Court Opinion

ID: 9419632
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:50:32.158514+00
Date Added: 2024-06-11T16:42:10.434328
License: Public Domain

Mr. Justice Bl-ack,
dissenting.
In Brown v. Maryland, 12 Wheat. 419, 442, Marshall, C. J., pointedly rejected the argument that the rule announced in that case would permit an importer “to bring in goods ... for his own use, and thus retain much valuable property exempt from taxation.”1 Today, this Court, *687in holding that an Ohio manufacturer may escape payment of a non-discriminatory state ad valorem tax on goods imported from abroad and held for use in its factory, interprets Marshall’s opinion in a manner which squarely conflicts with his own interpretation of the rule he announced.
It has, from the very beginning, been recognized that “ . . .. there must be a point of time when the prohibition [to tax] ceases, and the power of the state to tax commences”; although the task of drawing this line is so difficult that no general rule “universal in its application” can be stated, yet that line nevertheless “. . . exists, and must be marked as the cases arise.” Brown v. Maryland, supra, 441. The Court did there draw an arbitrary line of demarcation marking the boundary of a state’s power to tax property “imported for sale.” It held that, as to property imported for sale, “while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the Constitution.” Brown v. Maryland, supra, at 442. The right to sell, it was there said, was an element of the right to import, and thus a state tax imposed before, or as a condition upon, the sale, would substantially impair the right of sale granted by the government to importers. The Court reinforced its conclusion by referring to its belief that a state tax on the importer would increase the cost to the ultimate domestic purchasers, and that the effect of this would be to enable the great seaport states indirectly to levy tribute upon consumers of imported articles living in the nonseaport states, a practice which the constitu-' tional clause here invoked was intended to prevent.2
*688While the rule announced in Brown v. Maryland has at times been severely criticized, see e. g. License Cases, 5 How. 504, opinion of Mr. Justice Daniel, 615-617, and has in some cases been narrowly restricted in its application,3 it has been, and still is, the general rule of decision in this Court, as regards imports for sale from foreign countries. But neither the rule nor the reasoning in Brovmv. Maryland, nor any of the cases which followed it, support the Court’s holding that one who imports an article for his own use or consumption can enjoy the full benefits of ownership, and simultaneously claim an immunity from state taxation on the ground that it is still an import. The Court, in Brown v. Maryland, was in reality treating goods in the hands of an importer for sale, as' though they were still in transit until the first sale had been made. This was in accord with the interpretation of the rule by Chief Justice Taney in the License Cases, supra, 575. He there said that while imported articles "are in the hands of the importer for sale . . . they may be regarded as merely in transitu, and on their way to the distant cities, villages and country for which they are, destined, and where they are expected to be used and consumed, and for the supply of which they were in truth, imported.”
But the fibers here were not in transitu in any possible sense of the phrase. Every conceivable relationship they had once borne to the process of importation had ended. They were at rest in the petitioner’s factory along with its other raw materials, having arrived at the point where they were “to be used and consumed” in current produc*689tion, and kept as a “backlog” to assure constant operation of the plant.
Brown v. Maryland and the cases which followed it stand for the rule that one who pays import duties on goods intended for sale thereby purchases the right to sell the goods, free from state taxation so long as the goods are held in the original package. Until today, none of this Court’s decisions have ever held or even intimated that one who imports goods for his own use purchases from the federal government, by payment of import duties, a right to hold them free from liability for state taxes, after they have reached the end of their import journey and are being held for use in the importer’s factory. Neither the “purchase-of-a-right-to-sell” argument nor any of the other reasons deemed relevant to support the “import-for-sale-original-package” doctrine call for its extension to goods imported for use.
It is clear under the doctrine of Brown v. Maryland, that after sale by an importer, imported goods are subject to state taxation. The opinion of the Court today, holding that goods held for use are immune from state taxation, results in this rather odd situation: One who ¿imports goods himself and holds them for his own use in his factory is not liable to state taxes on such goods; but if he bought the goods from one engaged in the business of importing, he would be liable to taxation on the same goods. The artificiality of this tax distinction suggests grave reasons to question the soundness of the Court’s interpretation of the rule. Furthermore, implicit in Marshall’s opinion is a recognition of the importance of protecting goods imported for sale from discrimination in the form of taxes. The net effect of today’s opinion is to accomplish just such discrimination, in favor of goods imported for use, and against goods imported, for sale.
Again, state taxation of previously imported goods held for use in manufacturing does not afford the great seaport *690states an opportunity to tax imports to the detriment of other states. This was one of the apprehended evils which the “import for sale” rule in Brown v. Maryland was fashioned to prevent. The most fertile imagination would be hard put to prove that it would injure or threaten any other state for Ohio to collect its non-discriminatory ad valorem tax on fibers held for use in that state. Certainly the Court advances no persuasive argument in this respect. On the contrary, it does appear that Ohio, as well as other states, will be injured by a constitutional interpretation which denies Ohio the right to collect the tax. Ohio is injured by the Court’s new rule because it cannot apportion its tax fairly upon all who carry on business under the protection of Ohio’s laws.
The rule announced by the Court also discriminates against other states. Their products held for use are subject to state taxation. Products from abroad are not. Wines offer an illustration. Wines, stocked in one’s private cellar, produced from California or New York grapes, and held for future use in the original package or otherwise, are subject to state taxation. Today’s rule renders a state wholly powerless to tax wines imported from abroad and held for future use side by side with taxable wines made in the United States. Thus, through constitutional interpretation, all foreign products are granted a tax subsidy at the expense of the individual states affected. If I thought the Constitution required such tax discriminations against American products, I should agree to the Court’s opinion. The whole history of events leading up to the Constitution, and this Court’s opinions in 'construing it, persuade me that no such consequence was ever contemplated by those who wrote or approved our Constitution.
A final word as to today’s new constitutional doctrine. Precisely how it is to be applied the Court does not tell *691us. Erom one part of the Court’s opinion it appears that the state can never tax these fibers at all, since it seems to be said the state can never tax until they “are subjected to the manufacture for which they were imported.” Another part of the opinion indicates they can be taxed when the original package is broken. Previous opinions of this Court have indicated the difficulties and defects of an original package doctrine.4 Are these fibers to be taxed when the “reed” which covers them is removed, or must the state wait until it can prove one of the steel bands has been broken? Other questions suggest themselves in regard to wine imported for use and stored in one’s private cellar for individual consumption. When, if at all, can a state tax it? Is it when the wine reaches the cellar or must the state withhold its taxing hand until the wine is “subjected to the [consumption] for which it was imported”? Or can the state tax each crate when the owner, or someone for him, removes the crate’s top with a crowbar? If the wine is imported in large casks, does it become taxable when the stopper is removed from the bunghole or only when a part or all of it has been consumed? The states are entitled to have a definite answer to these practical questions.
Me. Justice Douglas, Mr. Justice Murphy, and Mr. Justice Rutledge join in this opinion. Mr. Justice Douglas is of the view that, accepting the Court’s ruling that these products are “imports,” the rule should be applied without discrimination against the Philippines.

