Interstate Transit, Inc. v. Lindsey
| Citation | 29 S.W.2d 257,161 Tenn. 56 |
| Parties | INTERSTATE TRANSIT, Inc., v. LINDSEY, County Court Clerk. |
| Decision Date | 28 June 1930 |
| Court | Tennessee Supreme Court |
Appeal from Chancery Court, Davidson County; R. B. C. Howell, Judge.
Bill by Interstate Transit, Incorporated, against Dick Lindsey County Court Clerk. From a decree for complainant, defendant appeals.
Reversed and bill dismissed.
Lackey & Loser, of Nashville, and H. Lynne Barber, of Cincinnati Ohio, for appellant.
R. E. Maiden, of Dresden, and W. H. Eagle, of Nashville, for appellee.
This appeal calls for a construction in application of section 4, c. 89, of the Revenue Act of 1927. The bill was filed to recover privilege taxes paid to the defendant Clerk under protest by an Ohio corporation operating passenger motorbusses, known as Colonial Stages, between Cincinnati, Ohio, through Kentucky and Tennessee, via Louisville, Nashville, and Chattanooga, to Atlanta, Ga. The paragraph of the section under which collection was made is headed "Classification No. 3" and is as follows:
"Automobile Busses Operating upon the Highways of This State and Running into Other States, Not Liable under the Foregoing Provisions.
(State Privilege Tax only).
Each person, firm or corporation operating an automobile bus carrying passengers upon the highways of this State for a distance of more than ten miles per trip, and not liable for a privilege tax under the foregoing provisions, shall pay as follows:
Each bus carrying 5 passengers or less, per annum, $50.00.
Each bus carrying over 5 passengers and not more than 10 passengers, per annum, $100.00.
Each bus carrying over 10 passengers and less than 15 passengers, per annum, $200.00.
Each bus carrying 15 passengers and less than 20 passengers, per annum, $350.00.
Each bus carrying over 20 passengers and less than 30 passengers, per annum, $500.00.
Each bus carrying over 30 passengers, per annum, $750.00.
Provided, that this tax shall be in lieu of all county and municipal taxes; Provided, further, privilege taxes accruing under this heading shall go and belong exclusively to the General Funds of the State."
The corporation says that it transports interstate only; that therefore the act does not, fairly construed, embrace it; and that if construed to embrace it the tax laid would be in contravention of the commerce clause of the federal Constitution. (Article 1, § 8, Cl. 3.)
The state insists: (1) That the corporation transports both intrastate and interstate, and therefore comes within the terms of the act; and (2) that even though its business is interstate only, the act applies and the federal Constitution does not prohibit its application.
The chancellor found on the record made that the corporation was doing interstate transportation only, and that the state is precluded by the commerce clause of the federal Constitution from collection of the tax. While the proof shows some disposition on the part of employees of the corporation to wink at and make easy an evasion of the interstate policy of the corporation, through the use of tickets calling for destinations immediately over the state lines, we think the record as a whole sustains the finding of the chancellor that the rules and regulations of, and the instructions issued by the corporation, together with the from and recitals of its tickets, make out a case of interstate business only.
Conceding that the transportation is interstate, is this corporation so operating over the highways of the state liable for this tax? A common carrier transporting by bus passengers both interstate and intrastate was held liable for a tax of like nature in Gatlin v. Harrison, 155 Tenn. 560, 296 S.W. 7. This court followed the opinion of the United States Supreme Court in Clark v. Poor et al. since reported in 274 U.S. 557, 47 S.Ct. 702, 703, 71 L.Ed. 1200, in which case the transportation was interstate only. The later case of Sprout v. South Bend, 277 U.S. 170, 48 S.Ct. 502, 504, 72 L.Ed. 837, 62 A. L. R. 45, was in accord. Counsel for the corporation frankly admit that these, and other cases, clearly recognize that a fee may be lawfully exacted by the state from one doing an interstate transportation business only, but say (1) that the Revenue Act of 1927 does not by its terms apply to one transporting passengers interstate only, and (2) that an essential distinction exists between a license fee going into a special highway fund, and a privilege tax going into the general funds of the state. Counsel quote from Sprout v. South Bend, supra, as follows:
"It is true also that a state may impose even on motor vehicles engaged exclusively in interstate commerce, a reasonable charge as their fair contribution to the cost of constructing and maintaining the public highways." Citing, Hendrick v. Maryland, 235 U.S. 610, 622, 35 S.Ct. 140, 59 L.Ed. 385, and Interstate Busses Corp. v. Blodgett, 276 U.S. 245, 48 S.Ct. 230, 72 L.Ed. 551.
We think this section of our Revenue Act embraces in its terms busses transporting interstate. The caption of the pertinent paragraph reads, "Busses *** Running into Other States," and in its body it levies the tax on "each person, firm or corporation operating an automobile bus carrying passengers upon the highways of this State for a distance of more than ten miles per trip," and not liable under preceding paragraphs. A purpose is indicated by the ten-mile restriction to avoid burdening interstate transportation unreasonably, relieving from this tax in cases of incidental and inconsequential crossing of, or entry over, the state lines in the course of through travel.
We come then to this single issue: Is the power of the state to impose "a reasonable charge" upon busses making use of its highways for interstate transportation limited to a regulation or license fee under the police power, as insisted, and confined to legislation which appropriates the fund exclusively and specifically to highway purposes, either of regulation or maintenance? This insistence seems to be met by Mr. Justice Brandeis in Clark v. Poor, supra, who, after referring to the contention therein made that "all of the tax is not used for maintenance and repair of the highways," said:
The commerce clause does not restrict the power of the state to tax unless (1) the tax is discriminatory, or (2) it is unreasonably burdensome on interstate commerce. Here we have no discrimination. A like tax is levied by the different paragraphs of the pertinent section of the act on all bus operators using the roads of the state, (1) from point to point within the state, (2) from point to point within a county, and (3) from a point within to a point without the state, provided the distance is as much as ten miles.
Nor is this tax apparently unduly burdensome. Not only is the charge approximately the same on all motor vehicles...
To continue reading
Request your trial
-
Board of R. R. Com'rs v. Aero Mayflower Transit Co.
...of the Federal Constitution. The trial court allowed recovery, but its judgment was reversed by the Supreme Court of the state, 161 Tenn. 56, 29 S.W.2d 257 and the case appealed to the Supreme Court of the United States as above indicated. Justice Brandeis said: 'While a state may not lay a......