Legal Document

409 U.S. 275 93 Supreme Court Reporter 483 34 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 472 HEUBLEIN, INC., Appellant,v.SOUTH CAROLINA TAX COMMISSION. Number 71-879. Argued Nov. 13, 1972. Decided Dec. 18, Syllabus Incident to South Carolina's valid scheme of regulating the sale liquor within State, a requirement that manufacturer do more, as condition doing business, than merely solicit sales is not impermissible even though it has effect requiring out-of-state undertake activities eliminate its protection under 15 Code KF62 § 381(a) from state income tax. Pp. 278—284. 257 S.C. 17, 183 Eastern Reporter, 2nd 710, affirmed. Stephen M. Piga, New York City, for appellant. G. Lewis Argoe, Jr., North, S.C., appellee. Mr. Justice MARSHALL delivered opinion Court. 1 In this case we must determine whether Carolina may tax local Heublein's products, consistent with limitations on State's power imposed by 381(a).1 The Tax Commission assessed Heublein, Inc., Connecticut corporation produces alcoholic beverages, total $21,549.50 in taxes derived goods Carolina.2 After hearing before Commission, Heublein paid and brought suit recover them. Common Pleas held protected liability Carolina. reversed. 710. We noted probable jurisdiction, 405 952, 92 1175, 31 229 (1972), now affirm. hold exceed minimum standards established 381(a), may, pursuant an otherwise regulatory scheme, compel take beyond 381(a). 2 * During years question, Hueblein had one employee He maintained office his home desk at warehouse Ben Arnold Co., distributor products. representative briefed Arnold's salesmen traveled throughout State retailers, telling them products leaving promotional literature Ordinarily, retailers sent orders directly Arnold, but occasionally transmitted turn, placed Connecticut. then acknowledged acceptance indicated when would be shipped. They were common carrier consigned care premises Arnold. 3 This arrangement, which served none business interests, was adopted conform requirements Alcoholic Beverage Control Act. S.C.Code Ann. 4—1 et seq. (1962 Supp.1971). Under Act, only registered producers brands beverages ship those into State. §§ 4—134, 4 135. Such have resident who no direct or indirect interest business. 131(3), 4—139. Shipments made producer representative. 4—141. Prior shipment, mail copy invoice showing quantity price items shipped, bill lading, Commission. Immediately after accepting delivery, furnish time place delivery. Ibid. When received, shipment stored licensed producer, or, delivery complete, transferred wholesaler. 4—140, Before are shipped wholesaler, however, obtain Commission's permission make transfer. complied scheme. II Title 381(a)(1), relies, provides shall impose net interstate commerce if recipient confined 'the solicitation . such tangible personal property, outside approval rejection, and, approved, filled point State.' 5 need decide whether, urges, actions maintaining office, meeting distributing literature, personally delivering some fall term 'solicitation.' Compare Smith Kline & French versus Comm'n, 241 Or. 50, 403 Pacific 375 (1965), Clairol, Incorporated Kingsley, 109 N.J.Super. 22, 262 Atlantic 213, aff'd, 57 N.J. 199, 270 702 (1970), appeal dismissed, 402 902, 91 1377, 28 643 (1971). For here done more just acts. It transfer occurred clearly neither 'solicitation' nor filling 'by State' meaning 381(a)(1). 6 contends, never required conducting argues evade purpose firm taxing engaging compelled additional activity. 7 If persuaded evaded intent statute would, course, reluctant uphold actions. But what here. legislative history 381 shows Congress rather limited purposes regulation manner chosen. did focus consequences schemes. therefore will read prohibiting adopting schemes, requires contacts immunity. reading require us assume carefully considered difficult problems accommodating federal open national economy liquor. evidence clear so. 8 impetus behind enactment Court's Northwestern Portland Cement company Minnesota, 358 450, 79 357, 421 (1959). There 'net operations foreign subjected taxation provided levy discriminatory properly apportioned forming sufficient nexus support same.' U.S., 452, S.Ct., 359. promptly responded 'considerable concern uncertainty'3 'serious apprehension commercial community'4 generated decision enacting Public Law 86—272, 73 Statutes-at-Large 555, 381, seven months. 