Court Opinion

ID: 9419497
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:49:47.503776+00
Date Added: 2024-06-11T17:22:18.401760
License: Public Domain

Mr. Justice Roberts :
I think the judgment of the Supreme Court of Pennsylvania is right and should be affirmed for the reasons stated in its opinion.
If James v. Dravo Contracting Co., 302 U. S. 134, were not upon our books, or had been decided the other way, I should agree to the opinion of the court. In that case, at the insistence of the United States, this court held that a state gross receipts tax upon payments by the United States to a contractor for erecting structures on United *193States property was valid because the tax was not laid upon the contract, the Government, its property, its officers, or its instrumentality; was laid upon an independent contractor and was nondiscriminatory. Although admitting that the payment of the tax imposed a burden upon the activities of the United States because it inevitably increased the cost of exercise of its functions, the court nonetheless sustained the exaction. I then thought, as I still think, that the decision overruled a century of precedents in this court.
It was not long before the Government repented its generosity. Four years later, it insisted, in Alabama v. King & Boozer, 314 U. S. 1, that a state sales tax upon a purchase of building materials by a contractor who was to incorporate them into a Government project, and where, upon delivery, inspection, and acceptance, they became the property of the Government, was so direct a tax on the Government as to infringe its constitutional immunity. The court, however, followed to its logical conclusion the decision in Dravo and expressly overruled earlier decisions inconsistent with Dravo and King & Boozer-1 I concurred in that decision, feeling myself bound by the Dravo case.
In this case, as I think, the court necessarily reverts to the test of burdensomeness by a form of words and, as a result, again plunges the applicable principle into confusion.
The truth is that the tax liability of Mesta in respect of its manufacturing plant has been increased by the presence in the plant of machinery bailed to the taxpayer by the federal Government. It is true too that, either as a result of the express terms of the Government’s contract with Mesta, the Government’s monetary obligation to *194Mesta will be increased by the imposition of increased tax or, as in the Dravo case, if the contractor is liable for an increase of tax by reason of the fact that he is such contractor, the Government, in the long run, will have to' pay more for goods and services as a result of such increase.
In order to relieve the Government of this burden, the court is now obliged to say that the law of Pennsylvania is something different from what the Supreme Court of the Commonwealth has declared it, and that a century of State administrative and judicial construction is meaningless when the supposed necessity arises to unburden the Government from the result of state taxation upon privately owned property.
The law of Pennsylvania is, and always has been, that a tax imposed on real estate is enhanced in amount by buildings and machinery placed upon the land with the consent of the owner even though he does not own the' improvements but is a mere bailee. The lien of the tax extends only to the land owned by the taxpayer and the bailed improvements are neither under the lien nor subject to seizure or sale for payment of the tax. But this settled law is brushed aside and it is said, notwithstanding these facts, that, in some indefinable way, Pennsylvania has in truth levied an ad valorem tax upon property of the United States which is in the possession of Mesta as bailee. This is nothing in substance but to say, in the teeth of the Dravo and King & Boozer cases, that if a tax levied upon a contractor of the Government imposes a burden upon the Government’s activities it violates the constitutional immunity and must be stricken down. Whereas, in those cases, the court accepted the tax for what it was, viz., a tax upon the contractor and not upon the Government, here, although under state law-the liability to the State is that of the contractor and his property, and can, in no event, be the liability of the Government or its property, — except as the Government either *195contractually assumes the burden or bears it as an incident of the contractor’s burden, — the court announces that the tax is laid on the Government’s property.
I think the case was decided by the court below on a nonfederal ground. The decision is pitched solely upon the character and incidence of the real property tax of the Commonwealth. As that court, in the light of a hundred years of history, defined the tax and the tax lien neither was laid upon or collectable from the United States or its property. As a result of that decision Mesta became liable for an increased tax as a result of certain transactions with the Government. Unless the doctrine of immunity from consequent burden on the Government, as the other party to the contract, is to be reim-ported into our jurisprudence, the appeal should be dismissed because the decision below was based upon an adequate nonfederal ground.

 Panhandle Oil Co. v. Knox, 277 U. S. 218; Graves v. Texas Co., 298 U. S. 393.