Capitol Greyhound Lines v. Brice

• Citation: 94 L.Ed. 1053,17 A.L.R.2d 407,70 S.Ct. 806,339 U.S. 542
• Decision Date: 15 May 1950
• Docket Number: No. 118,118
• Parties: CAPITOL GREYHOUND LINES et al. v. BRICE, Commissioner of Motor Vehicles of Maryland
• Court: United States Supreme Court

339 U.S. 542

70 S.Ct. 806

94 L.Ed. 1053

CAPITOL GREYHOUND LINES et al.

v BRICE, Commissioner of Motor Vehicles of Maryland.

No. 118.

Argued Dec. 5, 1949.

Decided May 15, 1950.

Clarence W. Miles, Baltimore, Md., for appellants.

Hall Hammond, Baltimore, Md., for appellee.

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), 28 U.S.C.A. § 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 State of 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 inter- state 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 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. State of New Jersey, 242 U.S. 160, 168, 37 S.Ct. 30, 32, 61 L.Ed. 222, 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 compen- sation 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, 56 S.Ct. 756, 758, 80 L.Ed. 1245. See also Aero Mayflower Transit Co. v. Board of R. R. Com'rs, 332 U.S. 495, 68 S.Ct. 167, 92 L.Ed. 99, 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 al- legations, 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 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, 67 S.Ct. 444, 447, 91 L.Ed. 390. Each additional factor adds to administrative bur- dens 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 Mayflower Transit Co. v. Georgia Public Service Comm'n, 295 U.S. 285, 289, 55 S.Ct. 709, 710, 79 L.Ed. 1439. 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, 57 S.Ct. 439, 81 L.Ed. 653. Cf. Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001.

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 Supreme Court did pass on this question, holding that appellants had failed to prove excessiveness, the assignments of error here did not specifically mention such a challenge. That court satisfactorily disposed of any question of the size of the fees in relationship to the road privileges granted. The burden of proof in this respect is on a carrier who challenges a state law. Clark v. Paul Gray, Inc., 306 U.S. 583, 598—600, 59 S.Ct. 744, 752, 753, 83 L.Ed. 1001. We agree with the Supreme Court of Marylnd that here there is a complete and utter lack of proof sufficient to invalidate the state law on this ground. See Dixie Ohio Express Co. v. State Revenue Commission of Georgia, 306 U.S. 72, 77—78, 59 S.Ct. 435, 437, 438, 83 L.Ed. 495.

Affirmed.

Mr. Justice DOUGLAS took no part in the consideration or decision of this case.

Mr. Justice FRANKFURTER, whom Mr. Justice JACKSON joins, dissenting.

Once more we are called upon to subject a State tax on interstate motor traffic to the scrutiny which the Commerce Clause requires so that interstate commerce may enjoy freedom from State taxation outside of those narrow limits within which States are free to burden such commerce.

The essential facts are easily stated. By various provisions of Maryland law, an interstate motor carrier may not operate its vehicles within the State until it has registered them. As a prerequisite to registration the car- rier must obtain a certificate of title for each vehicle. Section 25A of Article 66 1/2 of the Annotated Code of Maryland, 1947 Cum.Supp., imposes a so-called titling tax of 2% of the 'fair market value' of each motor vehicle 'for the issuance of every original certificate of...