Gates v. Greenville Bridge & Ferry Company

• Decision Date: 30 March 1931
• Docket Number: 221
• Citation: 36 S.W.2d 970,183 Ark. 529
• Parties: GATES v. GREENVILLE BRIDGE & FERRY COMPANY
• Court: Arkansas Supreme Court

36 S.W.2d 970

183 Ark. 529

GATES v. GREENVILLE BRIDGE & FERRY COMPANY

No. 221

Supreme Court of Arkansas

March 30, 1931

Appeal from Chicot Chancery court; E. G. Hammock, Chancellor affirmed.

Decree affirmed.

David A. Gates, Hal L. Norwood, Attorney General, and Walter L Pope, Assistant, for appellant.

Wynn & Hafter, E. P. Toney and N. B. Scott, for appellee.

OPINION

MEHAFFY, J.

David A. Gates, Commissioner of Revenues, issued an order under the provisions of act 181 of the Acts of 1929 directed to the sheriff of Chicot County commanding him to levy upon and sell the property of the Greenville Bridge & Ferry Company or so much thereof as may be necessary for the payment of tax penalty, cost, etc.

Section 6 of the act under which the order was issued contains the following provision: "Every person, firm or corporation who shall operate a privately owned toll bridge or ferry in this State shall pay for the privilege of operating the same, in addition to all taxes now levied, a State license tax of four per centum of the gross amount of all fares and charges collected by said bridge or ferry, which said privilege tax shall be paid quarterly."

The appellee, the Greenville Bridge & Ferry Company, filed its complaint in the Chicot Chancery Court against David A. Gates, Commissioner of Revenues of Arkansas, and Calmes Merritt, sheriff of Chicot County, Arkansas, praying for an order enjoining and restraining the appellants from levying on appellee's property and for the cancellation of the writ or orders issued by the Commissioner of Revenues.

David A. Gates, the commissioner, filed answer alleging that the orders issued by him were under and by virtue of act 181 of the Acts of 1929, and that the order was directed to the sheriff of Chicot County directing him to levy upon and sell the property of appellee or so much as might be necessary for the payment of a tax due the State of Arkansas with penalty added in the sum of $ 3,906.

The following statement was filed, and no other evidence was introduced: "It is agreed by and between the parties to this cause that the plaintiff is a corporation chartered under the laws of the State of Delaware operating a ferry boat for the transportation of vehicles and passengers across the Mississippi River from Greenville, Mississippi, to a point on the Arkansas shore; that the corporation is engaged exclusively in interstate commerce, and its boats are registered at the port of registry, Baton Rouge, Louisiana; that the situs of all its property is in Mississippi about four miles south of Greenville; that it has no property in Arkansas except a landing dock and property for the facilities of landing, that its boats only stop on the Arkansas side to load and unload passengers and vehicles; that the corporation has never paid taxes in Arkansas, and that Mrs. Kate C. Archer, the lessor of the plaintiff, has paid taxes on the land.

"It is further agreed that the gross proceeds of the corporation from April 23, 1929, to June 1, 1930, from tolls collected from passengers and vehicles crossing from both sides of the river is $ 65,100; that 50 per cent. of the tolls originate from States other than Mississippi and Arkansas; that approximately $ 32,750 originates in the State of Mississippi and in the State of Arkansas; that of the $ 32,750, one-half thereof originates in the State of Arkansas; that the embarkation of automobiles including cars from all States which cross the river is about one-half on the Mississippi side and one-half on the Arkansas side.

"It is further agreed by the parties of this action that the Greenville Bridge & Ferry Company has not made the quarterly reports which are required of ferries by act number 181 of the Acts of Arkansas for the year 1929; that it had not paid the tax prescribed by said act. It is further agreed that none of the boats of the plaintiff are registered or located in any part of Arkansas.

"It is further agreed that an agent of the Commissioner of Revenues for the State of Arkansas has made a demand upon the plaintiff company for its records of tolls collected by said ferry during the period of April 23, 1929, to June 1, 1930, and that said demand was made upon Mr. J. S. Hafter, who is an officer of the company, being secretary, at his office in the city of Greenville, Mississippi; that the verbal demand so made was refused, which demand was made by C. M. Matthews. The demand was made in Greenville, Mississippi.

"It is further agreed that the Greenville Bridge & Ferry Company has not qualified under the laws of the State of Arkansas as a nonresident corporation and has no agent in the State of Arkansas upon whom service can be had."

The court issued an order enjoining the defendants from levying upon the property of appellees for the tax claimed in the it and held that the tax of four per cent. provided in act 181 as applicable to appellee is a tax and a burden upon interstate commerce, and that the act was intended only as a tax on intrastate business.

The only question for us to determine is whether the tax provided for in act 181 is a tax or burden on interstate commerce, that is whether as applied to appellee it violates the Constitution of the United States.

The State has authority to tax foreign corporations for the right or privilege of doing business in the State, although the tax may incidently or remotely affect interstate commerce. Ark. & Memphis Ry. Bridge & Terminal Co. v. State ex rel. Atty. Genl., 174 Ark. 420, 295 S.W. 378.

As stated by the Supreme Court of the United States: "The turning point in these decisions is whether in its incidence the tax affects interstate commerce so directly and immediately as to amount to a genuine and substantial regulation of or restraint upon it, or whether it...