Document: 505 U.S. 214 112 S.Ct. 2447 120 L.Ed.2d 174 WISCONSIN DEPARTMENT OF REVENUE, Petitioner,v.WILLIAM WRIGLEY, JR., CO. No. 91-119. Argued Jan. 22, 1992. Decided June 19, Syllabus During 1973-1978, respondent chewing gum manufacturer, which is based in Chicago, sold its products Wisconsin through a sales force consisting of regional manager and various "field" representatives, all whom engaged activities addition to requesting orders from customers. were sent Chicago for acceptance, filled by shipment common carrier outside the State. In 1980, petitioner Department Revenue concluded that respondent's in-state business during years question had been sufficient support imposition franchise tax. Respondent objected assessment tax, maintaining it was immune under 15 U.S.C. § 381(a), prohibits State taxing income corporation whose only within consist "solicitation orders" tangible goods, provided are approval goods delivered out-of-state. Ultimately, Supreme Court disallowed Held: Respondent's fell protection 381(a). Pp. 220-235. (a) any speech or conduct explicitly implicitly proposes sale, as used 381(a) covers those entirely ancillary requests purchases—those serve no independent function apart their connection soliciting orders. The statutory phrase should not be interpreted narrowly cover actual purchases actions absolutely essential making requests, but includes entire process associated with inviting an order. Thus, providing car stock free samples salesmen part orders," because reason do facilitate purchases. On other hand, broadly include routinely, even closely, solicitation customarily performed salesmen. Those company would have engage anyway chooses allocate covered. For example, employing repair service company's since there good get done whether has force. 223-231. (b) There de minimis exception forfeit 381 immunity. Whether particular activity sufficiently avoid loss immunity depends upon establishes nontrivial additional 231-232. (c) limited specified 381. Although manager's recruitment, training, evaluation employees intervention credit disputes, well use hotels homes sales-related meetings, must viewed purchases, representatives' practices replacing retailers' stale without cost, occasionally using "agency checks" sell retailers who agreed install new display racks, storing these purposes at home rented space cannot so viewed, constituted functions quite separate purpose engaging them employed Moreover, nonimmune activities, when considered together, minimis. While relative magnitude large compared operations, they 232-235. 160 Wis.2d 53, 465 N.W.2d 800, (1991) reversed remanded. SCALIA, J., opinion Court, WHITE, STEVENS, SOUTER, THOMAS, JJ., joined, Parts I II O'CONNOR, joined. filed concurring judgment. KENNEDY, dissenting opinion, REHNQUIST, C.J., BLACKMUN, F. Thomas Creeron, III, Madison, Wis., argued petitioner. E. Barrett Prettyman, Jr., Washington, D.C., respondent. Justice SCALIA Court. 1 Section 101(a) Public Law 86-272, 73 Stat. 555 (1959), 381, issue this case provision. 2 * William Wrigley, Co. world's largest manufacturer gum. Based sells nationwide marketing system divides country into districts, regions, territories. relevant period (1973-1978), Midwestern district included Milwaukee region, covering most parts States, subdivided several geographic 3 his residence office Illinois, visited six nine days each year, usually meeting call on particularly important account. region resided Wisconsin, Wrigley did provide him office. He general responsibility typically spend 80-95% time working representatives field contacting certain "key" accounts. remainder devoted administrative including writing reviewing reports, recruiting recommendations concerning hiring, firing, compensation evaluating performance. preside full-day strategy meetings once twice year. 1973 1976, John Kroyer, generally held "office" he maintained basement home, whereas successor, Gary Hecht, hotel motel. (Kroyer claimed tax deductions office, reimburse it, though filing cabinet.) Mr. Kroyer also intervened two three times year help arrange solution disputes between local Hecht testified never such although Wrigley's formal position description continued list one assigned duties "[r]epresent[ing] problems necessary." 4 own territory, Wisconsin. They cars, offices. furnished (with average wholesale value about $1000), supply promotional literature. These materials kept except salesman, apartment too small, storage $25 per month, reimbursed Wrigley. 5 typical day, representative load up racks cases gum, visit accounts territory. handing out samples, directly products, number asserts designed promote products. would, (perhaps given day), seek pre-existing ones, prominently located. retailer's existing sometimes happen—perhaps month—that retailer hand want wait until could ordered wholesaler. event, rack salesman's car. This retail $15 $20, charge. check" retailer, indicating quantity supplied; send copy wholesaler, ultimately billed (by wholesaler) proper amount. 