Legal Document

347 U.S. 359 74 Supreme Court Reporter 558 98 L.Ed. 757 RAILWAY EXPRESS AGENCY, Inc.v.COMMONWEALTH OF VIRGINIA. Number 163. Argued Jan. 5, 1954. Decided April Mr. Thomas baron Gay, Richmond, Va., for appellant. Frederick T. Gray, appellee. Opinion of the by Justice JACKSON, announced REED. 1 This appeal from Appeals Virginia presents another variation in seemingly endless problems raised efforts several states to tax commerce as it moves among them. 2 In 1920's railroads country took over express business theretofore separately handled. Their instrumentality was this appellant, a Delaware corporation, chartered interstate and intrastate operation throughout Union actually so operating every state except Virginia. It sought do general there, but that State has constitutional provision which forbids foreign corporation exercise any public service powers or functions therein.1 prohibition invoked Corporation Commission2 deny appellant authority business. exclusion sustained Virginia's highest court3 Court.4 3 As consequence State's own policy, does no power prohibit only such can conduct under protection Commerce Clause Federal Constitution. To handle falls within control, separate subsidiary necessarily organized. That local company annually been assessed paid type here controversy, based upon its total gross receipts. Those payments are not before us. 4 provides statute5 detailed system taxation companies. allocates taxation, free all levies, two kinds property, viz., intangible personal property money. sets off real estate tangible levies at same rates other similar properties. These, taxable different rates, included statute rubric 'Taxes on companies.' Then follows section headed 'Annual license tax' providing 'for privilege doing State' companies shall pay 'in addition * herein provided' an 'annual receipts earned 'on passing through, into out State.' 5 Appellant protested tax, some years protesting authorities appear have come together compromise formula, portion attributable Virginia, details need concern us, since affect issue now adequately raised, passed Commission duly brought 6 Since admittedly did grant contrary denied withhold, concedes nothing commerce, contends assessment is invalid contravention 7 The counters with contention we should regard this, even though labeled imposing it, but, instead, measured income laid value good-will going-concern status. said physical properties were dead bare-bones while 'live going value' being taxed services rendered it.'6 court approved. While great respect due these conclusions, long held case involving line between permissible full value, including prohibited 'neither courts nor legislatures, giving particular name use form words, take away our duty consider nature effect', Galveston, Haw. Hawai‘i Reports KFH45 A2 & S.A.R. versus Texas, 210 217, 227, 28 638, 640, 52 1031, inquiry 'we concerned practical operation'. Lawrence Tax Com., 286 276, 280, 556, 557, 76 1102. See Wisconsin Judge C. Penney Co., 311 435, 443—444, 61 246, 249—250, 85 267. 8 We start taxing statute, Legislature gave trinity characterizations tax. declared be 'property tax,' additional tax; named 'an annual tax', State'. easy conclusion know actual character laying misconceived what taxing. If purpose effect one intangible, reason apparent casting mold Indeed, finally said, opposite true, basis must found if saved valid. both below do. 9 court, earlier cases, considered earnings measure element company. 10 Of course, held, common sense hold, asset may fluctuate according made produce. A live horse worth more than one, object same, smoothgoing automobile unassembled collection parts. facilities used carrying prosperous assets bankruptcy liquidation sale sheriff. No denies right State, when assessing fair formula will give factors influence values. Adams Express Ohio Auditor, 166 185, 17 604, 41 965. But done this. 11 Instead, conforms statutory description whose impact squarely without consideration their classes recognized elsewhere statute. summary appellant's 1951 illustrate point.7 reported money deposit $109,906.38, $219.81 rate twenty cents per $100. drop item medium exchange deflate inflate owner's it. dollar much employees. had items doubt possessing well intrinsic value. These $129,279, taxes $3,389.65 probably varied averaging 2.6 centum. 12 Appellant's questioned amounted $66,454.71, gross-receipts fifty percent property. says really 13 Neither seen fit amount considers valuation. compute possible valuation base. goingconcern treated separable 'intangible property,' $100, $129,279 deemed $13,290,942. invested $100 purposes. overtax company, credulity, neither Commission, treating expressly entitled classification. 14 $66,454.71 gross-earnings 3/20 centum produce base $3,090,916.55, exactly revenues ascribe three million dollars $129.279 face extreme attribution. assume intake adds company's regardless how cost labor, interest expense, taxes, On hand, forthright receipts, involves irrational impractical assumption. 