Legal Document

410 U.S. 356 93 Supreme Court Reporter 1001 35 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 351 Robert Judge LEHNHAUSEN, Petitioner,v.LAKE SHORE AUTO PARTS CO., et al. Edward BARRETT, County Clerk of Cook County, Illinois, al., Petitioners, versus Clemens K. SHAPIRO Nos. 71—685, 71—691. Argued Jan. 15, 1973. Decided Feb. 22, Rehearing Denied Mar. 26, See 411 910, 1523. Syllabus An Illinois constitutional provision subjecting corporations and similar entities, but not individuals, to ad valorem taxes on personalty comports with equal protection requirements, the being accorded wide latitude in making classifications drawing lines that their judgment produce reasonable taxation systems. Quaker City Cab company Pennsylvania, 277 389, 48 553, 72 L.Ed. 927, disapproved. Pp. 359—365. 49 Ill.2d 137, 273 North Eastern Reporter, 2nd 592, reversed. William Scott, Atty. Gen., for Lehnhausen. Aubrey Federal KF105 F3 Kaplan, Chicago, Ill., Barrett others. Arnold M. Flamm, Lake Shore Auto Parts Louis L. Biro, Shapiro, Mr. Justice DOUGLAS delivered opinion Court. 1 In 1970 people amended its constitution1 adding Article IX—A become effective January 1, 1971, S.H.A., reading: 2 'Notwithstanding any other this Constitution, personal property by valuation is prohibited as individuals.' 3 There apparently appeared ballot when was approved following: 4 'The amendment would abolish tax levied against individuals. It affect same entities considered law be The achieve result a new article Constitution 1870, IX—A, thus setting aside existing provisions IX, Section require all forms property, real or other, owned individuals corporations.' 5 Respondent Co., corporation, brought an action officials behalf 'non-individuals' subject tax, claiming violated Equal Protection Clause Fourteenth Amendment since it exempts from retains such 'non-individuals.' Circuit held Revenue Act unconstitutional respects reason Amendment. 6 Shapiro also suit alleging they are natural persons who own one himself his family, sole proprietor business, partnership. A different trial judge entered order these cases dismissing complaints except members class. imposing were unaffected line statement ballot, quoted above. 7 All respondents both appealed Court, which did only construed mean 'ad person two more joint tenants common.' 148, 597. As so construed, Id., at 151, N.E.2d, 599, dissenting.2 here writs certiorari we granted. 405 1039, 92 1307, 31 579. 8 does State may draw treat class differently test whether difference treatment invidious discrimination. Harper Virginia Board Elections, 383 663, 666, 86 1079, 1081, 16 169. Where concerned no specific federal right, apart protection, imperiled,3 have large leeway systems taxation. stated Allied Stores Ohio Bowers, 358 522, 526—527, 79 437, 440—441, 480: 9 very discretion laying taxes. When dealing proper domestic concerns, trenching upon prerogatives National Government violating guaranties attribute sovereign powers devising fiscal ensure revenue foster local interests. Of course, States, exercise taxing power, requirements But clause imposes iron rule equality, prohibiting flexibility variety appropriate schemes state impose trades professions vary rate excise various products. required resort close distinctions maintain precise, scientific uniformity reference composition, use value.' 10 case used phrase 'palpable arbitrary' 'invidious' defining limits placed power. 530, S.Ct., 442. collateral effect restricting even destroying occupation business been sustained, long regulatory power asserted properly within federal-state regime created Constitution. Magnano Hamilton, 292 40, 44—47, 54 601—602, 78 1109. comes great permissible far concerned. They classified respect right receive earn income. Lawrence Tax Comm'n, 286 276, 283, 52 556, 558, 76 1102, statute relieved income derived activities carried outside State, imposed obtaining We upheld claim Clause, saying: 11 'We cannot say investigation fields disclose basis legislation lead men conclude there just ground made. existence, unchallenged, differences between incomes every act adoption Sixteenth Amendment, demonstrates be.' 283—284, 558. 12 true gross receipts doing taxi partnerships operating taxicabs competition corporate taxpayers. Justices Holmes, Brandeis, Stone dissented. 403—412, 555 Holmes stated: 13 'If usually important degree done & N Dec. Immigration Nationality Decisions see why larger businesses taxed small ones disregarded, think immaterial if exceptions found general rule. . Furthermore desired discourage form activity expressed desire special nothing prevent it.' 403, 555. 