6 When visiting account, check freshness, replace cost retailer. regular representative's duties, 40% possession removed stores. After accumulating amount product, either ship back dispose landfill. 7 lease real property operate manufacturing, warehouse facility, telephone listing bank All Credit collection similarly handled print, radio, television advertising purchase placement managed agency located Chicago. 8 returns paid taxes Wisconsin; indeed, licensed 1973-1978 issued percentage apportionable years. assessment, meaning therefore taxes. evidentiary hearing, Tax Appeals Commission unanimously upheld CCH Wis.Tax Rptr. ¶ 202-792 (1986). It later reaffirmed decision, commissioner dissenting, after County Circuit vacated original order procedural grounds. 202-926 (1987). then merits, 203-000 (1988), decision turn Appeals, judge dissenting. 153 559, 451 444 (1989). unanimous yet again, thus finally disallowing 800 (1991). We granted State's petition certiorari, 502 ----, 49, 116 27 9 Northwestern States Portland Cement v. Minnesota, 358 450, 454, 79 357, 360, 421 we Minnesota's properly apportioned net Iowa cement "activities Minnesota consisted systematic course sale being subject filling delivery plant [in Iowa]." salesmen, operating three-room Minneapolis employer, solicited dealers customers dealers. received complaints lost damaged shipment, forwarded further instructions. Id., 454-455, S.Ct., 360-361. contacts otherwise very limited; property, warehoused merchandise nonetheless rejected Commerce Clause due challenges tax: 10 "We conclude interstate operations foreign may subjected state taxation levy discriminatory forming nexus same." 452, 359. 11 handed down February 1959. Less than week later, motion dismiss (apparently mootness grounds) appeal Louisiana net-income out-of-state shipping. Brown-Forman Distillers Corp. Collector Revenue, 234 La. 651, 101 So.2d 70 (1958), dism'd, 359 28, 602, 625 (1959). That significant because, unlike Kentucky liquor (or own) estate state. Rather, 12 "the presence 'missionary men' Louisiana] who, occasion, accompany wholesalers assist obtaining suitable appellant's establishments said retailers. . ." La., 653-654, So.2d, 70. 13 Two months denied certiorari another upholding neither leased nor owned "consist[ed] product fifteen salesmen." International Shoe Fontenot, 236 279, 280, 107 640, 640 cert. denied, 984, 943, 933 14 our refusals disturb Court's decisions themselves legal significance, see Hopfmann Connolly, 471 459, 460-461, 105 2106, 2107, 85 469 (1985); United Carver, 260 482, 490, 43 181, 182, 67 L.Ed. 361 (1923), raised concerns broad language might read suggest sending "drummers" lawfully (properly apportioned) generated. Heublein, Inc. South Carolina Comm'n, 409 275, 93 483, 34 472 (1972), reviewed history noted community over uncertainty created driving behind enactment 381: " 'Persons commerce doubt will regarded connectio[n] "properly apportioned" State.' 487 (quoting S.Rep. 658, 86th Cong., 1st Sess., pp. 2-3 (1959)),1 U.S.Code Cong. & Admin.News 1959, 2548, 2549. 16 Within cases, Congress responded expressed enacting established what section heading referred "minimum standard" sales: 17 "No shall power impose, taxable ., derived person if behalf either, both, following: 18 "(1) person, 19 representative, personal rejection, and, approved, point State; 20 "(2) 21 name benefit prospective customer enable fill resulting described paragraph (1)." 555, 22 stated "designed define clearly lower limit" exercise power, "Congress' primary goal" "[c]larity remove [the] uncertainty" supra, 487, experience proved 381's somewhat less clear. sources confusion, others, questions: (1) scope crucial term orders"; (2) (beyond orders") forfeits address issues turn. A. 23 381(a)(1) confers "only activities" sales. "Solicitation," commonly understood, means "[a]sking" for, "enticing" to, something, Black's Dictionary 1393 (6th ed. 1990); Webster's Third New 2169 (1981) ("solicit" "to approach request plea (as selling begging)"). think evident statute includes, just explicit verbal orders, invites salesman extols virtues competitive brand "solicitation" does come right ask buy some. key whether, extent, propose sale. 24 seeking answer question, reject proposition put forward amici construe Heublein 'unless conveys clearly, deemed significantly changed Federal-State balance,' U.S., 281-282, 487-488 (citation omitted). principle—which applied suggested inference regulate manner cause immunity—has application present case. Because unquestionably limit companies task simply ascertain fair term. FMC Holliday, 498 52, 57, 111 403, 407, 356 (1990). 