Court Opinion

ID: 6754775
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:26:04.18478+00
Date Added: 2024-06-11T16:02:23.048232
License: Public Domain

Leach, J.,
dissenting. I feel impelled to state briefly the essentials of my disagreement with the conclusions of the majority.
By its specific terms, the tax in question is purported to be “imposed on the privilege of engaging in the business of transporting persons or property by air in this state.”
The conclusion that United’s business of transporting . persons or. property by air in Ohio constitutes engaging in wholly inter-state business not . only is compelled by tbe record but is conceded by appellee. Thus, if the tax .is actually what it purports to be, it necessarily is a tax on tb°privilege of engaging in interstate commerce.
*114I believe it fundamental that a state may not lay a tax on the “privilege” of engaging in interstate commerce. This was acknowledged in the majority opinion of Mr. Justice Clark in General Motors Corporation v. Washington (1964), 377 U. S. 436 (the opinion relied upon by the majority as the principal basis for its conclusions herein), the opinion quoting with approval the statement of that court in Northwest States Portland Cement Co. v. Minnesota (1959), 358 U. S. at 458 that “ [I]t is beyond dispute that a state may not lay a tax on the ‘privilege’ of engaging in interstate commerce.”
The majority opinion adopts an interpretation of the General Motors case which I believe to be in error. As I read and understand the General Motors case, it holds only that a state is not precluded from imposing taxes “upon other activities or aspects” of an interstate business. Such had already been held in Spector Motors Service, Inc., v. O’Connor (1951), 340 U. S. 602, 609.
General Motors concerned itself with whether such “other activities or aspects” were present. The majority of the court therein concluded that they were present, stating:
“The tax that Washington levied is measured by the wholesale sales of the respective General Motors divisions in the State. It is unapportioned and, as we have pointed out, is, therefore, suspect. We must determine whether it is so closely related to the local activities of the corporation as to form ‘some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.’ Miller Bros. Co. v. Maryland, 347 U. S. 340, 344-345 (1954). On the basis of the facts found by the state court we are not prepared to say that its conclusion was constitutionally impermissible. Norton Co. v Department of Revenue, supra, 340 U. S. at 538. Here, just as in Norton, the corporation so mingled its taxable business with that which it claims nontaxable that we can only ‘conclude that, in the light of all the evidence, the judgment attributing ... [the corporation’s Washington sales to its local acti*115vity] was within the realm of permissible judgment. Petitioner has not established that such services as were rendered ... [through in-state activity] were not decisive factors in establishing and holding this market.’ Ibid. Although mere entry into a State does not take from a corporation the right to continue to do an interstate business with tax immunity, it does not follow that the corporation can channel its operations through such a maze of local connections as does General Motors, and take advantage of its gain on domesticity, and still maintain that same degree of immunity.”
In the instant case we are not concerned with an intermingling of “local activities” and interstate commerce. Instead we are concerned with a business, federally regulated and licensed, and which concededly is wholly interstate.
As was stated in Railway Express Agency, Inc., v. Virginia (1954), 347 U. S. 359, 364: “It is not an easy conclusion that the Legislature did not know the actual character of the tax it was laying or that it misconceived what it was taxing.” As applied to the facts of the instant case, I believe the following language in the 1954 Railway Express Agency case to be dispositive:
“We think we can only regard this tax as being in fact and effect just what the Legislature said it was—a privilege tax, and one which cannot be applied to an exclusively interstate business.”
As contrasted with General Motors, the Ohio airlines excise tax is directed toward businesses which are exclusively interstate. It is not, as was the tax in General Motors, of general application. I would therefore hold such tax to be unconstitutional.
Corrigan and Stern, JJ., concur in the foregoing dissenting opinion.