Document: 421 U.S. 100 95 S.Ct. 1538 44 L.Ed.2d 1 COLONIAL PIPELINE COMPANY, Appellant,v.Joseph N. TRAIGLE, Collector of Revenue. No. 73—1595. Argued Jan. 13, 1975. Decided April 28, Syllabus Louisiana's fairly apportioned and nondiscriminatory corporation franchise tax upon the 'incident' 'qualification to carry on or do business in this state actual doing within a corporate form' held not violate Commerce Clause as applied appellant, an interstate carrier liquefied petroleum products incorporated Delaware with its principal place Atlanta, Ga., which does no intrastate Louisiana but has employees there inspect maintain pipeline, pumping stations, related facilities that State. '(T)he decisive issue turns operating incidence tax,' General Motors Corp. v. Washington, 377 436, 441, 84 1564, 1568, 12 430 '(t)he simple controlling question is whether given anything for it can ask return,' Wisconsin J. C. Penney Co., 311 435, 444, 61 246, 250, 85 L.Ed. 267. Because foreign qualified on, carrying form, gained benefits protections from State value importance business, be required through pay just share. Memphis Gas Co. Stone, 335 80, 68 1475, 92 1832. Pp. 108-114. 289 So.2d 93, affirmed. R. Gordon Kean, Jr., Baton Rouge, La., appellant. Whit M. Cook, II, appellee, pro hac vice, by special leave Court. Mr. Justice BRENNAN delivered opinion We have once again case presents 'the perennial problem validity privilege state, certain activities' corporation's operation business. 85, 1477, 1832 (1948).1 The Louisiana, consistent Clause, Art. I, § 8, cl. 3, may impose Colonial Pipeline engaged exclusively form.' No raised reasonableness apportionment appellant's capital deemed been employed claimed discriminatory. Supreme Court sustained tax. 93 (1974). noted probable jurisdiction, 417 966, 94 3169, 41 1137 affirm. 2 * Appellant Ga. It common owns operates pipeline system extending Houston, Tex., New York City area. This 3,400-mile links oil refining complexes Texas population centers Southeast Northeast. daily delivers more than one million gallons 14 States District Columbia. Approximately 258 miles are located Louisiana. Over distance appellant several stations keep flowing at rate, various tank storage used inject withdraw into line. A work force 25 30 employees—mechanics, electricians, other workers—inspect line During years question, 1970 1971, maintained administrative offices personnel although had division office Rouge. 3 On May 9, 1962, voluntarily could carried without so. La.Rev.Stat.Ann. 12:302 H. (1969); see n. infra. Thereupon, Revenue imposed activities during 1962. At time 47:601, Franchise Tax Act, expressly provided: 'The levied herein due payable exercising charter continuance owning using any part all plant state.'2 (Emphasis supplied.) paid sued refund. Appeal, First Circuit, that, 601 was unconstitutional because, being directly (interstate) business,' violated 3. Mouton, La.App., 228 718 (1969). refused review. 255 La. 474, 231 393 (1970).3 4 Following decision, Legislature amended 47:601 Act 325 1970. amendment excised words: substituted: qualification form,' three 'alternative incidents' might imposed. two 'incidents'—the exercise State, employment capital, plant, property— were forward earlier version statute.4 See 2, supra. 5 then renewed his efforts 'in 1971. Again, concluded made substantive change 601, construed still imposing therefore 275 834 (1973). 6 reversed. court recognized pertinent Constitutional whether, whose exclusive interstate, statute violates United Constitution.' So.2d, 97. But attached significance omission 'primary incident (of former version), i.e., business," id., 96, substitution form. held: thrust (amended) done corporation, including 'each every act, power, right, immunity exercised enjoyed virtue powers privileges acquired nature such organizations . .." Id., Accordingly, corporations only general simply (as upon) enjoying capacity ownership use property continuing character form State.' 100. Upon premise, validated levy constitutional exaction furnished enterprises local, domestic corporations. reasoned: 7 enjoys under our laws many separate apart instance legal status sue Courts continuity interruption death dissolution, transfer interests disposition shares stock, advantages controlled managed directors, absence individual liability, among others. 8 fact inextricably interwoven view detract local taxed rather corporation. And real sufficiently distinguishable, so taxation thereof not, decisions Court, Clause. 9 discriminate between corporations, applicable, is, both. Nor we believe State's power taxing out proportion Colonial's their consequent enjoyment opportunities protection afforded them. 10 'Furthermore something return. return, case, requires recompense lawful Colonial, incidental possessed organization, here, maintaining, keeping repair, otherwise manning throughout Louisiana.' 100—101.5 11 course, bound court's determination challenged commerce. determine itself tax, highest 'a commerce." Steam Laundry 342 389, 392, 72 424, 426, 96 436 (1952). turn II. truism mere act commerce exempt taxation. 'It purpose clause relieve those share burden even though increases cost business.' Western Live Stock Bureau Revenue, 303 254, 58 546, 548, 82 823 (1938). particularly recent decades, nondiscriminatory, properly taxes when provided justified asking fair reasonable return.6 (1964); (1948). Cf. Spector Motor Service O'Connor, 340 602, 71 508, 573 (1951), Corp., supra, states test: 13 rests exacting constitutionally demand aspect bears relation. For purposes In words, exerted proper afforded. As said 249, 267 (1940), return." U.S., 440—441, S.Ct., 1568. Amended satisfies test. First, incidences localized alternative 601: (1) form; (2) State; (3) capacity. necessarily accept construction court. Second, found powers, privileges, bestows these sufficient support perceive basis say case. Our precedents require affirmance Court's judgment. 