288 U.S. 517 (1933), 301, Louis K. Liggett Co. v. Lee

Docket Nº:No. 301
Citation:288 U.S. 517, 53 S.Ct. 481, 77 L.Ed. 929
Party Name:Louis K. Liggett Co. v. Lee
Case Date:March 13, 1933
Court:United States Supreme Court

Page 517

288 U.S. 517 (1933)

53 S.Ct. 481, 77 L.Ed. 929

Louis K. Liggett Co.



No. 301

United States Supreme Court

March 13, 1933

Argued January 12, 13, 1933



1. A state tax (Florida Laws 1931, c. 15624) on the privilege of opening and maintaining stores fixed at so much per store without regard to value or volume of business, and increasing progressively with the number of stores maintained by the owners taxed, is not in violation of the equal protection clause of the Fourteenth Amendment because of the resulting discrimination against them and in favor of owners of single and department stores or the owners of distinct stores in voluntary cooperation. State Board of Tax Comm'rs v. Jackson, 283 U.S. 527. P. 532.

2. A state statutory provision laying a heavier privilege tax per store on the owner whose stores are in different counties than on the owner whose stores are all in the same county is arbitrary and void. P. 533.

3. The county line furnishes no rational basis for such a classification. Id.

4. There is nothing in the Florida statute here in question indicating that the discrimination based on counties was directed against so-called "national chains" of stores, in contrast with "local chains," or against corporate owners, distinguished from individuals, or large owners distinguished from small. P. 534.

5. Assuming the State had power to suppress by taxation a form of organization deemed inimical to the public interest, no such motive can be attributed to the present statute in the absence of legislative declaration or record proof. P. 535.

6. Corporations are as much entitled to the equal protection of the laws guaranteed by the Fourteenth Amendment as are natural persons. P. 536.

7. Unequal treatment and arbitrary discrimination as between corporations and natural persons, or between different corporations, inconsistent with the declared object of the legislation, cannot be justified by the assumption that a different classification for a wholly different purpose might be valid. P. 536.

8. The provision authorizing counties and municipalities to levy license taxes on stores, to be graduated only on the number of stores situated within their respective limits, is constitutional. P. 537.

Page 518

9. A higher state tax on the goods held in storage by chain stores for retail sale in their own shops than on the goods stored by wholesalers, to be sold to retailers, is consistent with the equal protection clause. P. 537.

10. Taxing chain stores generally by graduated license taxes but excepting filling stations engaged exclusively in the sale of gasoline or other petroleum products, that business being otherwise taxed by license and by a tax per gallon of products sold, held consistent with the equal protection clause. P. 538.

11. The Fourteenth Amendment does not prevent a state from imposing differing taxes upon different trades and professions or varying the rates of excise upon various products. P. 538.

12. State taxes for the privilege of operating stores within the state and on the value of the goods warehoused in the state for sale in such stores held consistent with the commerce clause. P. 538.

13. A person is not exempted by the equal protection clause from paying a state tax because the tax is not collected by the state officials from others who are equally liable. Cumberland Coal Co. v. Board of Revision, 284 U.S. 23; Iowa-Des Moines Nat. Bank v. Burnett, 284 U.S. 239, distinguished. P. 539.

14. The remedy in such cases for taxpayers in Florida is by writ of mandamus commanding the tax officers to collect the omitted taxes. P. 540.

15. When, in a case from a state court, this Court finds that a part of a state statute is unconstitutional, it has jurisdiction to decide the question of state law whether the remainder is preserved by a saving clause, but may leave that determination to the courts of the state. P. 541.

104 Fla. 609, 141 So. 153, reversed.

Appeal from a decree affirming the dismissal of the bill in a suit to enjoin state taxing officers from enforcing an Act laying a discriminatory tax on chain stores.

Page 528

ROBERTS, J., lead opinion

MR. JUSTICE ROBERTS delivered the opinion of the Court.