25 views some courts having adopted engages "any product." Brief Petitioner 21; id., n. (citing Hervey AMF Beaird, Inc., 250 Ark. 147, 464 S.W.2d 557 (1971); Clairol, Kingsley, 109 N.J.Super. 262 A.2d 213, aff'd, 57 N.J. 199, 270 702 (1970), 402 902, 91 1377, 28 643 (1971)).2 Arguably supporting interpretation subsection expands seller contractors, sales, maintenance more contractors solely ."3 plain implication indulgence exclusive conducting exempted basis taxation—i.e., embrace Of ought accorded consistent section, Sorenson Secretary Treasury, 475 851, 860, 106 1600, 1606-1607, 89 855 (1986), (c), either. One argue necessity special permission or, most, requests. 26 think, however, unreasonable reading text. uses sense merely ultimate act invitation, fact describes subcategory, acts, rather "business "—a naturally connotes courses conduct. See (defining "activity" "an occupation, pursuit, recreation active—often pl. <business activities>"). limiting reduce nullity. (It obviously impossible make accompanying action, placing phone customer's location.) And acts "essential" engender endless uncertainty, contrary whole statute. (Is car, take taxi, in-person solicitation? matter, solicit person?) seems us embraces request-related even, strictly speaking, essential, else salesmen's roads, spending night hotels, displaying product. hardly mind day-trips jurisdiction empty-handed drummers foot. Tobacco Commonwealth, 478 Pa. 125, 140, 386 471, ("Congress intended exempt walking solicitors"), 439 880, 99 217, 58 193 (1978). finally, extremely narrow leave virtually unchanged law existed before enactment. Both (where assisted displays whiskey stores) rooms shoes) decided before, taxation. At extreme, urges adopt court's Pennsylvania York, Wis.2d, 82, N.W.2d, 811-812 supra; Gillette 56 App.Div.2d 475, 393 N.Y.S.2d 186 (1977), 45 N.Y.2d 846, 410 65, 382 N.E.2d 764 (1978)). Indiana Dept. Kimberly-Clark Corp., 275 Ind. 378, 384, 416 1264, 1268 (1981). According treat "ordinary necessary 'business activities' process" "routinely deploying solicitation, long plant, inventory State." 9, 19-20; J. Hellerstein, Taxation 6.11[2], p. 245 (1983) ("solicitation normal incidents salesmen" "customary merchants"). "routinely-associated-with-solicitation" "customarily-performed-by-salesmen" approach, converts standard embracing ("solicitation") routinely conducted ("salesmen"). If, moreover, apparently intends) industry-by-industry basis, render limitations toothless, permitting whatever industry wants do.4 case, regard proposed accurate characterization opinion. court construed reach "closely associated" practice factor judging "close[ness]" challenged 811-812. problem standard, us, reformulates answers question. "What constitutes 'solicitation orders'?" becomes 'closely related' request?" fails identified goal 487. 29 proceed, therefore, describe be. Once acknowledged, be, next (and perhaps other) clear line orders—and force.5 Cf. National Tires, Lindley, 68 Ohio App.2d 71, 78-79, O.O.3d 69, 73-74, 426 793, 798 (1980) (company's went beyond "functions related on-going business"). Providing Contrariwise, Repair servicing increase purchases; converted See, e.g., Herff Jones 247 Or. 404, 412, 430 P.2d 998, 1001-1002 (1967) (no activities).6 30 As discussed earlier, text (the (c)) requires principle: Even exclusively State, behalf, go orders." generalized seemingly represents judgment manifestation "presence" that, absent specific exemption, always allowed. Jantzen, District Columbia, 395 29, 32 (D.C.1978); 6.4. 31 hold post-sale can covered "solicitation." decline so. Activities place ordinarily described, see, Miles Laboratories 274 395, 400, 546 1081, 1083 (1976) (replacing goods), prepared say invariably true. pre-sale/post-sale distinction hopelessly unworkable. disregards confusion exist takes place, cf. Uniform Commercial Code 2-401, 1A U.L.A. 675 (1989), manufacturers distributors ongoing relationships involve continuous often determine incidental preceded followed it. B necessarily performing rather, said, "[c]ourts analyze" 'deviations norm' "de activities." 811 bars recognition exception, situations where State" (emphasis added). ignores venerable maxim non curat lex ("the cares trifles") background principles against enactments adopted, (absent indication) accept. Republic Argentina Weltover, --- 2160, 2168, ---- (1992); Hudson McMillian, 503 995, 1000, 117 156 Ingraham Wright, 674, 97 1401, 1414, 51 711 (1977); Abbott Retail Druggists Assn., 425 1, 18, 96 1305, 1316, 47 537 (1976); Industrial Assn. San Francisco 268 64, 84, 408, 69 849 (1925). especially abandon principle construing operates stark, all-or-nothing fashion: A complete none all, activities. Wisconsin's renders liable hundreds thousands dollars 10¢ item in-state. Finally, wrong asserting "excise[s] word 'only' statute." 