347 U.S. 590 (1954), 476, Braniff Airways, Inc. v. Nebraska Board of

Docket Nº:No. 476
Citation:347 U.S. 590, 74 S.Ct. 757, 98 L.Ed. 967
Party Name:Braniff Airways, Inc. v. Nebraska Board of
Case Date:June 01, 1954
Court:United States Supreme Court

Page 590

347 U.S. 590 (1954)

74 S.Ct. 757, 98 L.Ed. 967

Braniff Airways, Inc.


Nebraska Board of

No. 476

United States Supreme Court

June 1, 1954

Equalization and Assessment

Argued March 12, 1954



Pursuant to a Nebraska tax statute, an apportioned ad valorem tax was levied on the flight equipment of appellant, an interstate air carrier. Appellant is not incorporated in Nebraska, and does not have its principal place of business or "home port" in that State, but its aircraft make eighteen stops per day regularly in Nebraska and approximately one tenth of appellant's revenue is derived from the pickup and discharge of Nebraska freight and passengers. Appellant challenged the validity of the tax under the Federal Constitution, but it did not challenge the reasonableness of the apportionment prescribed by the taxing statute or the application of the apportionment to its property.

Held: appellant's flight equipment is not immune from taxation by Nebraska for want of situs there or because regulation of air navigation by the Federal Government precludes such state taxation. Pp. 591-602.

1. Federal statutes governing air commerce enacted under the commerce power do not preclude the challenged tax. Pp. 594-597.

2. Appellant has not demonstrated that the Commerce Clause otherwise bars this tax as a burden on interstate commerce. Pp. 597-598.

3. Whether an instrumentality of commerce has tax situs in a state for the purpose of subjection to a property tax is a question of due process; and that question was sufficiently presented by appellant in this case. Pp. 598-599.

4. Eighteen stops per day by appellant's aircraft was sufficient contact with Nebraska to sustain that State's power to levy an apportioned ad valorem tax on such aircraft, even though the same aircraft do not land every day, and even though none of the aircraft is continuously within the State. Pp. 599-601.

5. The power of Nebraska to levy this tax is not affected by the fact that the original plaintiff in this case was domiciled in Delaware, through which its planes did not fly, and that appellant (with which the original plaintiff was merged) is domiciled in Oklahoma, through which the aircraft in question make regular flights. P. 601.

Page 591

6. Northwest Airlines v. Minnesota, 322 U.S. 292, does not preclude states other than those of the corporate domicile from taxing instrumentalities of interstate commerce on the apportionment basis in accordance with their use in the taxing state. Pp. 601-602.

157 Neb. 425, 59 N.W.2d 746, affirmed.

REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

The question presented by this appeal from the Supreme Court of Nebraska is whether the Constitution bars the State of Nebraska from levying an apportioned ad valorem tax on the flight equipment of appellant, an interstate air carrier. Appellant is not incorporated in Nebraska, and does not have its principal place of business or home port registered under the Civil Aeronautics Act, 52 Stat. 977, 49 U.S.C. §§ 401-705, in that state. Such flight equipment is employed as a part of a system of interstate air commerce operating over fixed routes and landing on and departing from airports within Nebraska on regular schedules. Appellant does not challenge the reasonableness of the apportionment [74 S.Ct. 759] prescribed by the taxing statute or the application of such apportionment to its property. It contends only that its flight equipment used in interstate commerce is immune from taxation by Nebraska because without situs in that state and because regulation of air navigation by the Federal Government precludes such state taxation.

This petition for a declaratory judgment of the invalidity of §§ 77-1244 to 77-1250 of the state tax statute1

Page 592

and an injunction against the collection of taxes assessed under such provisions for previous years was filed as an original action in the court below by Mid-Continent Airlines, Inc., and tried upon stipulated facts. Subsequent to filing, but before the decision, Mid-Continent and appellant were merged on August 1, 1952, and appellant was substituted as the party plaintiff. Mid-Continent had been incorporated in Delaware with its corporate place of business in Wilmington in that state, and Braniff is incorporated in Oklahoma, and has its corporate place of business in Oklahoma City. Pursuant to the merger, Mid-Continent's main executive offices were moved from Kansas City, Missouri, and merged with appellant's in Dallas, Texas. The number of regularly scheduled stops in Nebraska, fourteen per day at Omaha and four at Lincoln, was not affected by the merger.

