American Sugar Refining Company v. State of Louisiana

• Citation: 45 L.Ed. 102,21 S.Ct. 43,179 U.S. 89
• Decision Date: 05 November 1900
• Docket Number: No. 38,38
• Parties: AMERICAN SUGAR REFINING COMPANY, Plff. in Err. , v. STATE OF LOUISIANA et al
• Court: United States Supreme Court

179 U.S. 89

21 S.Ct. 43

45 L.Ed. 102

AMERICAN SUGAR REFINING COMPANY, Plff. in Err.,

v STATE OF LOUISIANA et al.

No. 38.

Submitted October 10, 1900.

Decided November 5, 1900.

This was a petition filed in the civil district court for the parish of Orleans by John Brewster, tax collector, against the American Sugar Refining Company, a corporation engaged in the business of refining sugar and molasses, to recover the sum of $3,500 per year as a state license tax for the years 1892 to 1897, inclusive, alleged to be due under a statute of Louisiana enacted in 1890, entitled 'An Act to Levy, Collect, and Enforce Payment of an Annual License Tax upon all Persons, Associations of Persons, or Business Firms and Corporations Pursuing any Trade, Profession, Vocation, Calling, or Business, Except Those Who are Expressly Excepted from Such License Tax by Articles 206 and 207 of the Constitution.

By the 9th section it is enacted 'that for carrying on each business of . . . refining sugar and molasses . . . the license shall be based on the gross annual receipts of each person, association of persons, business firm or corporation engaged in said business as follows: Provided, that this section shall not apply to planters and farmers grinding and refining their own* sugar and molasses; . . . and provided, further, that it shall not apply to those planters who granulate syrup for other planters during the rolling season.'

First class. When the said gross actual receipts are $2,500,000 and over the license shall be $3,500.

This act was passed in pursuance of article 206 of the state Constitution of 1879, which reads as follows:

'Art. 206. The general assembly may levy a license tax, and in such case shall graduate the amount of such tax to be collected from the persons pursuing the several trades, professions, vocations, and callings. All persons, associations of persons, and corporations pursuing any trade, profession, business, or calling may be rendered liable to such tax, except clerks, laborers, clergymen, school teachers, those engaged in mechanical, agricultural, horticultural, and mining pursuits and manufacturers, other than those of distilled, alcoholic, or malt liquors, tobacco and cigars, and cotton-seed oil. No political corporation shall impose a greater license tax than is imposed by the general assembly for state purposes.'

Defense: First, that the business of refining sugar and molasses is exempt from the payment of any license tax, because it is one of those manufactures enumerated in article 206 as entitled to exemption. Second, that the act of 1890 'violates the Constitution of the United States, and is void in so far as it attempts to impose a license tax on this defendant, because said act denies to this defendant the equal protection of the laws of the state, inasmuch as said act does not impose equally a license tax on all persons engaged in the business of refining sugar and molasses, but discriminates in favor of planters who refine their own sugar and molasses, and in favor of planters who granulate syrups for other planters during the rolling season.'

The court, being of opinion that the business carried on by the defendant company was that of a manufacturer, dismissed the petition. On appeal to the supreme court, that court was of opinion that the defendant was not entitled to exemption under article 207 of the Constitution (not now in question), which exempted certain manufacturers, and ordered a judg- ment for $3,500, with interest and costs, for the license tax for the year 1897. But, upon the attention of the court being called by a petition for rehearing to article 206 of the Constitution, above quoted, that court delivered a new opinion to the effect that the defendant was not a manufacturer, and therefore not entitled to an exemption by article 206, and that the exemption of planters who refine their own sugar did not deprive the defendant of the equal protection of the laws. If further revised its judgment, and held the state entitled to recover for each of the years from 1892 to 1897, and rendered judgment for the sum of $3,500, for each of said years. Whereupon defendant sued out a writ of error from this court.

Messrs. John E. Parsons, Charles Carroll, and Joseph W. Carroll for plaintiff in error.

Mr. E. Howard McCaleb for defendants in error.

Mr. Justice Brown delivered the opinion of the court:

Motion was made to dismiss this writ of error upon the ground that the case did not present a Federal question, inasmuch as the question of illegal discrimination 'was not the principal matter litigated, but was put in the record for the purpose of obtaining this writ of error.' As, however, the protection of the 14th Amendment was invoked in the answer, and, as this defense is at least plausible upon its face, the motion to dismiss must be denied; but, the case having also been submitted upon the merits, we shall proceed to discuss the constitutional objection to the act.

It is scarcely necessary to say that the question whether the defendant were a manufacturer within the meaning of the Louisiana Constitution is one dependent upon the construction of that Constitution, and that the interpretation given to it by the state supreme court, raising, as it does, no question of contract, is obligatory upon this court; but as that court held the defendant liable upon the ground that it was engaged in the business of refining sugar, the further question is presented whether it is denied the equal protection of the laws because of the exemption from the tax of planters grinding and refining their own sugar and molasses.

The act in question does undoubtedly discriminate in favor of a certain class of refiners, but this discrimination, if founded upon a reasonable distinction in principle, is valid. Of course, if such discrimination were purely arbitrary, oppressive, or capricious, and made to depend upon differences of color, race, nativity, religious opinions, political affiliations, or other considerations having no possible connection with the duties of citizens as taxpayers, such exemption would be pure favoritism, and a denial of the equal protection of the laws to the less favored classes. But from time out of mind it has been the policy of this government, not only to classify for purposes of taxation, but to exempt producers from the taxation of the methods employed by them to put their products upon the market. The right to sell is clearly an incident to the right to manufacture or produce, and it is at least a question for the legislature to determine whether anything done to prepare a product most perfectly for the needs of the market shall not be treated as an incident to its growth or production. The act is not one exempting planters who use their sugar in the manufacture of articles of a wholly different...