 Counsel for Maryland had argued that to permit state tax immunity in that case would result in granting immunity to “an importer who may bring in goods, as plate, for his own use, and thus retain much valuable property exempt from taxation.” In reply to this argument, Marshall rejected the assumption that the principles then announced would grant state tax exemptions to imports that had reached their ultimate destination and were being used or held for use by the importer. “The tax,” he said, “finds the article already incorporated with the mass of property by the act of the importer. He has used the *687privilege [L e., of sale] he had purchased, and has himself mixed them up with the common mass, and the law may treat them as it finds them. The same observations apply to plate, .or other furniture used by. the importer.” p. 443..

 To the same effect, see Woodruff v. Parham, 8 Wall. 123, 134-136.

 See e. g. May v. New Orleans, 178 U. S. 496; Burke v. Wells, 208 U. S. 14; Sonneborn Bros. v. Cureton, 262 U. S. 506; Gulf Fisheries Co. v. MacInerney, 276 U. S. 124; Baldwin v. Seelig, 294 U. S. 511, 526. See also Mexican Petroleum Corp. v. South Portland, 121 Maine 128, 115 A. 900, 26 A. L. R. 965, 971-980; Tres Ritos Ranch Co. v. Abbott, 44 N. Mex. 556, 105 P. 2d 1070.

 Note 3, supra.