The home port registered with the Civil Aeronautics Authority and the overhaul base for the aircraft in question is the Minneapolis-St. Paul Airport, Minnesota. All of the aircraft not undergoing overhaul fly regular schedules upon a circuit ranging from Minot, North Dakota, to New Orleans, Louisiana, with stops in fourteen states including Minnesota, Nebraska, and Oklahoma. No stops were made in Delaware. The Nebraska stops are of short duration, since utilized only for the discharge and loading of passengers, mail, express, and freight, and sometimes for refueling. Appellant neither owns nor maintains facilities for repairing, reconditioning, or storing its flight equipment in Nebraska, but rents depot space and hires other services as required. The Supreme Court of Nebraska made no distinction as to taxability between those years when no flights were made into the state of domicile (Delaware) and those when flights did enter the state of new domicile (Oklahoma).

It is stipulated that the tax in question is assessed only against regularly scheduled air carriers, and is not applied

Page 593

to carriers who operate only intermittently in the state. The statute defines "flight equipment" as "aircraft fully equipped for flight,"2 and provides that

Any tax upon or measured by the value of flight equipment of air carriers incorporated or doing business in this state shall be assessed and collected by the Tax Commissioner.3

A formula is prescribed for arriving at the proportion of a carrier's flight equipment to be allocated to the state.4

[74 S.Ct. 760] The statute uses the allocation formula of the "proposed uniform statute to provide for an equitable method of state taxation of air carriers" adopted by the Council of State Governments upon the recommendation of the National Association of Tax Administrators in 1947.5 Use of a uniform allocation formula to apportion air carrier taxes among the states follows the recommendation of the Civil Aeronautics Board in its report to Congress.6

Page 594

The Nebraska statute provides for reports, levy, and rate of tax by state average.7

Required reports filed by Mid-Continent for 1950 show that about 9% of its revenue and 11 1/2% of the total system tonnage originated in Nebraska, and about 9% of its total stops were made in that state. From these figures, using the statutory formula, the Tax Commissioner arrived at a valuation of $118,901 allocable to Nebraska, resulting in a tax of $4,280.44. Since Mid-Continent filed no return for 1951, the same valuation was used, and an increased rate resulted in assessment of $4,518.29. The Supreme Court of Nebraska held the statute not violative of the Commerce Clause, and dismissed appellant's petition.8

Appellant argues that federal statutes governing air commerce enacted under the commerce power preempt the field of regulation of such air commerce, and preclude this tax. Congress, by the Civil Aeronautics Act of 1938, 52 Stat. 977, 1028, § 1107(i)(3), 49 U.S.C. § 176(a), enacted:

The United States of America is declared to possess and exercise complete and exclusive national sovereignty in the air space above the United States, including the air space above all inland waters and the air space above those portions of the adjacent

Page 595

marginal high seas, bays, and lakes, over which by international law or treaty or convention the United States exercises national jurisdiction.

This provision originated in the Air Commerce Act of 1926, 44 Stat. 568, 572, § 6. The 1938 Act also declares "a public right of freedom of transit" for air commerce in the navigable air space to exist for any citizen of the United States. 52 Stat. 980, § 3, 49 U.S.C. § 403.9

The provision pertinent to sovereignty over the navigable air space in the Air Commerce Act of 1926 was an assertion of exclusive national sovereignty. The convention between the United States and other nations respecting international civil aviation ratified August 6, 1946, 61 Stat. 1180, accords. The Act, however, did not expressly exclude the sovereign powers of the states. H.R.Rep.No. 572, 69th Cong., 1st Sess., p. 10. The Civil Aeronautics Act of 1938 gives [74 S.Ct. 761] no support to a different view.10 After the enactment of the Air Commerce Act, more than twenty states adopted the Uniform Aeronautics Act. It had three provisions indicating that the states did not consider their sovereignty affected by the National Act except to the extent that the states had ceded that sovereignty by constitutional grant.11 The

Page 596

recommendation of the National Conference of Commissioners on Uniform State Laws to the states to enact this Act was withdrawn in 1943.12 Where adopted, however, it continues in effect. See United States v. Praylou, 208 F.2d 291. Recognizing this "exclusive national sovereignty" and right of freedom in air transit, this Court, in United States v. Causby, 328 U.S. 256, 261, nevertheless held that the owner of land might recover for a taking by national use of navigable air space,...

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