15 would sustain discrimination, jurisdiction include assessment, assess separately, added property's assemblage business, solely commerce. Cf. Meyer Wells Fargo 223 298, 32 218, 56 445; Baker Druesedow, 263 137, 44 40, 68 212; thus proportionate dispute depend owning thereof, levied way dispense local, fact revenue consistent volume yield revenue, just indicated. declined mere sound world where values profitableness merely volume. United States Glue Town Oak Creek, 247 321, 328—329, 38 499, 501, 62 1135. 16 Here excises receipt movement takes 'all validated intereste localized incident course incidents originating movement, requires pickup parcels; terminating delivery, through State. each sufficient warrant wholly nation-wide vulnerable forty-eight states. argued permissible, provided formulate burden proportionately, encroaching other's burden. enough say recently ruled gathering up putting down commodities integral part adequate grounds license, occupation Spector Motor Service, Incorporated O'Connor, 340 602, 71 508, 95 573; Memphis Steam Laundry Cleaner, Stone, 342 389, 72 424, 96 436; Michigan-Wisconsin Pipe Line Calvert, 157, 396; New Jersey Bell Telephone Board, 280 338, 50 111, 463. placed reliance dismissal appeals Baltimore Packet Commonwealth 343 923, 763, 1335, Norfolk, Carolina Line, 764, misled, assigned reasons cited authority. those almost identical 193 Va. 55, South Eastern Reporter, 2nd Series 137.8 vital distinction, far concerned, account appeals. One appellants derived exist Both engaged therefore subject For purposes, mattered whether companies' privileges they either basis. distinguishes dismissed cases bar supra. question fairness apportionment require Central Greyhound Lines Mealey, 334 653, 1260, 92 1633. mistake Court, appeals, approved holding imposes reality otherwise shaped. 18 think was—a cannot applied exclusively 19 judgment reversed cause remanded further proceeding inconsistent herewith. 20 Reversed remanded. 21 CLARK, whom THE CHIEF JUSTICE, BLACK DOUGLAS join, dissenting. 22 nondiscriminatory, fairly apportioned, excessive. conceded Whatever Court's mathematics prove, establish unfair respect. 1951, 610—615, 512—515, 573, N Dec. Immigration Nationality Decisions reasoned attributes properly against obviously could engage using state. uphold grounds. accepting approach Spector, instant 23 imposed "the state" (340 510) violates 'operating incidence' tax—"the state"—was determined Court. label formed nub rationale striking decision purport cover bearing name. fact, there specifically noted 'collected lieu ad valorem tax'; presumably upheld. Id., page 607, 511. 24 property; 'going concern' 'is character. *' 194 757, 760—761, 75 61, 63. Hence, accept determination little valid Spector. 25 however, refuses court's assigns 'privilege' condemned Although refused pierce reexamine affixed court. state's scheme; true—though it—that might deliberately misbrand avoid decisions justifies refusal case. given meshes scheme. And believe mislabeled perfectly expressions antedating dismissed, 1952, 1335; City Richmond Commonwealth, 1948, 188 600, 654. Moreover, existence aside unit's assets. Nor appellant; brief 'freely admits operated profit reasonable expectation earning future operations, sometimes called 'organization' value.' contend future, forced admit, majority substantial immunized reach current excessive unfair. 26 From 1942 until validity result immunity today's decision, others similarly situated receive windfall claim refunds extending back limitations permit. twist doctrine. makes invalid, accepted; validates label. rather hard creates obstacles them continuing effort make purely units share essential functioning enterprises. 27 sum, unconstitutional because legislature asserts discriminatory, words constitutionality laws ability legislatures foresee language most likely meet approval. Va.Const., Article XII, § Case 3900, Report (1929), Page 252. Railway Agency, ex rel. Comm., 153 498, 150 Southeastern KF135 S6 419. 282 440, 51 201, 450. Code, 1950, 58 547. immediately preceding read follows: 58—546. Taxes companies.—Each shall, first day October year, counties, cities towns wherein located, '(1) (other shares stock, bonds issued political subdivisions State) owned hundred thereof; '(2) '(3) There money; '(4) located localities, proceeds law. 'The provisions apply year nineteen forty-nine thereafter, unless 58—547. Annual tax.—Every registration fee provided, equal three-twentieths operations When partly party beginning ending State; clearly shown, last-mentioned entire mileage bears law.' Cases Nos. 10,629 10,767, (1952). quoting opinion 70, 147. figures discussed text summarized following chart 1951. Types Property Statutory Assessed Value Paid Taxed Rate 1. Intangible 50¢ Unknown ($13,290,942.00 ($66,454.71 disputed tax) tax). 2. Money ------ 20¢ $109,906.38 $219.81. 3. Real Local $129,279.00 $3,389.65. (average centum) 4. Gross $3,090,916.55 $66,454.71. commented manner: 'So, steamship danger adverse averted, comment, ground federal discussing involved.'

Classification Label: 7