27. "only" places strict categories substantiality. Drackett Prods. Conrad, 370 723, 726 (N.D.1985); Kimberly Clark, Ind., 383-384, N.E.2d, 1268. 33 deviation prescribed must, course, determined reference standard. increase—beyond required Constitution—the subjecting itself Accordingly, conferred III least borders orders": replacement representatives; supplying checks"; materials; rental storage; employees; disputes.7 Since reasonably unless 35 checks," ancillary. first: wish attend spoiled serves qualify Laboratories, Or., P.2d, 1083. argues "promotional necessity" ensure 31, enough sales; not.8 36 provision presents complicated appears record occurred furnishing retailers, arguably form consumer solicitation. 381(a)(2) shields manufacturer's "missionary" indirect (such consumer) order, successful result order's "customer" i.e., wholesaler fills shipped Gillette, App.Div.2d, N.Y.S.2d, 191 ("Advice art public thoroughly ."). seem, setting gum-filled like immunized 381(a)(2). What destroys analysis, made pay thereby consumers. orders."9 vast majority stored swaps checks, storage) 37 By contrast, served role facilitating same instances contacted "rather nasty" involving "get account [Wrigley's] department communicating," App. 72. likely mediating central employee—some ombudsman, speak—if on-location staff exist. activity, words, ingratiate customer, 38 singly particular, emphasizes accounted 0.00007% annual absolute terms amounted hundred need decide isolation; taken not. exchanged matter policy, continuing worth thousand frequently pursued (but equally unprotected) checks." little difficulty concluding prohibition contained inapplicable. 39 40 reversed, remanded proceedings inconsistent 41 ordered. II, 42 join sections agree, function. ensuring available purchased. Making sure one's displayed offer available. checks THE CHIEF JUSTICE BLACKMUN join, 44 imposing conditions. face agree subset Ibid.; ante, 225-226. submit respect, though, allow analysis course. instead devises test excludes close relation advance correct, my view, polar arguments urged us: one, ordinary surrounding itself; other, Ante, 225, 227. Having so, exits promising avenue adopts practicalities rule yield results difficult justify explain. My submission polarities controlling lies between. formulate exempts reasonable buyers consider component value. 46 begin provides follows: political subdivision thereof, ending September 14, 48 49 50 phrases, recognized activities," suggests encompasses purchase; distinguished warehousing, distribution. written "acts" while unambiguous, accord practical realities solicitations, which, acted protect. 52 textual find draws historical context. legislative much trepidation acknowledge response decisions: (1959) (hereinafter S.Rep.); H.R.Rep. 936, 1-2 H.R.Rep.). 220-223 1. departed perceived well-settled rule, Norton Illinois 340 534, 71 377, 95 517 (1951), protected took place. 53 "Where stay respects abroad filling, buyer, obvious buyer grip seller. Unless incident occurs bring transaction vendor taxable." 537, 380. 54 Firm expectations built restated Norton. Companies conformed limits seemed endorsed. To sure, concerns. expense commitment informed support. Some carried unmistakable mark justification. technical requirement approved expertise (for depended give official retailer), rule. 55 settled upset vitality Shoe, Brown-Forman. Our disposition prior law, both offices Ibid. But broader holding marked departure law. absence giving "sufficient nexus," indeterminate concern apprehension community. S.Rep., 2-4; H.R.Rep., Apprehension increased denial Brown-Forman, salespeople. 3; 2. stemmed prospect liability increasing apportionment, burdens compliance, lack uniformity withdrawal small businesses complexity compliance great, extent 2-4. first drafted Senate Finance Committee, addressed 2-3; Cong.Rec. 16378, 16934 Committee recommended bill defining subsections, corresponding facts cases. S. 2524, Sess. Before enacted, third extended 16469-16477 (Senate debate amendment Sen. Talmadge (Ga.)). dealing state-court retained. 16367, 16376, 16471, 16934; No., 3. impetus explain final form. makes inform attempt 59 manufactured shoes St. Louis, Missouri. Its No inside Louisiana, accepted salespeople drove company-owned automobiles, buildings displays. 640; Hartman, "Solicitation" "Delivery" Under 86-272: An Uncharted Course, Vand.L.Rev. 353, (1976). 60 distilled packaged Louisville, Kentucky, elsewhere. assistance staff. kind. functions: wholesalers, direct Brown-Forman; accompanied wholesalers' visits wholesalers. them. arranging distiller's establishments. 61 entreaty; merchandising display, simple courtesy seller, calling customer. exceptional. Checking inventories, verifying buyer. Taxation: Corporate Income Franchise Taxes (1983). salesperson degree effectiveness constrained courtesy. Note, Interstate Commerce: Va.L.Rev. 297, 315 (1960). 