Chapter 15624 of the Laws of Florida, 1931, declares it unlawful for any person, firm, corporation, association, or copartnership, foreign or domestic, to operate any store within the state without first having obtained a license, designates the officer to whom application shall be made, regulates the procedure for issuance of licenses, and provides for annual renewal. The act requires the payment of a filing fee, and, by § 5, which is copied in the margin, *

Page 529

fixes [53 S.Ct. 483] the amount of the license fee. A tax greater than that exacted for a single store is fixed for each store in excess of one, but not exceeding fifteen, owned or operated by the same person or corporation. The fee for each store is stepped up in amount as the number constituting the chain reaches certain specified limits. This graduated scale applies to stores all of which are within a single county, but if the same number of stores is located in more than one county, the license fee for each is materially increased.

The act imposes the tax only on retail stores and excludes from the definition of a store filling stations engaged exclusively in the sale of gasoline and other petroleum products. It provides for a separate county license tax equal to 25 percent of the state license fee, and authorizes a municipal tax of the same amount, measuring the graduated tax in the case of counties and municipalities by the number of stores situate

Page 530

in the county or municipality, notwithstanding the applicant may own other stores beyond the limits of the governmental subdivision.

In addition to the described license taxes, the act imposes a levy of $3 for each $1,000 of value of stock carried in each store, or for sale in such store, and this is defined to include merchandise owned by the taxpayer and held in storage to be sold in or through such store.

Three chain store owners filed in the Circuit Court of Leon County, Florida, a class bill in which twelve others intervened and became co-plaintiffs, praying that the tax officials be enjoined from enforcing the act. The complainants are corporations of Florida and other states. They challenge the statute as violative of various provisions of the Constitution of Florida, of the due process and equal protection clauses of the Fourteenth Amendment, and of the commerce clause of the Federal Constitution.

Page 531

The bill sets forth in great detail facts claimed to assimilate the operation of chain stores to that of stores individually owned and operated in the State of Florida. So-called voluntary chains of retail stores are described at length, and their methods of operation compared with those of chain stores, the purpose being to demonstrate that there is no essential difference between the two methods of conducting business. On the basis of the facts recited, the bill charges that to tax a store operated in the one manner and exempt an establishment conducted in the other is arbitrary and unreasonable. The difference in the amount of tax laid upon the operator of a given number of stores in a single county and another conducting the same number in two or more counties is challenged as an unconstitutional discrimination. The imposition of a tax of $3 per $1,000 on retail merchants, not only as respects the stock actually contained in their stores, but also on goods in warehouse intended for sale in such stores, is attacked as discriminatory for the reason that, under another statute, wholesale merchants are taxed only $1.50 per $1,000 of merchandise carried in their stores or warehouses. The exemption of filling stations is alleged to discriminate against the appellants in violation of the Fourteenth Amendment. The bill further avers that certain of the plaintiffs receive their goods from warehouses maintained outside the State of Florida, or order shipments to their stores from wholesale houses situate without the state, whereas many operators of single stores who are members of voluntary chains obtain their supplies from wholesalers in Florida, or from a warehouse in the state conducted by a voluntary chain corporation. The unequal effect of the act on these transactions is charged to be an unconstitutional burden upon interstate commerce.

The defendants moved to dismiss. The cause was heard upon this motion and a decree entered dismissing the bill at complainants' costs. The Supreme Court of

Page 532

Florida affirmed the decree. The present appeal presents only the questions arising under the Federal Constitution.

1. In support of the allegation of arbitrary and unreasonable discrimination, the bill recites facts from which appellants claim the conclusion is inevitable that there is no difference between the method of conducting chain stores and those employed in department stores, so-called voluntary chains, and singly operated units. This is but a reiteration of the contention made and overruled in State Board of Tax Commissioners v. Jackson, 283 U.S. 527. It was there held that, whatever may be said of individual similarities and differences between chain store operation and the conduct of a single shop or a department store, the former employ distinguishable methods of conducting business, and the legislature may make the difference in method and character of the [53 S.Ct. 484] business the basis of classification for taxation. In their bill, the complainants aver that the fact situation in Florida at the date of suit...

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