Document: 358 U.S. 434 79 S.Ct. 411 3 L.Ed.2d 450 RAILWAY EXPRESS AGENCY, Inc., Appellant,v.COMMONWEALTH OF VIRGINIA. No. 38. Argued Oct. 15, 1958. Decided Feb. 24, 1959. Mr. Thomas B. Gay, Richmond, Va., for appellant. Frederick T. Gray, appellee. Justice CLARK delivered the opinion of Court. 1 Once again effort Commonwealth Virginia to levy a tax against express agencies is before us decision. Nearly five years ago this Court struck down as 'privilege tax' violative Commerce Clause Federal Constitution its statute under which was laid an assessment on appellant's doing business' in Virginia.1 Railway Express Agency v. Virginia, 1954, 347 359, 74 558, 98 L.Ed. 757. Subsequently General Assembly enacted Act here involved levying 'franchise companies, measured by gross receipts from operations within lieu all other property taxes intangibles and rolling stock. In due course appellant made thereunder 1956. Both State Corporation Commission, has jurisdiction such levies Commonwealth's highest court have upheld validity new law well thereunder, 199 Va. 589, 100 S.E.2d 785. Appellant levels dual attack, first being that like former one violates Clause; or, secondly, any event it calculated manner deprive without process violation Fourteenth Amendment. On appeal we noted probable jurisdiction, 1958, 356 929, 78 772, 2 760. We believe eliminated objections sustained law. While can legally assess should be their just equivalent amount, Postal Telegraph Cable Co. Adams, 1895, 155 688, 696, 15 268, 269, 39 311, will not inquire into exactitudes formula where shown so baseless violate process. Nashville, C. & St. L.R. Browning, 1940, 310 362, 60 968, 84 1254. The failure furnish, return, certain necessary information showing allocated called requested Commonwealth, left correct amount unobtainable latter except some method approximation places burden come forward with affirmative evidence extraterritorial assessment. Background Activity Virginia. Since appeal, supra, at pages 360—361, 559—560, relates factual details concerning sufficient say Delaware corporation, owned 68 railroads United States. It engaged both interstate intrastate business throughout Nation, save constitutional provision bars foreign corporations possessing or exercising powers functions public service corporations. There operates wholly subsidiary, carries Commonwealth. Appellant's thus exclusively nature. Through exclusive contract arrangements 177 Nation sole operator facilities lines, including pays therefor net income, achieving stated purposes agreement—that '* * shall no taxable income.' turn, subsidiary income over privilege contracts owns return filed $120,110.70 cash deposit; automotive equipment trucks $262,719.63; real estate value $32,850; office listed $42,884.83. Virginia's Taxing System. 4 comprehensive structure covering corporations.2 empowers local governments ad valorem 'dead' tangible personal property, stock, located respective jurisdictions. This leaves free state money intangibles, 'live' 'goint-concern' are concerned only levied franchises companies. provides3 pertinent part 5 '(e)ach company pay franchise upon intangible stock.' 6 'the derived within' deemed 7 'to beginning ending transportation transported through, into, out State.' 8 Commission directed, after notice, basis report case file report, base 'upon best most reliable procure.' 9 Issues Under Statute. 10 First, let clear away dead underbrush old denominated license Virginia'; nor 'in addition appellant, condition precedent engaging commerce crystal-clear now measure receipts, fairly apportioned, and, those 'derived 11 concedes does prohibit States concern business. agrees stock privileges railroads. readily admits agreements 'valuable rights' contribute principal element 'going value' Subsuming valid might argues, however, incidence carry rather than property. Our question whether practical operation privilege. 12 issue entangled file, data Virginia.4 Failing do used effect ascribed proportion mileage carriers bore total national same lines.5 contends resulting confiscatory. 13 event, lieu' provisions law, applied it, invalid. Admitting had cash, were subject but suffered none because assessed greatly excess thereof 14 Validity Law Clause. As pointed out, 'other property' (Emphasis added.) room doubt intended intangibles. Moreover, supporting interpretation, Supreme Appeals construed concern' value. trinity agreement three agencies, though conclusive, great weight our determination natural reasonable statute. supra; Spector Motor Service O'Connor, 1951, 340 602, 71 508, 95 573; Cudahy Packing Minnesota, 1918, 246 450, 38 373, 62 827; 1912, 223 335, 346, 32 211, 215, 56 459. legislature may validation tax, otherwise unconstitutional, merely changing descriptive words. Lawrence Tax 1932, 286 276, 280, 52 556, 557, 76 1102; Galveston, H. San Antonio R. Texas, 1908, 210 217, 227, 28 638, 640, 1031. One must comprehend, difference between use magic words labels validating invalid disable levy. said sometimes done. page 364, 561; 607, 511; McLeod J. E. Dilworth Co., 1944, 322 327, 330, 64 1023, 1025, 88 1304. 16 buttresses argument reasoning cannot apportioned receipts. true measure, too late constitutionality. Illinois Cent. 309 157, 419, 670; Great Northern 1929, 278 503, 49 191, 73 477; Pullman Richardson, 1923, 261 43 366, 67 682; 459; Wisconsin M.R. Powers, 1903, 191 379, 24 107, 48 229. These decisions still good standing books. Even following language: 17 'Of course, held, common sense hold, physical asset fluctuate according produce. A live horse worth more one, object same, smooth-going automobile unassembled collection parts. carrying prosperous assets bankruptcy liquidation sale sheriff. No denies right State, when assessing fair give factors influence values. Adams Ohio Auditor,6 166 185, 604, 41 965. But done this.' 561. 