Arco Auto Carriers, Inc. v. State ex rel. Bennett

• Decision Date: 21 November 1960
• Docket Number: No. 5-2253,5-2253
• Citation: 232 Ark. 779,341 S.W.2d 15
• Parties: ARCO AUTO CARRIERS, INC., et al., Appellants, v. STATE ex rel. Bruce BENNETT, Attorney General, Appellee.
• Court: Arkansas Supreme Court

Page 15

341 S.W.2d 15

232 Ark. 779

ARCO AUTO CARRIERS, INC., et al., Appellants, v. STATE ex rel. Bruce BENNETT, Attorney General, Appellee.

No. 5-2253.

Supreme Court of Arkansas.

Nov. 21, 1960.

Rehearing Denied Jan. 9, 1961.

George S. Dixon, Detroit, Mich., Louis Tarlowski, Little Rock, for appellants.

Bruce T. Bullion, Sp. Asst. to Atty. Gen., Bruce Bennett, Atty. Gen., of counsel, for appellee.

ROBINSON, Justice.

This action was brought by the State of Arkansas to enforce the collection of certain ad valorem taxes on trucks and equipment used by appellants in hauling for hire into and through the State of Arkansas in interstate commerce, automobiles and other merchandise. The issue is the validity of the tax. The chancellor held that the tax is valid, and the transportation companies have appealed. On motion of appellant Greyvan Lines, Inc., its appeal has been dismissed.

The tax is authorized by Ark.Stat. § 84-601. The property used in interstate commerce and in issue here is divided into two categories: The vehicles used in hauling merchandise into this State, and vehicles used in hauling merchandise through the State. Insofar as this case is concerned, there is no distinction. The vehicles used in both categories are engaged in interstate commerce. No provision of our Constitution is pointed out as prohibiting the act in question. But appellants vigorously argue that the statutes authorizing the tax, and also the action of the taxing officials of Arkansas in attempting to collect the tax, violate Article 1, § 8, the commerce clause of the United States Constitution, and the 14th Amendment.

Conceding that the owners of the equipment involved in this case could not be compelled to pay an excise or privilege tax (State v. American Refrigerator Transit Co., 151 Ark. 581, 237 S.W. 78), the fact remains that only an ad valorem tax is involved here, and the tax is on property that may be found in this State. It is immaterial that such property may not be moved on any regular route or schedule. Conceivably millions of dollars' worth of transportation equipment belonging to appellants could be in the State at all times, with the owners thereof being afforded the benefits and protection of a duly constituted, organized and functioning state government. And, moreover, the fact that no particular piece or pieces of such equipment would be here for any designated time should not relieve the owners thereof from bearing their fair share of maintaining and operating a state government, with all its ramifications, that serves all the people, including the owners of the transportation equipment found in the State, regardless of where such owners may be domiciled.

Of course, in the circumstances of the property not being in the State 100% of the time and subject to an ad valorem tax in other states, this State can only levy a tax based on a formula 'which fairly apportions the tax to the commerce carried on within the state.' Standard Oil Co. v. Peck, 342 U.S. 382, 72 S.Ct. 309, 310, 96 L.Ed. 427. In the case at bar it appears that such a formula was used, but if the formula is not fair, appellants have an administrative remedy. Ark.Stat. § 84-609-84-612, § 84-115. Here, however, they did not pursue the administrative remedy to a final conclusion.

This case is controlled by three cases heretofore decided by the United State Supreme Court. First is the case of Pullman's Palace-Car Co. v. Commonwealth of Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 878, 35 L.Ed. 613. There the Court said: 'For the purposes of taxation, as has been repeatedly affirmed by this court, personal property may be separated from its owner; and he may be taxed on its account at the place where it is, although not the place of his own domicile, and even if he is not a citizen or a resident of the state which imposes the tax. * * * It is equally well settled that there is nothing in the constitution or laws of the United States which prevents a state from taxing personal property employed in interstate or...