Court Opinion

ID: 9421761
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:59:42.639695+00
Date Added: 2024-06-11T17:22:31.935346
License: Public Domain

Mr. Justice Brennan,
with whom Mr. Justice Harlan joins, concurring.
We hold today that Ohio’s ad valorem tax law does not violate the Equal Protection Clause in subjecting the property of Ohio corporations to a tax not applied to *531identical property of non-Ohio corporations. Yet in Wheeling Steel Corp. v. Glander, 337 U. S. 562,1 the Court struck down, as violating the Equal Protection Clause, another provision of Ohio’s ad valorem tax law which subjected the property of non-Ohio corporations to a tax not applied to identical property of Ohio corporations.2
The question presented in the two cases, if stated generally, and as I shall show, somewhat superficially, is: Measured by the demands of the Equal Protection Clause, is a State constitutionally permitted separately to classify domestic and foreign corporations for the purposes of payment of or exemption from an ad valorem tax? In both cases the distinction complained of as denying equal protection of the laws is that the incidence of the tax in fact turns on “the different residence of the owner.” With due respect to my Brethren’s view, I think that if this were all that the matter was, Wheeling and this case would be indistinguishable.3 Therefore, while I agree with my Brethren that the classification is valid in this case, I *532cannot reach that conclusion without developing the ground on which Wheeling is distinguishable.
Why is the “different residence of the owner” a constitutionally valid basis for Ohio’s freeing the property of the foreign corporation from the tax in this case and an invalid basis for its freeing the property of the domestic corporation from the tax involved in the Wheeling case?
I think that the answer lies in remembering that our Constitution is an instrument of federalism. The Constitution furnishes the structure for the operation of the States with respect to the National Government and with respect to each other. The maintenance of the principles of federalism is a foremost consideration in interpreting any of the pertinent constitutional provisions under which this Court examines state action. Because there are 49 States and much of the Nation’s commercial activity is carried on by enterprises having contacts with more States than one, a common and continuing problem of constitutional interpretation has been that-of adjusting the demands of individual States to regulate and tax these enterprises in light of the multistate nature of our federation. While the most ready examples of the Court’s function in this field are furnished by the innumerable cases in which the Court has examined state taxation and regulation under the Commerce and Due Process Clauses, still the Equal Protection Clause, among its other roles, operates to maintain this principle of federalism.
Viewing the Equal Protection Clause as an instrument of federalism, the distinction between Wheeling and this case seems to me to be apparent. My Brethren’s opinion today demonstrates that in dealing with as practical and complex a matter as taxation, the utmost latitude, under the Equal Protection Clause, must be afforded a State in defining categories of classification. But in the case of *533an ad valorem property tax, Wheeling teaches that a distinction which burdens the property of nonresidents but not like property of residents is outside the constitutional pale. But this is not because no rational ground can be conceived for a classification which discriminates against nonresidents solely because they are nonresidents: could not such a ground be found in the State’s benign and beneficent desire to favor its own residents, to increase their prosperity at the expense of outlanders, to protect them from, and give them an advantage over, “foreign” competition? These bases of legislative distinction are adopted in the national policies of too many countries, including from time to time our own, to say that, absolutely considered, they are arbitrary or irrational. The proper analysis, it seems to me, is that Wheeling applied the Equal Protection Clause to give effect to its role to protect our federalism by denying Ohio the power constitutionally to discriminate in favor of its own residents against the residents of other state members of our federation. On the other hand, in the present case, Ohio’s classification based on residence operates against Ohio residents and clearly presents no state action disruptive of the federal pattern. There is, therefore, no reason to judge the state action mechanically by the same principles as state efforts to favor residents. As my Brethren’s opinion makes clear, a rational basis can be found for this exercise by Ohio of the latitude permitted it to define classifications under the Equal Protection Clause. One could, in fact, be found in the concept that it is proper that those who are bound to a State by the tie of residence and accordingly the more permanently receive its benefits are proper persons to bear the primary share of its costs. Accordingly, in this context, it is proper to say that any relief forthcoming must be obtained from the State Legislature.

 To the same effect as the Wheeling case are Southern R. Co. v. Greene, 216 U. S. 400, and Hanover Fire Ins. Co. v. Harding, 272 U. S. 494.

 The Court distinguished ad valorem property taxes, levied on a foreign corporation permitted to do a local business, from an original entry privilege tax on a foreign corporation. 337 U. S., at 571-572. “A corporation which is allowed to come into a state and there carry on its business may claim, as an individual may claim, the protection of the Fourteenth Amendment against a subsequent application to it of state law.” Connecticut General Life Ins. Co. v. Johnson, 303 U. S. 77, 79-80.

 The statute in Wheeling “discriminated” against nonresidents in the same way that the present statute “discriminates” against residents. What my Brethren describe as the forbidden purpose of the distinction in Wheeling seems to me clearly to be only a rejected argument made by the State to show that there was no discrimination in fact. 337 U. S., at 572-574. I see no indication in Wheeling that the Court’s condemnation of the tax was based solely on its rejection of the “reciprocity” argument.