14 Each dissenters thought Flint Tracy 220 107, 342, 55 should govern Cab. involved privilege capacity, laid partnership private individual. was, therefore, contended 'so unequal beyond Congress. 158, 351. had yet Fifth due process carries mandate protection.4 dictum 15 '(I)t could said, principles 14th applicable present case, substantial carrying taxed, conducted firm thing mere merchandise, actual transactions same, corporations, privileges exist conducting advantages inhere capacity those enjoyed firms These obvious, led formation companies nearly branches trade. continuity without interruption death dissolution, transfer interests disposition shares stock, controlled managed directors, absence individual liability, things conducted, do partnerships. distinctive taxation, buying selling handling goods, 161—162, 353. While came after Flint, following somewhat undermined it. White River Arkansas, 279 692, 457, 73 903, collection back lands sustained statute. Butler, Chief Taft, Van Devanter dissented, asserting distinguishable. majority made effort distinguish saying involve, River, 696, 459. 17 Rapid Transit New York, 303 573, 58 721, 82 1024, utility units. sustaining lack said: 18 'Since carriers utilities eminent domain, public franchises, contracts, many points distinction businesses, including relative freedom competition, especially significant increasing density population municipal expansion, service organizations valid virtue object separate related distinctions.' 579, 724. 19 reached Nashville, C. St. L.R. Browning, 310 362, 60 968, 84 1254, where Tennessee system assessments under most taxpayers totally corporations. So concerned, said grievance particular complainant 'common whole class' 'invidious taxpayer.'5 368, 971. 20 Approval 'with separateness' distinguishes others, ibid., leads us like liable transcend protection. 21 Madden Kentucky, 309 83, 406, 590, 50¢ per $100 deposits banks 10¢ $1,000 State. classification charge discrimination, noting 'in than fields, legislatures possess greatest classification.' 88, 408. presumption constitutionality can overcome 'only explicit demonstration hostile oppressive discrimination classes.' Ibid. And added, burden attacking legislative arrangement negative conceivable might support That idea has elaborated. Thus, Carmichael Southern Coal 301 495, 57 868, 81 1245, unemployment employers,6 22 'A legislature, enactment laws, widest possible nature record complete catalogue considerations move enact laws. courts assume capricious, that, informed acquaintance conditions applied, aware facts afford action. Only faithful adherence guiding principle judicial review preserve branch rightful independence ability function.' 510, 872. 23 tells discriminatory, unfair, almost impossible administer, economically unsound. Assessment practices varied district district. About third paid all, while rest bank accounts, automobiles, household furniture, resources, rural areas livestock, grain, farm implements well. says, uniformly enforceable. moreover IX first step eliminating 1979 reasons once. 24 strike down discriminatory substituted our dimly reflects vivid reaction pressing problems. Pennsylvania relic bygone era. follow stay narrow confines review, part tradition. 25 Reversed. 1969, Legislature provided submission proposed referendum vote. either reverse directions dismiss affirm dismissed complaints. Those heard along petition file original court Maynard, non-business three school districts. dismissed. Classic examples discriminated newspapers, struck First (Grosjean American Press 297 233, 56 444, 80 660) interstate commerce (see Michigan-Wisconsin Pipe Line Calvert, 347 157, 74 396, 98 583) licenses engage commerce. Bolling Sharpe, 497, 693, 884, decided May 17, 1954, (in racial nature) arbitrary violative term Atlantic Pacific Tea Grosjean, 412, 772, 1193, chain stores purposes store according numer inside bears equally fall into class, satisfies guaranty protection.' 424, 776. employers, excluding, inter alia, agriculture, service, crews vessels navigable waters, eleemosynary institutions. 'This repeatedly inequalities singling out exemption, infringe limitation.' 509, added: legislature bound member none. make having rational basis, subjected scrutiny must presumed Note 5, supar.

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