63 P.2d 532 (Wash. 1937), 26324, Puget Sound Stevedoring Co. v. State Tax Com'n of Washington

Docket Nº:26324.
Citation:63 P.2d 532, 189 Wash. 131
Opinion Judge:HOLCOMB, Justice.
Party Name:PUGET SOUND STEVEDORING CO. v. STATE TAX COMMISSION OF WASHINGTON et al.
Attorney:[189 Wash. 132] Grosscup, Morrow & Ambler, of Seattle, for appellant. G. W. Hamilton and E. P. Donnelly, both of Olympia, for respondents.
Judge Panel:MILLARD, C.J., and MITCHELL, BEALS, and TOLMAN, JJ., concur.
Case Date:January 06, 1937
Court:Supreme Court of Washington

Page 532

63 P.2d 532 (Wash. 1937)

189 Wash. 131

PUGET SOUND STEVEDORING CO.

v.

STATE TAX COMMISSION OF WASHINGTON et al.

No. 26324.

Supreme Court of Washington

January 6, 1937

Department 2.

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Action by the Puget Sound Stevedoring Company against the State Tax Commission of the state of Washington and Harold H. Henneford and others, as members of the commission. From an adverse judgment the plaintiff appeals.

Affirmed.

[189 Wash. 132] Grosscup, Morrow & Ambler, of Seattle, for appellant.

G. W. Hamilton and E. P. Donnelly, both of Olympia, for respondents.

HOLCOMB, Justice.

This is an appeal from a judgment dismissing, with prejudice, an action instituted to secure injunctive relief against the application to and enforcement against appellant of the so-called 'Business and Occupation Tax Laws' as contained in chapter 191, p. 869, Laws of 1933, as amended and added to by chapter 57, p. 157, Ex.Sess., Laws of 1933, and chapter 180, p. 706, Laws of 1935.

In asserting that the business and occupational tax laws are not applicable to appellant, it is argued that appellant's business activities are within the exclusive jurisdiction and control of the federal government inasmuch as the tax, if enforced against appellant, would amount to a burden, hindrance, and obstruction upon interstate and foreign commerce contrary to article 1, § 8, of the United States Constitution, and, further, that the imposition of the tax upon appellant would constitute a denial of equal protection of the laws in violation of the Fourteenth Amendment to the Constitution of the United States and of article 1, § 12, of our State Constitution in that the tax could not be imposed upon shipowners doing their own stevedoring instead of employing the services of an independent contractor, such as appellant. It is finally claimed that the imposition of the tax would deprive appellant of its property without due process of law in violation of the Fourteenth Amendment to the Constitution

Page 533

of the United States and article 1, § 3, of the Constitution of this state in that such tax is arbitrary, unreasonable, excessive, and confiscatory.

Appellant, a Washington corporation, is now [189 Wash. 133] and for some years past has been engaged solely in the business of stevedoring at different ports within the state. It carries on its business by means of contracts which it makes with shipowners or shipmasters. These contracts are of three types; the first two provide for loading cargo on or discharging it from a ship, appellant employing the stevedores over whom it exercises control and whose operations it directs under general instructions and supervision of the ship's master. These contracts differ only in the method of determining the compensation to be paid appellant. By the third type of contract appellant, for a consideration, merely supplies the stevedores who work under the direction and complete supervision of the ship's officers, appellant advancing the pay to the laborers and thereafter collecting from the shipowner or master the amount of the pay rolls, plus commission for services. Under the first two types of contracts, the winches and steam for operating them, the booms, cargo-falls, and other deck appliances are usually supplied from the ship, while the slings, trucks, and other cargo handling equipment are furnished by appellant. All the cargo handled under all three types of contracts moves in either interstate or foreign commerce or both and most of it is loaded on or unloaded from vessels flying foreign flags. The men hired by or through the company work on the ship or dock, or both. A further fact to be noted is that some shipowners employ stevedores without engaging the services of a stevedoring company and in some instances the ship's crew does the stevedoring work.

We are satisfied that the record fully supports respondent's contention that appellant makes its contracts and renders its services thereunder as an independent contractor. Standard Oil Co. v. Anderson, 212 U.S. 215, 29 S.Ct. 252, 53 L.Ed. 480.

[189 Wash. 134] The real question, however, is whether the excise tax constitutes such a burden on interstate and foreign commerce as to violate the...

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