9 statute, attempted allay businessmen 'mere solicitation' subject taxation. arose because, sought relief viewed situation, adequately specify enough create 'sufficient nexus' exercise tax.5 Section designed define lower limit power. Clarity remove uncertainty Congress' primary goal. By establishing limit, did, implicitly below weaker promoting economy. address questions raised requirement, incident above State.6 10 recognized, instead, accommodation interests area delicate matter. committees reporting House Senate emphasized difficulty devising appropriate powers. Both Committees called their bills temporary solutions meet most pressing created Cement.7 More comprehensive legislation could follow careful study, Committees' view. agreed, Committee Judiciary Representatives Finance study entire problem commerce.8 11 Congress, then, undertook simply order comply important function governments our As said last Term, 'unless conveys clearly, deemed significantly changed Federal-State balance.' Bass, 404 336, 349, 515, 523, 30 488 12 course enact can deliberately mere solicitation. enacts serves legitimate other assuring firm's income, evading 381; pursuing permissible ends address. Thus, system valid, does prohibit sales.9 III 13 Act long detailed statute. Requirements certain records kept manufacturer, retailer pervade complete quantities, brands, prices involved every stage each sale. manufacturers localize sales, establishes check accuracy these records. example, wholesaler submits receives transfer, easier enforce wholesale higher elsewhere country. 4—137.1 (Supp.1971). localized is, unquestionably, reasonably related attempt provide basis seller's sales. 14 Nor violate Commerce Clause. Twenty-first Amendment, 2, '(t)he transportation importation any use therein intoxicating liquors, violation laws thereof, hereby prohibited.' Hostetter Idlewild Bon Voyage Liquor Corp., 377 324, 330, 84 1293, 1296, 350 (1964): 'This early following adoption Amendment virtue provisions totally unconfined traditional Clause restricts intoxicants destined use, distribution, consumption borders.' 16 that, Carolina, there, element liquor.10 question apply. judgment 17 Affirmed. 18 STEWART took part consideration case. 19 BLACKMUN, being sole authority extent, overrides proscribed concurs result. pertinent part: 'No person behalf either, both, following: '(1) person, representative, State; '(2) name benefit prospective customer enable fill resulting described paragraph (1).' A license tax, predicated upon taxes, also paid. 65—606 (1962). dispute over amount liable S.Rep. 658, 86th Cong., 1st Sess., U.S.Code Cong. Admin.News 1959, Page 2548. H.R.Rep. 936, 1. See, e.g., S.Rep.No. supra, n. 3, Pages 2—3: 'Persons engaged doubt regarded 'nexus,' connection, imposition 'properly apportioned' 2549. That untroubled suggested emphasis increased overhead recordkeeping minimal cause. id., 4; H.R.Rep.No. 4, 2: 'These businesses concerned costs taxation, inescapable fact compliance diverse jurisdiction produced maintenance retention legal counsel accountants familiar practice jurisdiction.' Where kept, about might rise substantially imposed. little keep 2; 4—5: 'Your committee recognizes reported permanent solution exists. intended be. Your complex extensive exhaustive arriving fair alike Nation. believes, serve effective stopgap while further studies problem.' 2551. report published 1480, 88th 565, 89th Sess. separate statement, suggests proscribe here, prohibits action Congress. view, extent undertaken unconstitutional. prefer history, ambiguous they be, avoid holding. Cf. Jin Fuey Moy, 394, 401, 36 659, 60 L.Ed. 1061 (1916). And, relation between force absence congressional been explored Court, squarely determined how affects Schwegmann Bros. Calvert Distillers 341 384, 71 745, 95 1035 (1951). upholding similar Carolina's, said: '(The State) seen fit permit manufacture whiskey sold class customers transported definitely specified ways. These conditions unreasonable effectuating policy limiting traffic minimize well known evils ..' Ziffrin, Reeves, 308 132, 139, 163, 167, 128 (1939). Duckworth Arkansas, 314 390, 62 311, 86 294 (1941); Carter Virginia, 321 131, 64 464, 88 605 (1944).

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