Armstrong v. City of Tampa

• Decision Date: 24 February 1960
• Citation: 118 So.2d 195
• Parties: Helen ARMSTRONG, Mary W. McKenzie, Clara Einhorn, Nancy Stroup and Jimmie C. Rosier, Petitioners, v. CITY OF TAMPA, Florida, a Municipal Corporation, and John D. Latture, as Chief of Police of said City, Respondents.
• Court: Florida Supreme Court

Page 195

118 So.2d 195

Helen ARMSTRONG, Mary W. McKenzie, Clara Einhorn, Nancy Stroup and Jimmie C. Rosier, Petitioners, v. CITY OF TAMPA, Florida, a Municipal Corporation, and John D. Latture, as Chief of Police of said City, Respondents.

Supreme Court of Florida.

Feb. 24, 1960.

Mabry, Reaves, Carlton, Fields & Ward and J. A. McClain, Jr., Tampa, for petitioners.

R. A. Marsicano, Neil C. McMullen, William R. McCown and James M. McEwen, Tampa, for respondents.

THORNAL, Justice.

By petition for certiorari we are requested to review a decision of the District Court of Appeal, Second District, 112 So.2d 293, on account of alleged conflicts with prior decisions of this Court.

We must determine whether a municipal flat sum license or privilege tax and a graduated gross receipts license or privilege tax unduly burden interstate commerce, when applied to the business conducted by the petitioners.

The factual situation is clearly delineated in the opinion of the Court of Appeal. For coherence, we mention that petitioner Armstrong is the Tampa area supervisor of Avon Products Incorporated, a New York corporation, with a branch outlet in Atlanta, Georgia. The other petitioners are independent solicitors who are not employees of Avon. They solicit sales of Avon products from door to door in Tampa. Each Tampa solicitor combines several orders and the products are shipped by Avon from Atlanta via common carrier. Customarily a number of orders are shipped in one package to the Tampa solicitor, she in turn opens the package, delivers the product to each customer, collects the purchase price, retains her commission and remits the remainder to Avon's Atlanta office. The solicitors also collect the Florida sales tax for each item, remit the same to Avon, which in turn remits to the State of Florida. All petitioners are residents of Tampa or surrounding areas in Hillsborough County.

The City of Tampa, by ordinance, requires the payment of an annual flat sum license or privilege tax of $50 by brokers or agents for the sale of merchandise not otherwise classified by the ordinance. In addition, the city imposes a license or privilege tax on every retail merchant 'measured by the amount of gross sales made by such merchant * * *.' The merchant is required to file an annual report of gross sales made in the City of Tampa. The amount of this tax is $10 on the first $3,000 or less of gross sales and $1 on each $1,000 of gross sales or a major fraction thereof above $3,000. The city insists that petitioners should pay both of these privilege taxes.

Petitioners Armstrong, et al., sought an injunction against the collection of the two taxes. The Chancellor was of the view that the act of solicitation constituted a 'separable intrastate incident' which would support the imposition of both privilege taxes. See Armstrong v. City of Tampa, Fla., 106 So.2d 407. The Court of Appeal did not undertake to isolate the so-called 'separable intrastate incident.' On the other hand, that court, while apparently recognizing the interstate character of the petitioners' business, leveled its conclusion approving both taxes on the broad proposition that there has been a liberalization of the historic restraints against local burdens on interstate commerce. Relying on several recent decisions, by which it has been stated that interstate commerce can be required to carry its fair share of the cost of local government by a tax not otherwise objectionable, the Court of Appeal proceeded to the conclusion that the instant taxes were collectible under the later cases. By the opinion now submitted for review, the Court of Appeal stated 'it appears that if a tax does not aim at or discriminate against interstate commerce it may properly be levied.' It was further stated that the assertion of the taxing power by the municipality 'is only unconstitutional where it is discriminatory in character, or where it impedes such commerce, or where it amounts to multiple taxation.' The Court of Appeal affirmed the Chancellor.

Petitioners ask us to review by certiorari the decision of the Court of Appeal because of an alleged conflict with our prior decision in Olan Mills, Inc. v. City of Tallahassee, Fla., 100 So.2d 164, and similar cases discussed in their brief. Article V, Section 4, Florida Constitution, F.S.A.

