Court Opinion

ID: 8312114
Source: CourtListenerOpinion
Date Created: 2022-10-17 15:57:50.956306+00
Date Added: 2024-06-11T16:44:46.130608
License: Public Domain

HANEY, Circuit Judge
(dissenting).
The tax in question is imposed on “the privilege of using” in Washington, articles of personal property, and is a “use Tax.” The validity of such taxes is not .questioned except insofar as it may be said to conflict witli the Commerce Clause of the Federal Constitution.
I cannot agree that the tax here laid discriminates against commodities because of their origin in another state. The statute (chapter 180, § 31, Laws Wash.1935) levies the tax on the use of “any article of tangible personal property,” and makes no distinction between articles, either because of the place of their origin or place of purchase. It is applicable to articles originating or purchased within the state of Washington as well as to those originating or purchased elsewhere.
The following section (section 32 (c), exempts from taxation “the use of any article of tangible personal property the sale or use of which has already been subjected to a tax equal to or in excess of that imposed by this title whether under the laws of this state or of some other state of the United States.” Section 33 provides: “If any article of tangible personal property has already been subjected to a tax by this or any other state in respect to its sale or use in an amount less than the tax imposed by this title, the provisions of this title shall apply, but at a rate measured by the difference only between the rate herein fixed and the rate by which the previous tax upon the sale or use was computed.” The effect of these two latter sections together with section 31 is to tax the use of all personal property, the sale or use of which has not already been taxed by any state, including Washington, to the extent of 2 per cent, of its purchase price. I see no discrimination in such a tax. As pointed out by defendants the articles exempt under the Washington sales tax law (see section 19, ch. 180, Laws. 1935) even originating in Washington are subject to the use tax. See section 32 supra.
As to the universal applicability of the “use” tax, we might fairly consider the result had the Governor of Washington vetoed the sales tax (title 3, ch. 180, § 16 et seq., Laws of 1935). Under such circumstances it seems to me conclusive that the “use” tax provided for in section 31, supra, would have applied to the use of all *963tangible personal property, irrespective of its place of origin.
Plaintiffs make no contention that the tax, as applied to them, is a tax on an instrumentality of interstate commerce, hut coni end that the tax is imposed directly upon interstate commerce, because in effect the tax is one on the goods themselves.
I am unable to agree with that argument, because the tax is on the “use” of the articles, not on the articles themselves. If the tax was one on the “use” of the articles while in interstate commerce, it might then be invalid, but there is no pleading nor proof in this case which authorizes such a conclusion. In fact, under the pleadings, it is shown that the articles were in interstate commerce until they reached their destination, at which point the articles were intended to be used in constructing the dam. When that destination was reached, the character of the goods as “interstate commerce” ended. Bacon v. Illinois, 227 U.S. 504, 33 S.Ct. 299, 57 L.Ed. 615. By reason of the presumption that a statute is valid, we must presume that the tax attached to the use of the goods after their movement in interstate commerce had ended.
I therefore believe the bill should be dismissed.