324 U.S. 652 (2008), Hooven & Allison Co. v. Evatt
|Citation:||324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252|
|Party Name:||Hooven & Allison Co. v. Evatt|
|Case Date:||April 09, 1945|
|Court:||United States Supreme Court|
CERTIORARI TO THE SUPREME COURT OF OHIO
1. Where, upon review here of state court decisions, the existence of an asserted federal right or immunity depends upon the appraisal of undisputed facts of record, or where reference to the facts is necessary to the determination of the precise meaning of the federal right or immunity, as applied, this Court is free to reexamine the facts as well as the law in order to determine for itself whether the asserted right or immunity is to be sustained. P. 659.
2. Since it appears on consideration of petitioner's course of business and of the circumstances attending the importation that petitioner was the inducing and efficient cause of bringing the fibers into the country, which is importation, petitioner, not the foreign sellers or the agents, was the importer of fibers brought from the Philippine Islands and other places outside the United States, and the constitutional immunity from state taxation of the imported fibers survived their delivery to petitioner. Pp. 659, 664.
3. For the purpose of determining whether petitioner was the importer in the constitutional sense, it is immaterial whether title to the merchandise vested in the petitioner at the time of shipment or only after its arrival in this country. P. 662.
4. When merchandise is brought here from another country, the extent of its immunity from state taxation turns on the essential nature of the transaction, considered in the light of the constitutional purpose, and not on the formalities with which the importation is conducted or on the technical procedures by which it is effected. P. 663.
5. The purpose of the constitutional prohibition of state taxes on imports is to protect the exclusive power of the national government to tax imports and to prevent what, in matter of substance, would amount to the imposition of additional import duties by States in which the property might be found or stored before its sale or use. P. 664.
6. The constitutional immunity of the imports from state taxation was not lost by their storage (in the original packages) in warehouses
at petitioner's factory pending their use in petitioner's manufacturing operations for which they were imported. Pp. 664, 668.
7. For the purpose of the constitutional immunity, it is immaterial whether the imported merchandise is stored (in the original packages) in the importer's warehouse at the port of entry or in an interior State. P. 664.
8. Upon the record in this case, there is no reason to consider whether, for purposes of the constitutional immunity, the mere presence of some fibers in the factory was so essential to current manufacturing requirements that they could be said to have entered the process of manufacture, and hence were already put to the use for which they were imported. P. 667.
9. Such discriminations as there may be against domestic and in favor of foreign producers of goods in this situation are implicit in the constitutional provision and in its purpose to protect imports from state taxation. P. 667.
10. The difficulty of ascertaining in particular cases when an original package is broken arises out of the original package rule itself. P. 668.
11. Reconciliation of the competing demands of the constitutional immunity of imports and of the state's power to tax is an extremely practical matter. P. 668.
12. In view of the constitutional authority of Congress to consent to state taxation of imports, and hence to lay down its own test for determining when the immunity ends, there is no convincing practical reason for abandoning the original package rule, or, if it is to be retained in the case of imports for sale, for rejecting it in the case of imports for manufacture. P. 668.
13. Articles brought from the Philippine Islands into the United States are imports subject to the constitutional provisions relating to imports -- both because they are brought into the United States and because the place whence they are brought is not a part of the United States in the constitutional sense to which the provisions with respect to imports are applicable. Pp. 668, 679.
Certiorari, 321 U.S. 762, to review a judgment sustaining an assessment of state taxes.
STONE, J., lead opinion
MR. CHIEF JUSTICE STONE delivered the opinion of the Court.
Respondent, a tax official of the state of Ohio, has assessed for state ad valorem taxes certain bales of hemp and other fibers belonging to petitioner. The fibers had been brought from the Philippine Islands or from other places outside the United States. When assessed for the tax, they were stored in the original packages in which they had been imported, in petitioner's warehouse at its factory at Xenia, Ohio, preliminary to their use by petitioner in the manufacture of cordage and similar products.
The State Board of Tax Appeals sustained the assessment for the three years in question, 1938, 1939, and 1940. Petitioner then brought the present proceeding in the Supreme Court of Ohio to review the Board's determination. That court rejected petitioner's contention that the fibers are imports, immune from state taxation under Article, I, § 10, cl. 2, of the Constitution, which prohibits state taxation of imports or exports, and it sustained the tax. 142 Ohio St. 235, 51 N.E.2d 723.
The State Court recognized that Brown v. Maryland, 12 Wheat. 419, established the rule that imports in their original packages may not be taxed by a state. But it thought that the present case fell within the qualification upon that rule laid down in Waring v. The Mayor, 8 Wall. 110. The Waring case held that, since a purpose of importation is sale, imports are immune from state taxation only so long as they are in the hands of the importer, and lose their immunity upon being sold by him. The Supreme Court of Ohio held that petitioner acquired title to the merchandise here taxed after its arrival in this country. It concluded from this that the foreign
sellers or their agents, and not petitioner, were the importers, and that the merchandise, after the sale to petitioner, had ceased to be an import constitutionally immune from state taxation.
In any case, the Ohio court thought that, even if petitioner were the importer and the merchandise were immune from taxation on its receipt by petitioner, it nevertheless ceased to be an import, and lost its immunity as such, upon its storage at petitioner's warehouse awaiting its use in manufacturing. The Court thought that Brown v. Maryland, supra, laid down a rule applicable only to imports for the purpose of sale, and that imports for use became, upon storage, even if still in the original package, so intermingled with the common mass of property within the state as to be subject to the state power of taxation.1 The Court found it unnecessary to decide whether the fibers brought from the Philippine Islands, which are not a foreign country, could be imports within the meaning of the constitutional immunity, since they would be taxable in any event upon the two grounds already stated.
We granted certiorari, 321 U.S. 762, because of the novelty and importance of the constitutional questions raised. The questions for decision are (1) whether, with respect to the fibers brought from foreign countries, petitioner was their importer; if so, (2) whether, as stored in petitioner's warehouse, they continued to be imports at the time of the tax assessment, and (3) whether the fibers brought from the Philippine Islands, despite the place of their origin, are likewise imports rendered immune from taxation by the constitutional provision.
[65 S.Ct. 873] The Constitution confers on Congress the power to lay and collect import duties, Art. I, § 8, and provides that
State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws. . . .
Art. I, § 10, Cl. 2. These provisions were intended to confer on the national government the exclusive power to tax importations of goods into the United States. That the constitutional prohibition necessarily extends to state taxation of things imported, after their arrival here and so long as they remain imports, sufficiently appears from the language of the constitutional provision itself and its exposition by Chief Justice Marshall in Brown v. Maryland, supra. We do not understand anyone to challenge that rule in this case.
It is obvious that, if the states were left free to tax things imported after they are introduced into the country and before they are devoted to the use for which they are imported, the purpose of the constitutional prohibition would be defeated. The fears of the framers, that importation could be subjected to the burden of unequal local taxation by the seaboard at the expense of the interior states, would be realized as effectively as though the states had been authorized to lay import duties.2 It is evident, too, that, if the tax immunity of imports, commanded by the Constitution, is to be reconciled with the right of the states to tax goods after their importation has become complete and they have become a part of the common mass of property within a state, "there must be a point of time when the prohibition ceases, and the power of the state to tax commences." Brown v. Maryland, supra, 441.
In Brown v. Maryland, supra, the state sought to impose a license tax on the sale by the importer of goods stored in his warehouse in the original packages in which they
were imported. In holding the levy to be a prohibited tax on imports, Chief Justice Marshall said (pp. 441-442):
It is sufficient for the present to say generally that,...
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