Hump Hairpin Mfg Co v. Emmerson, 139
| Decision Date | 27 March 1922 |
| Docket Number | No. 139,139 |
| Citation | 66 L.Ed. 622,258 U.S. 290,42 S.Ct. 305 |
| Parties | HUMP HAIRPIN MFG. CO. v. EMMERSON, Secretary of State of Illinois |
| Court | U.S. Supreme Court |
Mr. Colin C. H. Eyffe, of Chicago, Ill., for plaintiff in error.
Mr. Clarence N. Boord, of Springfield, Ill., for defendant in error.
In 1918 the defendant in error, as Secretary of State, assessed a tax of $6,045 upon the plaintiff in error, a corporation organized under the laws of West Virginia, for the privilege of doing business in the state of Illinois. The tax was paid under protest and this suit was instituted to recover the amount of it, based upon the contention that the statute under which it was imposed offends against the federal Constitution for various reasons; the only one argued in this court, however, being that, if given effect, it will constitute a regulation of, and impose a direct burden upon, interstate commerce.
The case was tried on stipulated facts, from which we derive these as essential to a disposition of it:
In 1918 the authorized capital stock of the company was $6,000,000, of which $5,500,000 was reported by the company to the state as paid in and issued. It was a manufacturing corporation, with all of its tangible property in Illinois. Its method of doing business was to send salesmen into Illinois and the various other states to solicit orders, which, however, were not accepted until approved at the Chicago office, after which they were filled from stocks maintained in that city. The company represented the potential value of its patent rights, licenses, trade-marks, secret processes and good will as $5,124,126.72, and the total value of its real and personal property as $416,629.27—making a total in Illinois of $5,540,755.79. It also represented the total sales made by it in 1917, on which year's business the tax was computed, as $263,334.96, and of these $25,814 were made to residents of Illinois.
The statute under which the tax was assessed reads:
'It shall be the duty of the Secretary of State to propound interrogatories from time to time to officers of such foreign corporations [with negligible exceptions] doing business in this state to ascertain the proportion of capital stock actually being represented by property located and business transacted in the state of Illinois, which proportion shall be determined by averaging the percentage of the total business of the corporation transacted in Illinois with the percentage of the total tangible property located in this state.' Hurd's Statutes 1917, p. 719, § 67fb.
In a recent case, American Can Co. v. Emmerson, 288 Ill. 289, 123 N. E. 581, the Supreme Court of Illinois held that it has been the policy of that state since 1872 to accord precisely equal treatment to domestic and foreign corporations of like character (Hurd's Statutes 1917, p. 703, § 26), and that the fees for transacting business in the state are computed on the amount of the authorized capital stock of domestic corporations and, at the same rate, on the amount of the capital stock of foreign corporations actually 'represented by property located and business transacted' in the state, as determined by the Secretary of State under the statute. The basis for the computation was $50 for the first $5,000, and $1 upon each $1,000 over that amount.
Acting under these statutes, the Secretary of State concluded that, under the facts as we have stated them, all of the business of the company was 'transacted' in the state of Illinois, and, all of the tangible property of the company being in the state, he computed the tax on the entire authorized capital stock. The state Supreme Court sustained the assessment as valid.
The contention of the plaintiff in error in this court is that, notwithstanding the manner in which it was done, the business which the company did with residents of states other than Illinois was interstate business, and that the treating of the amount of it as a part of the business of the company transacted in that state, in determining the percentage of the total business of the corporation transacted therein, renders the act under which the computation was made unconstitutional and void for the reason that the tax assessed is a burden upon interstate commerce.
Plainly this contention cannot be sustained. The statute and the state Supreme Court both show a candid purpose to differentiate state from interstate business and to use only the former in determining the amount of the disputed tax. If the Secretary of State or the court, in computing the tax, erroneously treated as intrastate that which was really interstate business, such error would be reason in a proper case for correcting the computation, but would not justify declaring the act unconstitutional. The facts, that all of the property of the company was located in...
To continue reading
Request your trial
-
State Tax Commission v. John H. Breck, Inc.
...taxpayer's 'profits may have been derived in part, or indeed mainly, from interstate commerce.' In Hump Hairpin Manuf. Co. v. Emmerson, 258 U.S. 290, 292-296, 42 S.Ct. 305, 306, 66 L.Ed. 622, the court sustained a capital stock tax computed on the basis of 'the proportion of capital stock *......
-
Martin Ship Service Co. v. City of Los Angeles
...a proportion of property in the taxing state that was computed by using interstate commerce as an element, Hump Hairpin Co. v. Emmerson, 258 U.S. 290, 42 S.Ct. 305, 66 L.Ed. 622; Western Cartridge Co. v. Emmerson, 281 U.S. 511, 50 S.Ct. 383, 75 L.Ed. 1004; an excise on intrastate manufactur......
-
Nitrate Sales Corporation v. State of Alabama
...necessary for sales in broken lots. In principle the situation would then be governed by the ruling in Hump Hairpin Co. v. Emmerson, 258 U.S. 290, 42 S.Ct. 305, 66 L.Ed. 622, and Western Cartridge Co. v. Emmerson, 281 U.S. 511, 50 S.Ct. 383, 74 L.Ed. 1004, where an apportionment very simila......
- Olegario v. U.S.