339 U.S. 542 (1950), 118, Capitol Greyhound Lines v. Brice
|Docket Nº:||No. 118|
|Citation:||339 U.S. 542, 70 S.Ct. 806, 94 L.Ed. 1053|
|Party Name:||Capitol Greyhound Lines v. Brice|
|Case Date:||May 15, 1950|
|Court:||United States Supreme Court|
Argued December 5, 1949
APPEAL FROM THE COURT OF APPEALS OF MARYLAND
Section 25A of Art. 66 1/2 of Maryland Annotated Code (1947 Cum.Supp.) imposes a tax of 2% of the fair market value of motor vehicles as a condition precedent to the issuance of certificates of title thereto and to the operation of the vehicles over Maryland roads. This tax is applied indiscriminately to interstate and intrastate common carriers transporting passengers over Maryland roads, and the proceeds are used wholly for road purposes. For the privilege of using its roads, Maryland also charges common carriers a mileage tax for each passenger seat of 1/30 of a cent per mile traveled on Maryland roads.
1. As applied generally to interstate carriers transporting passengers over Maryland roads, the title tax of 2% of fair market value does not violate the Commerce Clause of the Federal Constitution. Pp. 543-548.
(a) Such a tax must be judged by its result, not by its formula, and must stand unless proven to be in excess of fair compensation for the privilege of using the roads. Pp. 544-547.
(b) The title tax is not invalid on the ground that it varies for each carrier without relation to road use. Pp. 545-546.
(c) If a new rule prohibiting taxes on interstate carriers measured by vehicle value is to be declared, it should be declared by Congress, not by this Court. Pp. 547-548.
2. The record in this case is insufficient to invalidate the tax, as applied to appellants, on the ground that the taxes actually levied are in excess of a fair compensation for the privilege of using Maryland roads. P. 548.
___ Md. ___, 64 A.2d 284, affirmed.
The case is stated in the first two paragraphs of the opinion. The judgment below is affirmed, p. 548.
BLACK, J., lead opinion
MR. JUSTICE BLACK delivered the opinion of the Court.
The basic question presented is whether one of two Maryland taxes imposed on all common carriers transporting passengers over Maryland roads can be exacted from interstate carriers consistently with the commerce clause of the Federal Constitution. Art. 1, § 8, cl. 3. A subsidiary contention impliedly raised by carrier appellants here is that the tax is invalid as applied to them. The Supreme Court of Maryland upheld the tax, Md. 64 A.2d 284. The case of here on appeal under 28 U.S.C. § 1257(2).
The tax challenged by appellants is prescribed by § 25A of Art. 66 1/2 of the Annotated Code of Maryland, 1947 Cum.Supp. In the language of appellants, that section imposes
a tax of 2% upon the fair market value of motor vehicles used in interstate commerce as a condition precedent to the issuance of certificates of title thereto (the issuance of such certificates being a further condition precedent to the registration and operation of such vehicles in the Maryland). . . .1
First. Appellants do not contend that, as interstate carriers, they are wholly exempt from state taxation. This Court and others have consistently upheld taxes on interstate
carriers to compensate a state fairly for the privilege of using its roads or for the cost of administering state traffic regulations.2 Courts have invoked the commerce clause to invalidate state taxes on interstate carriers only upon finding that: (1) the tax discriminated against interstate commerce in favor of intrastate commerce; (2) the tax was imposed on the privilege of doing an interstate business, as distinguished from a tax exacting contributions for road construction and maintenance or for administration of road laws; or (3) the amount of the tax exceeded fair compensation to the state.3 This Maryland tax applies to interstate and intrastate commerce without discrimination. The tax proceeds are used by Maryland wholly for road purposes, and the State Supreme Court held that the tax was imposed for the privilege of road use. And neither in the Maryland courts nor here have appellants specifically charged that the amount of taxes imposed on carriers [70 S.Ct. 808] will always be in excess of fair compensation. Their challenge is leveled against the formula, not the amount.
