General American Tank Car Corporation v. Day

Decision Date01 March 1926
Docket NumberNo. 162,162
PartiesGENERAL AMERICAN TANK CAR CORPORATION et al. v. DAY, Sheriff, etc
CourtU.S. Supreme Court

Messrs. Sigmund W. David, of Chicago, Ill., and Edwin T. Merrick, of New Orleans, La., for appellants.

[Argument of Counsel from pages 368-369 intentionally omitted] Mr. Harry P. Sneed, of New Orleans, La., for appellee.

Mr. Justice STONE delivered the opinion of the Court.

Appellants brought suit in the United States District Court for Eastern Louisiana to enjoin the appellee from collecting, by seizure of appellants' property, a tax assessed against them by the state of Louisiana. From a judgment dismissing the bill the case comes here on direct appeal by reason of the constitutional questions involved. Judicial Code, § 238 (Comp. St. § 1215), before amendment of 1925; Hays v. Port of Seattle, 40 S. Ct. 125, 251 U. S. 233, 64 L. Ed. 243; Arkadelphia Milling Co. v. St. Louis & S. W. Ry. Co., 39 S. Ct. 237, 249 U. S. 134, 6o L. Ed. 517.

The tax in question was imposed under section 5 of Act 109 of the Louisiana Laws of 1921. Section 1 of that act imposes a tax, for state purposes, of 5 1/4 mills on the dollar on all property within the state. Section 5 authorizes the assessment of an additional tax for state purposes of 25 mills on the dollar 'of the assessed value of all rolling stock of nonresident * * * corporations, having no domicile in the state of Louisiana, operated over any railroad in the state of Louisiana within or during any year for which such tax is levied. * * *' Article 10, s 16, of the Louisiana Constitution, exempts from all local taxation nonresidents paying the 25-mill tax. Appellants do not complain of the 5 1/4-mill tax assessed against them under section 1; nor do they question the amount or method of computation of the 25-mill tax assessed under section 5; but they object to it on the ground that it violates the Constitution of Louisiana, which requires that 'all taxes shall be uniform upon the same class of subjects' (article 10, § 1), and on the ground that, as applied to appellants, it violates the federal Constitution by imposing a burden on interstate commerce, and denies to appellants the equal protection of the laws, in that it discriminates unreasonably between residents of Louisiana or nonresidents domiciled within the state, and nonresidents not so domiciled and engaged in interstate commerce.

All the appellants are corporations organized in states other than Louisiana and are not domiciled or licensed to do business in that state. All own and operate within the state tank cars, for the transportation of oil, which are used in interstate commerce. Taxes on property within the state of Louisiana, other than state taxes, are assessed where the taxpayer is domiciled, by the several parishes and by municipalities in the parishes, both of which are political subdivisions of the state. In some parishes, local taxes exceed 25 mills, and in others they are less than that amount; but it is asserted by the appellee that the average of all local property taxes is approximately 25 mills.

The tax in question is authorized by article 10, § 16, of the Louisiana Constitution, which reads as follows:

'Sec. 16. Rolling stock operated in this state, the owners of which have no domicile therein, shall be assessed by the Louisiana tax commission, and shall be taxed for state purposes only, at a rate not to exceed forty mills on the dollar of assessed value.'

The constitutionality of the 25-mill tax imposed under this section was upheld by the Supreme Court of Louisiana in Union Tank Car Co. v. Day, 101 So. 581, 156 La. 1071, and that case disposes of the objections urged here to the validity of the tax under the state Constitution.

It is argued that the 25-mill tax which was imposed on tank cars belonging to the several appellants is a thinly disguised attempt to compel nonresidents doing interstate business in Louisiana to declare a domicile in the state, and that it is therefore an unconstitutional burden on interstate commerce, within the principle of those cases holding that a state may not require a nonresident to procure a license to do business or to declare a domicile within the state as a condition to engaging in commerce across its boundaries. International Text-Book Co. v. Pigg, 30 S. 481, 217 U. S. 91, 54 L. Ed. 678, 27 L. R. A. (N. S.) 493, 18 Ann. Cas. 1103; Dahnke-Walker Milling Co. v. Bondurant, 42 S. Ct. 106, 257 U. S. 282, 66 L. Ed. 239. But it is obvious, from an inspection of the statute, that the tax in question is imposed on property of nonresidents in lieu of the local tax assessed in the several parishes of the state on property of persons or corporations domiciled there, and that the nonresident may either pay the state tax assessed under section 5 or, at his option, by becoming domiciled in a parish, pay instead of it the local taxes assessed within the parish. The effect of section 5 is not to require the nonresident corporation to take out a license to do business within the state, but only to subject its property within the state to state taxation. There being no question as to the amount of the tax or the method of its computation, the taxation of appellants' property within the state can be open to no objection, unless it operates to discriminate in some substantial way between the property of the appellants and the property of residents or domiciled nonresidents. Cudahy Packing Co. v. Minnesota, 38 S. Ct. 373, 246 U. S. 450, 62 L. Ed. 827. And see Pullman Palace...

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