18 feel that. 19 convinced 'boot strap' enjoys paid them. accurate rely admission 'No would fact valuable rights.' concession, taken light expressed purpose payment solely make 'that Company income,' exposes frivolous nature contention. blinded realities permit manipulation finances railroads' frustrate collect tax. 20 Nor there substance contention since could business, therefore 'good will' built up thereby. need cite cases holding contrary: Ohio, 165 194, 305, 683 (rehearing 1897, 965); Western Union Taggart, 1896, 163 1, 1054, 49; Cleveland, C., Backus, 1894, 154 439, 1122, 1041. 21 Due Process 22 view failed required placing almost insurmountable ascertain them, palpably unreasonable do. rests facts figures actual comparative statistics based assets. points during year ($475,065) 0.6% ($79,700,426), while 1.7% ($6,499,519) ($387,241,764). 23 two percentages, contends, represent values operate outside jurisdiction. syllogism take account life. Tangible produce much elsewhere. Death Valley Scotty generated less his desert sightseeing wagon did counterpart Central Park. utter fallacy using test going-concern demonstrated depend entirely elects retain title place name company. By them thus, formula, escape nothing record even indicate own actually generate attributed Commission. connection, note 1.9% there. taxpayers attempted show through evidence, not, given apportionment effected appropriation entitled, "clear cogent evidence' results taxed.' Butler Bros. McColgan, 1942, 315 501, 507, 701, 704, 86 991; Norfolk North Carolina, 1936, 297 682, 625, 628, 80 977; cf. Bass, Ratcliff Gretton Ltd., Comm'n, 1924, 266 271, 282—284, 45 82, 84—85, 69 282. 365—366, 970—971, 1254: 25 'In basing mileage, Tennessee adopted familiar frequently sanctioned formula. Pullman's Palace-Car Pennsylvania, 141 18, 876, 35 613; Maine Grand Trunk Ry. 142 121, 163, 994; Pittsburgh, L. 421, 1114, 1031; Branson Bush, 251 182, 40 113, 215. See Cooley Taxation, pp. 1660—1664. Its asserted inapplicability particular situation rested petitioner's revenue-producing capacity lines Tennessee. thought however weighty, insufficient displace relevance matter exactness concededly judgment important factor, guard lest unwittingly officials' own. Certainly combined Board, courts baseless.' 26 final question, $139,739.66, 'no equivalent' which' levied, false premise quickly disposed of. states system segregation taxation power hand deposit which, rates, yielded $679.77. clearly error. read statutes, they below, (as contrasted local) government also rights privileges. Thus, previous hand, reaches Express, escaped altogether. 27 follows what valid, below affirmed. Affirmed. 29 FRANKFURTER concurs result. 30 HARLAN, concurring. 31 I share reservations BRENNAN propriety considering described find myself unable, distinguish similar been enterprises line cited Court's opinion, join opinion. BRENNAN, 33 Court, admit bar discussion case's predecessor, Agency, 364—367, 561—563, 337, cast serious viewing doubt. modification mathematical demonstration prior decision necessitated revision brought about statute's effect, means $139,739.66 1/5% amounting $240.22; $427.56, value, refrigerator cars; 1/2% trucks,* valued $262,719, $6,567.98. taxes, payable, aggregate $7,235.76. seems me doubtful makes significant alteration respect status rough sort conceivably see bears equivalence she sorts businesses previously Cf. 339, 368, 682. deny has, admitted characterization 'property taxes' situations somewhat tenuous. See, e.g., 670. 34 To me, realistic way evaluating substance, apportionable taxing State. scheme corporations, standard ordinary categories utility 'public service' single company, discriminate requires share, rate comparable rates lower many ones. restrict representing movements takes employed That face unfair discriminatory toward indicative imposition out-of-state activities, amply demonstrates maintain challenge application here. label 'privilege' 'license' proscribed eliminated, shows. sustain general Canton Rogan, 511, 515—516, 447, 449, 488; Greyhound Lines, New York Mealey, 334 653, 663—664, 1260, 1266—1267, 92 1633. Live Stock Bureau Revenue, 303 250, 256, 58 546, 549, 82 823. my view, compelling reason affirming principles these WHITTAKER, whom STEWART joins, dissenting. 36 agree. Let very briefly put perspective, it. Taxation properly observes 'Appellant's nature.' taxed statutes case. claims claimed present sought lay tax,' allocable 'exclusively' commerce. Admittedly bank 'rolling stock' doubtless, validly dispute following. involved, substantially percentage will,' carriage railroads, ratio uses everywhere claim respects unconstitutional. Which right? think reasons. observes, 'all income' Therefore, dollar distinguished anywhere. Second, if any, consist anything localized inheres business—a reach regulate, direct otherwise, prohibited Constitution, Art. I, § 8, cl. 3. My views fully dissenting 12, Northwestern Portland Cement 33, Williams Stockham Valves Fittings, 357. reverse Va.Code, 1950, 58—547. Va.Const. 170; Va.Code §§ 58—9, 58—10. 58—546 et seq., amended Va.Acts 1956, c. 612. 'unable' 'through, of' contains testimony officers. shows, exhibits, 1931 information. From 1953, managed compiling computing reporting data, disagree figures. downfall requirement 1954 1955. attempt reductions Commission's figures, explore possibility apparently years. Cohan Commissioner Internal Cir., 1930, F.2d 540, 543—544. Instead, relied completely Actually, amounts traffic ascertained method. carrier payments determined applying payments. Parenthetically, valuation $488,265 compared $28,438. 237, 315, 683. informs ruled shielded Code terms set forth provided railway freight car companies valorem. 58—515, 58—560. appear appropriate exploring corresponding rate, established section, cars.

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