62 substantial parallels manufacturing facility maintains warehouses there. owns Other intervening hiring salespeople, rooms, exceed 381(a); 234-235; 10-13. 63 apparent concession point, contend solicitation; relies undertaken 21. Department's submission, leading safe-harbor, following unworkable context many repeat 230-231; Pet. Cert. A-41. 64 indicates, really turns practices: racks. 233. If relied significant, routine deliveries fresh bread, seem involved. understanding 27-28, 41, 58, 117-118. contract perform service. indication method plausible believe insisted every prohibited doing did. 65 Acceptance objective inquiry. existence service, value, alter case's disposition, regardless seller's intentions. depend sellers' intentions motives whatsoever; vantage concede observes replaced charge, strong valuable customers, assurance quality 66 guidance faithful precise aspects techniques. responsible expect minimal importance strength national economy. repeal rules techniques forbid threat forfeiting exemption. protect mandate inefficiency. accepting majority's terms, finds safe harbor federal condemns. adjustment training sessions approves condemned are. understand why thinks dispute old transaction, weeks "ingratiate[s] purchases," 235, ingratiation occur spot refuses harm leaving bad shelf. two, approve condemn adjustment. anomaly test, responding observation ambiguity own. 229 5. different 233, here adds itself. with, advice presentation salesperson's cultivating dangers spends set stocks create perception receiving price. Free unit simplest policy charge displayed, here. ignore, do, minuscule (seven one-hundred thousandths percent) stocked fashion. 5; A-43. Indeed, testimony last resort, possessed inadequate await "Q Well, you stand stand, your vehicle transferred there; correct? "A No, that's correct. ever stands vehicle? 72 possibly some—on few occasions. how occasions tenure 1978? 74 Boy. guessing. Maybe dozen times. 75 would—what happened circumstance wound putting taking transferring retailer? 76 primarily wanted wholesaler; couldn't wait, yesterday something going week, didn't sitting around, 37-38. 77 circumstances here, fail stocking "ingratiate formulated involved rack, $15-20 worth, belies speculation, driven profit motive charging 38. 78 pursues laudable effort workable condemns bound possess accompanies swapping infrequent services perform; value; effect same. examination statute, enactment, demonstrates directed, drafted, misapprehended today. affirm ("While true grounds preceden[t] [States] cas[e] advanced sustaining decisions, successfully imposed apprehensions already generated among moderate size businesses"). Amici Jersey, et al. summary Clairol binds construction Though cited construction, recite affirmed below, adopting reasoning court. Anderson Celebrezze, 460 780, 784, 5, 103 1564, 1567-1568, 547 (1983); Fusari Steinberg, 419 379, 391-392, 533, 540-541, 521 (1975) (Burger, concurring). nonsales N.J.Super., 29-30, A.2d, 217. 136-137, 476-477, (1978); 479, 186, 189 381(c) reads entirety "For maintenance, [sic] property." dissent agrees rejection necessary" advocated Post, 236. proceeds, states "reasonable value." 237. "part itself" "independent service" Any intends elaboration repeatedly inquires "normal ac[t] buyer," post, 242 added); "common practic[e]," 244 "exceed[ed] solicitation," share market, "conduc[t] 246 Had spot; payments past-due accounts; outright thought itself"—it certainly value" him. Nothing confer agents industry. ancillarity judged, perspective 237 (test [the activities] itself") 243 ("The ") (question "possess explained earler, 4, inevitably whatever-the-industry-wants despite dissent's unequivocal disavowal test. judged asking "related besides amorphous, statute—e.g., funds—would ones closely "related" office—are remote. Contrary suggestion, 242, 246, differently principles. (renting room temporary sample products; assisting shops) downstream (consumer retailer) managers' caused residences "[in] economic reality," 32. resident commercially effective nonresident offices, establish "maintained office" "entirely ancillary" announced. 230. Nor occasional Kroyer's uncompensated dedication portion trigger formally attributed itself, capacity—as was, States. inter alia, "minimal," "significant." 243. disagree. not, suggests, "acts courtesy" scene "harm company." 244. deliberately chose level lot speculates, record, chosen profit, away "lower purchased," "could price." 245. choosing items irrelevant observing unlikely (per-unit-cost-distorting) did, shows, regularly (presumably per-unit-cost-distorting) temerity argument.

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