Being dubious of the proper appellate procedure and commendably out of an abundance of caution, petitioners also filed a notice of appeal to review the decision by appeal on the theory that the Court of Appeal initially construed a controlling provision of the Federal Constitution. Article V, Section 4, Florida Constitution.

We have taken jurisdiction via the certiorari route because of the alleged conflict of decisions. When this matter was previously before us, 106 So.2d 407, we transferred it to the Court of Appeal for the reason that the Chancellor had not construed a controlling provision of the Federal Constitution. To dispose of this matter, therefore, we must look to the decision under review and measure it against the backdrop of our own prior decisions to ascertain whether the alleged conflicts are present.

Petitioners contend that our prior decisions condemn a flat sum privilege or license tax when imposed on one engaged in interstate commerce. They further assert that the taxing ordinance in question in effect imposed two flat sum privilege taxes.

The respondents contend that the taxes here are non-discriminatory and that the regular and continuous solicitation carried on by petitioners constitutes doing business which in itself is a separable intrastate incident that supports the instant levy.

We think it is of some significance that the decision of the Court of Appeal, 112 So.2d 293, fails to include any reference to the decision of this Court in Olan Mills, Inc. v. City of Tallahassee, Fla., 100 So.2d 164, the prior decision with which the Court of Appeal's decision is allegedly in conflict.

We are in accord with the opinion of the Court of Appeal where it is stated that 'the many conflicting decisions on the subject of taxation and regulation of interstate commerce by the various political subdivisions below the level of the Federal Government have left much to be desired in the way of precise guides for state and municipal taxing authorities.' We must confess that our own prior decisions have in a measure made some contribution to the confusion. Our independent research in the instant matter has led us to the conclusion that these conflicts in our opinions should here and now be resolved. Billingham v. Thiele, Fla., 109 So.2d 763.

Article I, Section 8, Constitution of the United States, empowers the Congress '* * * to regulate Commerce with foreign Nations, and among the several States * * *.' The obvious purpose of the quoted provision was to assure the free and unimpeded transportation and exchange of goods between the states. The courts have construed the constitutional provision as one prohibiting regulation of interstate commerce by the states. Implicit in the grant of power to the Congress is the prohibition of the exercise of the same power by the states. As the provision has been interpreted over the years, it has been construed to mean that the states are precluded from imposing any undue or unreasonable burden on interstate commerce. Circular Advertising Co. v. American Mercantile Co., 66 Fla. 96, 63 So. 3. Undue burdens can arise, not only as a result of the exercise of the police power, but with equal effectiveness as a result of the exercise of the taxing power. The cases suggest that the states and their local units of government most often undertake to regulate interstate commerce by the exercise of some aspect of the taxing power.

The sum of the cases simply is that if the local tax has the effect of excluding or precluding or impeding the flow of commerce into and between the states then the tax is offensive to the quoted constitutional provision. In other words, if the particular tax is 'exclusory' of interstate commerce or the conduct of commerce between the states it cannot stand. This is so even though it might not be discriminatory in nature or aimed at interstate commerce for the benefit of intrastate commerce. The fact that such a tax is discriminatory is fatal to its enforcement. However, it can constitute an illegal burden even though non-discriminatory as between interstate and intrastate commerce if the effect on the former is exclusory or unduly burdensome.

In sustaining the fixed sum license or privilege tax the decision of the Court of Appeal collides directly with the prior decision of this Court in Olan Mills, Inc. v. City of Tallahassee, Fla., 100 So.2d 164.

In the cited case we held that a fixed sum license tax imposed upon photographers as a condition to exercising the privilege of engaging in that business was uncollectible from solicitors representing a non-resident photographer whose business constituted interstate commerce. The fact that the ordinance without discrimination assessed the tax against local photographers as well as solicitors for the non-resident concern did not save it against the contention that it was an undue burden on interstate commerce. The effect of our holding in the last Olan Mills case simply was that the city could not carve out of the interstate process the incident of solicitation as a separate and distinct aspect of the transaction upon which the tax could be imposed. We held that the solicitation constituted an inseparable link in the chain of events. The flat sum license impost was held to be a direct tax upon the privilege of engaging in interstate commerce. It had to fall.

We can detect no basic distinction between the flat sum license tax attempted to be imposed upon the solicitors in Olan Mills, Inc. v. City of Tallahassee, supra, and the flat sum license tax which Tampa attempts to impose upon the solicitors who sell Avon products. Both are flat...