15 similar Mississippi company Mississippi. Natural owned operated natural gas Arkansas Mississippi, parts Tennessee. 135 compressing customer there. neither agent service process nor necessary maintenance pipeline. 16 ad valorem assessed against addition taxes, however, 'franchise excise tax' 'doing business' defined terms suggest model '(to) mean (to) include each to, organization.' 82, 1476.7 held, did 101, "an State." 84, 1477. affirming judgment court, Reed, plurality opinion, said: 17 'We think rights compensation affords borders. Of conducted activities. conclusive. These events flow States, gives entitled cannot unreasonable toll 1483. 18 conclusion compelled instant since law same 12:306(2) (Supp.1975).8 liability ..' obviously enhance Southern Alabama, 301 148, 153, 57 696, 698, 81 970 (1937); Stone Interstate 103 F.2d 544 (CA5), aff'd, 308 522, 60 292, 442 (1939). Railway Express Agency Virginia (Railway II), 358 434, 79 411, 450 (1959). III 19 Nevertheless, contends I), 347 359, 74 558, 98 337 (1954), argument merit. invalid Connecticut based 'upon (the corporation's) Similarly, I invalidated Virginia's 'annual license express companies 'for Thus both imposts contained fatal flaw led Appeal strike down before 'A (an unconstitutional) direct burden, if laid commerce.' Ozark Pipe Line Monier, 266 555, 569, 45 184, 187, 69 439 (1925), (Brandeis, J., dissenting). however repealed limiting application entitle exact recognized: provides answer. precluded aspects which, unlike subject sovereign 608—609, 512.9 20 less masking words cloaking thrust. 416; 363, 561; Galveston, & S.A.R. Texas, 210 217, 227, 28 638, 640, 52 1031 (1908). matter labels.' Spector, 608, 512. Here, purposefully remove narrowly confine impost Since thereby offend merely solely rather, means requiring government relies benefits. 21 Affirmed. 22 DOUGLAS took consideration decision 23 BLACKMUN, whom REHNQUIST joins, concurring 24 misgivings suggested STEWART dissent, join am satisfied past years, some them sharply divided votes, plain analytically would seem imply. Thus, find difficult reconcile today's holding. present gone way, If, consistent—and therre consistency what courts 1969 one—then, me, distinctions (under compulsion decisions) drawn too finespun far gossamer. They fail provide taxpayers lawyers who advise right expect, namely firm solid differentiation runs afoul makes little practical sense—to apportioned, adequate nexus conduct commerce, or, matter, partnership Tr. Oral Arg. 28—31. Certainly lay mind, mind purely legal, difference semantics. 26 feel should face make choice. choice favor Gas, buttressed philosophy holding Northwestern Cement Minnesota, 450, 357, (1959), Spector. seems derelict aberration, discard it. hold day, realities 'Our Federalism'* become apparent, ability Federal Government coexist matured, threaten discriminatory, unfairly devoid nexus, passes muster congressional proscription. record, meets standard. 27 STEWART, dissenting. All agree Yet says nonetheless because engaging (the) form.'* Under reasoning, like form'—or, proprietorship. For, whatever 'owning (a) Louisiana,' ante, 109, 'furnished' equivalent 'protection benefits' 114. 29 established precedents, impermissible. 573; Virginia, 337. understand today forthrightly overrule valid, long how embrace wholly specious reasoning 'This alone handed hundred full-dress opinions spread slightly number reports. (T)he 'not always clear reconcilable." 457—458, 362, Rev.Stat.Ann. 1963: 'Every charter, authorized compliance provisions law, except chapter, shall rate dollar 50/100 ($1.50) thousand dollars ($1,000.00), major fraction amount surplus, undivided profits, borrowed determined hereinafter provided; minimum ten ($10.00) state.' Refusal review tantamount affirmance. stated case: refusal grant writs while normally persuasive, weight precedent would, decided after granting writ. writs, adopt expressed appellate opinion.' Section (Supp.1975) part: 601. Imposition actually Chapter annual $1.50 $1,000.00, $10.00 per year following incidents: '(1) term privilege, organizations, well as, buying, selling procuring services property. '(2) state. '(3) section payment granted exist enjoyment, rights, immunities derived reason existence operation. hereby statute.' $80,835.02 interest 1971 $69,884.78 interest. amounts fixed applying allocated figure computed according allocation formula 47:606 follows: 'A. formula. 'For ascertaining Chapter, entire issued outstanding profits ratio obtained taking arithmetical average ratios: .. taxpayer's assets situated wherever used. .' liable specified reduced $10. full amount, 101. also pays parishes, income taxes. totaled $743,561.34 $196,621. free pursue own fiscal policies, unembarrassed Constitution, relation given, afforded, conferred orderly, civilized society.' (1940). Like statute, Code Ann. 9313 (1943), enjoy, existence.' qualify condition exempts transact 'any commerce' requirement obtain certificate authority Secretary they Crutcher Kentucky, 141 47, 851, 35 649 (1891), therefore, inapposite. There Kentucky first obtaining mandatory 'carry repeatedly void party take pretext it.' 57—58, 854. Graham Mfg. Rolland, 191 757, 186 So. (1939); American 159 1001, 106 (1924). An important consequence qualification, facilitation assessment collection Comment, Foreign Corporations—State Boundaries National Business, 59 Yale L.J. 737, 746 (1950). 'local obstruction stand Clause.' 395, 428, Unlike situation Laundry, 'carve out' 'incident integral economic commerce,' 393, proceed incident. assume indeed specifically requirement. Younger Harris, 401 37, 44, 91 746, 750, 669 (1971).

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