The taxes upheld have taken many forms. Examples are taxes based on mileage, chassis weight, tonnage-capacity, or horsepower, singly or in combination -- a list which does not begin to exhaust the innumerable factors bearing on the fairness of compensation by each carrier to a state.4 The difficulty in gearing taxes to these factors was recognized by this Court as early as Kane v. New Jersey, 242 U.S. 160, 168, where it said that, so long as fees are reasonable in amount,
it is clearly within the discretion of the state to determine whether the compensation
for the use of its highways by automobiles shall be determined by way of a fee, payable annually or semiannually, or by a toll based on mileage or otherwise.5
Later, in rejecting contentions that the validity of taxes must be determined by formula, rather than result, the Court held that a flat fee on the privilege of using state highways "is not a forbidden burden on interstate commerce" unless "unreasonable in amount." Morf v. Bingaman, 298 U.S. 407, 412. See also Aero Mayflower Transit Co. v. Comm'rs, 332 U.S. 495, and annotation thereto, 92 L.Ed. 109, 119-120. Yet clearly a flat fee is not geared to mileage, weight, or any other factor relevant in considering the fairness of compensation for road use. Thus, unless we are to depart from prior decisions, the Maryland tax based on the cost of the vehicles should be judged by its result, not its formula, and must stand unless proven to be unreasonable in amount for the privilege granted.
Appellants, however, in effect urge that we make an exception to the general rule and strike down this tax formula regardless of whether the amount of the tax is within the limits of fair compensation. No tax precisely like this has previously been before us. Appellants argue that a tax on vehicle value should be forbidden by the commerce clause because it varies for each carrier without relation to road use. In support of this contention, they point to the facts shown in this record. Each of the appellant carriers, according to admitted allegations,
bought a new passenger-carrying vehicle and declared a purpose to use its vehicle on one of its Maryland routes. The Maryland portions of these three routes are 9, 41, and 64 miles, respectively. The state taxes, computed on the fair market value of each vehicle, are $505.17, $580 and $372.55, respectively. This showing does indicate that the title tax falls short of achieving uniformity among carriers in relation to road use. Moreover, as argued, it may well be unwise to subject carriers to the monetary temptation incident to the application of a tax that hits a carrier only when it purchases a bus. But that is not our issue. And it should be noted that the total charge of Maryland for the privilege of using its roads will not show the same disparity among carriers. For Maryland also charges a mileage tax,6 and this tax, added to the title tax, is what Maryland actually charges for its road privileges. Thus, the total charge as among [70 S.Ct. 809] carriers does vary substantially with the mileage traveled.
We recognize that, in the absence of congressional action, this Court has prescribed the rules which determine the power of states to tax interstate traffic, and therefore should alter these rules if necessary to protect interstate commerce from obstructive barriers. But, with full appreciation of congenital infirmities of the Maryland formula -- and indeed of any formula in this field -- as well as of our present rules to test its validity, we are by no means sure that the remedy suggested by appellants would not bring about greater ills. Complete fairness would require that a state tax formula vary with every factor affecting appropriate compensation for road use. These factors, like those relevant in considering the constitutionality of other state taxes, are so countless that we must be content with "rough approximation, rather than precision." International Harvester Co. v. Evatt, 329 U.S. 416, 422-423. Each additional factor adds to administrative burdens
of enforcement,7 which fall alike on taxpayers and government. We have recognized that such burdens may be sufficient to justify states in ignoring even such a key factor as mileage, although the result may be a tax which, on its face, appears to bear with unequal weight upon different carriers. Aero Transit Co. v. Georgia Comm'n, 295 U.S. 285, 289. Upon this type of reasoning rests our general rule that taxes like that of Maryland here are valid unless the amount is shown to be in excess of fair compensation for the privilege of using state roads.
Our adherence to existing rules does not mean that any group of carriers is remediless if the total Maryland taxes are out of line with fair compensation due to Maryland. Under the rules we have previously prescribed, such carriers may challenge the taxes as applied, and, upon proper proof, obtain a judicial declaration of their invalidity as applied. Ingels v. Morf, 300 U.S. 290. Cf. Clark v. Paul Gray, Inc., 306 U.S. 583.
If a new rule prohibiting taxes measured by vehicle value is to be declared, we think Congress should do it.8
We decline to hold that this Maryland title tax law is wholly invalid, however applied.
Second. Little need be said as to the faint contention here that the taxes actually levied against appellants are in excess of a fair compensation for the privilege of using Maryland roads. While the State...
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