Department of Treasury of the State of Indiana v. Mfg Co of Indiana

• Citation: 61 S.Ct. 866,85 L.Ed. 1313,313 U.S. 252
• Decision Date: 05 May 1941
• Docket Number: No. 655,INGRAM-RICHARDSON,655
• Parties: DEPARTMENT OF TREASURY OF THE STATE OF INDIANA et al. v. MFG. CO. OF INDIANA Inc
• Court: United States Supreme Court

313 U.S. 252

61 S.Ct. 866

85 L.Ed. 1313

DEPARTMENT OF TREASURY OF THE STATE OF INDIANA et al.

v INGRAM-RICHARDSON MFG. CO. OF INDIANA Inc.

No. 655.

Argued April 1, 1941.

Decided May 5, 1941.

Rehearing Denied June 2, 1941.

See 313 U.S. 600, 61 S.Ct. 1107, 85 L.Ed. —-.

Messrs. Joseph P. McNamara and Joseph W. Hutchinson, both of Indianapolis, Ind., for petitioners.

Mr. Earl B. Barnes, of Indianapolis, Ind., for respondent.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

The Circuit Court of Appeals, affirming the District Court, has held that respondent, Ingram-Richardson Manufacturing Company, is entitled to a refund f a tax levied under the Indiana Gross Income Tax Law,¹ upon the ground of the invalidity of the tax under the commerce clause of the Federal Constitution, article 1, § 8, cl. 3. 7 Cir., 114 F.2d 889. We granted certiorari because of an alleged conflict with applicable decisions of this Court, February 3, 1941, 312 U.S. 671, 61 S.Ct. 613, 85 L.Ed. —-.

The tax was for $5,410.20² and was laid upon respondent's gross receipts derived as follows:

Respondent, an Indiana corporation, has a factory at Frankfort in that State where it manufactures enamel, both in a granular form, known as frit, and in a hard, finished form fused with metal articles. In the instant case the enamel was fused with metal parts used in stoves and refrigerators manufactured by respondent's customers in various States other than Indiana. Respondent's traveling salesmen solicited orders from such customers pursuant to which respondent transported by its trucks the stove and refrigerator parts belonging to its customers from their plants to its own plant for enameling. There the enameling was done by the process set forth in the findings, and respondent then hauled the enameled parts back to its customers' factories. Respondent thereafter billed its customers for the enameling and remittances were made to respondent by mail. The value of the metal parts as units after the completion of the enameling process was from two and one-half to three times the value of the respective parts before the enameling.

Respondent's contention, as set forth in its complaint and as still asserted, is that these transactions constituted sales of the hard, finished enamel in interstate commerce. The Circuit Court of Appeals disagreed with that contention and held that the income in question was derived from services. We are in accord with that view.

In the alternative, respondent contends that the services paid for included the solicitation of orders by respondent's agents and the execution of contracts in other States, interstate communications by mail, telephone and telegraph, and also the transportation by respondent of the stove and refrigerator parts from and to places in other States.

The enameling process was an activity performed at respondent's plant in Indiana and the gross receipts therefrom were taxable by Indiana under its Gross Income Tax Law. See Department of Treasury of Indiana v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. —-. The fact that the orders for the enameling were obtained by respondent's agents and contracts were executed outside Indiana did not make the enameling process other than an intrastate activity and any the less a proper subject for the application of the taxing statute. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 253, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944.

But the court below has held that there was included in the service rendered by respondent the transportation by its trucks of the stove and refrigerator parts from and to the customers' plants in other States. The court thought that the reasoning of our opinion in Gwin, White & Prince v. Henneford, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272, applied....