouse, shipment, December 31, 1967, assessed them.2 7 appealed Commissioner's Board Appeals Department Taxation. basic claim 'international inventory' made up exports, thus under In support contention, offered evidence show that, because their unique construction special adaptation use, salable domestically. Further piece equipment ever gone anywhere but division; there recorded instance sold purchaser being returned; exported item found its way back States market.3 8 nonetheless upheld assessment. ruled even if irrevocably committed export, Act, attach until actually started journey destination. Since here had yet entered concluded they still tax. 9 Supreme Court reversed divided vote. 559. Relying about nonsalability court 'certainty export' case. Given 'certainty,' thought irrelevant purposes taxed not, date assessment, been moved facility Dayton. We granted certiorari, 414 1111, 840, 38 737, seemed present important questions touching accommodation federal interests Constitution. II 10 By own terms, prohibition contained absolute; duties imposts allowed 'except (a State's) inspection Laws.'4 Consequently, essential question cases involving narrow one: sought imposed 'export,' entitled protection provision's literal terms? 11 seminal Coe Errol, 116 517, 475, 29 715. involved spruce logs hewn at various locations Maine New Hampshire, floated down Androscoggin River sale Lewiston, Maine. detained low water town where selectmen number taxes them. owners contested assessments, claiming both Commerce Clauses, river served as 'public highway' interstate timber. Hampshire sustained affirmed. 12 Writing Court, BRADLEY viewed 'the precise solution' follows: 13 'Do owner's mind relation goods, is, his intent them, partial preparation do so, exempt them taxation?' Id., 525, S.Ct., 477. 14 That answered negative. Recognizing task set 'point time jurisdiction over commodities commerce begins ends,' id., 526, 478, 15 'such goods cease part general mass State, subject, such, jurisdiction, usual way, have shipped, common carrier transportation another continuous route journey.' 527, 478 (emphasis added). 16 begun 'final movement origin destination,' 477, provided taxation. 17 principle Errol simple one—the exemption 'attaches article before exportation.' Cornell Coyne, 192 418, 427, 24 383, 384, 48 504. This adhered almost 90 decided, problem constitutional against exports therefore decide sufficient commencement occurred so immunize Of necessity, inquiry usually factual one. example, A. G. Spalding & Bros. Edwards, 262 66, 43 485, 67 865, decided delivery baseballs bats Venezuela constituted significant 'step exportation,' 68, exempted revenue tax.5 Similarly, Richfield Oil Corp. Equalization, 329 69, 156, 91 80, oil tanks Zealand-bound steamer 'marked abroad.' 83, 163, making product California sales 18 Yet, like specifically directed determining particular acts toward final destination entrance stream invoke Clause, never lost sight one principle—at least some prerequisite Clause's operation. fact well illustrated cement Colombian buyer. Title passed buyer, dismantle plant crate Colombia. 19 At stage 12% out country, county Merced levied 88%. balance included 10% original dismantled prepared voyage 88%, including portion, violate Adhering test stated: 20 'Under enough plan contemplates integrated series events will end it. . articles marks exportation. Then certainty headed diverted use. Nothing less suffice.' 156—157, 997. 21 88% out-of-state journey, 'exports' within meaning Clause.6 22 can find little us take outside ambit holding. respondent's taxation, sitting shipment. possession NCR, payment putative purchasers, license issued, complete More important, simply goods—no setting, would require sharp departure nearly century precedents conclude 23 effort avoid clear holdings our prior cases, emphasizes peculiar nature contends non-adaptability use brought export.' Because practical absence 'diversion potential,' argues ultimate placement mere formality, should treat already having become sense sits warehouse. As matter, might doubted potential' portions greater than here.7 But, assuming, arguendo, validity NCR's arguments here, we think plain Frankfurter put matter susccinctly Joy Comm'n, 286, 288, 1075, 1077: 25 'The Export-Import meant confer exported, relieve eventually share cost services.' 26 accept assurances virtually certain. 'But prospect, how bright, does On shores neither nor committed.' Siderurgica, U.S., 157, immunities unavailable. 27 said insistence actual hand represents overly wooden mechanistic application doctrine. instance, however, believe simplicity virtues. recognized long ago easy rule moment obtain 'it highly shipper clearly defined ambiguity question.' Coe, 478. Holmes Spalding, 486: 28 '(W)e fix point which, view purpose must begin. elsewhere points very near side, necessity fixing definitely remembered determination seem arbitrary.' Our determined protections physical entry reason depart settled 30 these reasons, judgment 31 Judgment There often lag between delays occur reasons. recipient countries allow shipments, large placed cycle slow, consolidated stored area, component parts produced several different locations, necessitating consolidation instances, delay caused difficulties procuring importation licenses uncertainties monetary situation. Under Rev.Code Ann. 5709.01, used business 5711.16 provides manufactured A factors make impractical. thing, keyboards, printing mechanisms, characters, dispensing decimal geared system employed customer's country. Moreover, quite designed electrical systems prevalent And, mechanical problems exist, remains merchandising techniques considerably more sophisticated those nations, somewhat obsolete market. exception applicable arose 9, 5, Duty Articles State.' line recognized, 'export' same provision See, e.g., Brown Maryland, Wheat. 419, 445, 678; Turpin Burgess, 117 504, 506, 835, 836, 988; 427—428, 504; 80. rendered weeks after every preliminary 1366, gasoline Dearborn, Michigan, Canada, permissible previously purchased Canadian corporation, certified rail Detroit bills lading marked 'For Export Canada,' Dearborn tanks. bulk remained months, apparent shortage shipping space water. despite initial hiatus subjected Indeed, contended case: 'There export. record establishes three years. could cancelled, issue, financing fail materialize, destroyed, scrap. These shipment.' 175, 564—565 (O'Neill, C.J., dissenting).

Category: 7