Interstate Busses Corporation v. Blodgett

• Citation: 72 L.Ed. 551,48 S.Ct. 230,276 U.S. 245
• Decision Date: 20 February 1928
• Docket Number: No. 197,197
• Parties: INTERSTATE BUSSES CORPORATION v. BLODGETT, Tax Commissioner of Connecticut, et al
• Court: United States Supreme Court

276 U.S. 245

48 S.Ct. 230

72 L.Ed. 551

INTERSTATE BUSSES CORPORATION

v BLODGETT, Tax Commissioner of Connecticut, et al.

No. 197.

Argued Jan. 19, 20, 1928.

Decided Feb. 20, 1928.

Mr. Edward Kelly, of Hartford, Conn., for appellant.

[Argument of Counsel from pages 246-248 intentionally omitted] Mr. Justice STONE delivered the opinion of the Court.

The appellant, complainant below, is a Connecticut corporation engaged in the transportation of passengers in motor busses, exclusively in interstate commerce, between Connecticut and points in Massachusetts and Rhode Island. The present suit was brought in the district court for Connecticut to restrain appellees, tax officials of the state, from levying a tax on appellant under a Connecticut statute, Pub. Acts Conn. 1925, c. 254, on the ground that the tax is a unconstitutional burden on interstate commerce. Application to a court of three judges for an interlocutory injunction under Judicial Code, § 266 (28 USCA § 380), was denied, 19 F.(2d) 256, and on final hearing the court dismissed the bill on the merits. The application for the preliminary injunction having been pressed to a determination before the court of three judges, the case is properly here on direct appeal from the final decree of that court. Judicial Code, §§ 238, 266 (28 USCA §§ 345, 380); Smith v. Wilson, 273 U. S. 388, 47 S. Ct. 385, 71 L. Ed. 699; Clark v. Poor, 274 U.S. 554, 47 S.Ct. 702, 71 L.Ed. 1199.

The appellant has already complied with the general statutes of Connecticut requiring the registration of motor vehicles. Part 2, § 1, of the act in question, imposes a tax of one cent for each mile of highway traversed by any motor vehicle used in interstate commerce 'as an excise on the use of such highway.' By part 2, § 4, the proceeds of the tax are to be applied to the maintenance of public highways in the state.

Appellant objects to the tax as an infringement of the paramount power of Congress to regulate interstate commerce, or at least as a discrimination against that commerce. It is not denied that a state may impose a registration or license fee on those using motor vehicles in the state, although engaged in interstate commerce, or that the state may impose a reasonable charge for the use of its highways by motor vehicles so employed, Hendrick v. Maryland, 235 U. S. 610, 35 S. Ct. 140, 59 L. Ed. 385; Kane v. New Jersey, 242 U. S. 160, 37 S. Ct. 30, 61 L. Ed. 222; Clark v. Poor, supra, and there is no evidence that the tax here is in itself an unreasonable charge for the privilege. But it is said that the particular scheme of taxation adopted by Connecticut imposes this tax in addition to statutory charges already made for the use of the highways in interstate commerce, and both in purpose and in effect discriminates against appellant and in favor of those operating motor vehicles in intrastate commerce.

The state has adopted a system of financing its highway construction and maintenance under which about 80 per cent. of the cost is collected from fees for the registration of motor vehicles and for operators' licenses, from taxes on the sale of gasoline and from fines and penalties for violations of the motor vehicle laws. The balance of the cost is paid from general appropriations by the state Legislature and a certain amount received under federal aid legislation. Appellant, it is conceded, pays certain taxes imposed alike on those engaged in intrastate and interstate commerce. These include a personal property tax upon its motor cars used in the state, a registration or license fee for each vehicle so used, and also, it is urged, a tax of two cents a gallon on the sale of gasoline within the state which in practice is absorbed by the consumer in the purchase price.

But no mileage tax like that imposed by part 2, § 1, is levied upon those using motor vehicles in intrastate commerce. Instead part 1, §§ 2 and 3, of the act under discussion, subject all companies engaged in intrastate motor bus transportation to an excise of 3 per cent. of their gross receipts, less such taxes as they have paid locally on their 'real and tangible personal estate.' By part 1, § 6, this excise is declared to be in lieu of all taxes on intangible personal property. Moreover, those who pay it are exempt from the income tax of 2 per cent. imposed generally on corporations, including, apparently, the appellant. Conn. Gen. Stat., c. 73, as amended. It like the mileage tax is devoted to the maintenance of...