National Paper Type Co v. Bowers

• Decision Date: 15 December 1924
• Docket Number: No. 320,320
• Citation: 266 U.S. 373,45 S.Ct. 133,69 L.Ed. 331
• Parties: NATIONAL PAPER & TYPE CO. v. BOWERS, Collector of Internal Revenue for Second District of New York
• Court: U.S. Supreme Court

266 U.S. 373

45 S.Ct. 133

69 L.Ed. 331

NATIONAL PAPER & TYPE CO.

v BOWERS, Collector of Internal Revenue for Second District of New York.

No. 320.

Argued Nov. 24, 1924.

Decided Dec. 15, 1924.

Messrs. Porter J. McCumber, of Washington, D. C., and Franklin Grady, of New York City, for plaintiff in error.

Mr. James M. Beck, Sol. Gen., of Washington, D. C., for defendant in error.

Mr. Justice McKENNA delivered the opinion of the Court.

The case displayed by the amended complaint, omitting verbal circumlocutions, is as follows:

Plaintiff (plaintiff in error here) is, and was at all of the times mentioned, a corporation organized and existing under the laws of New Jersey. It is engaged in New York in the business of exporting, which is defined to be the purchase of personal property within the United States, and the sale thereof without the United States, and has under the Revenue Act of 1921 (42 Stat. 227) been required to pay an income tax on its net income, part of which is derived from such foreign business.

At the same time and times there were foreign corporations engaged in like business of buying personal property within the United States and exporting and selling it without the United States. Under sections 217 and 233 of the Revenue Act of 1921 (Comp. St. Ann. Supp. 1923, §§ 6336 1/8 hh, 6336 1/8 p) these corporations were wholly exempted from payment of the tax on the net income or profits accruing or derived from such business.

On the 15th of March, 1922, the defendant (defendant in error here), being Collector of Internal Revenue, and acting as such, in pursuance of Sections 205 and 230 of the Revenue Act of 1921 (Comp. St. Ann. Supp. 1923, §§ 6336 1/8 d, 6336 1/8 nn) demanded of plaintiff the sum of $4,203.91, as due and payable from the plaintiff as one-fourth part of its income tax for the fiscal year ending March 31, 1921, that is, for the months of January, February, and March, 1921, and threatened to enforce payment of that sum together with penalties and interest thereon provided for by the laws of Congress.

Plaintiff, on the 15th of March, 1922, solely to prevent distraint and sale of its property, and protesting that no tax was due, and that defendant was without authority to exact or collect the same or any part thereof, paid the tax.

On or about the 6th of December, 1922, plaintiff, in accordance with law, made a claim in writing to the Commissioner of Internal Revenue and demanded the repayment of the tax on the ground that it was illegally assessed, that more than six months had expired since the filing of the claim for refund as provided for by section 1318 of the Revenue Act (Comp. St. Ann. Supp. 1923, §§ 5949, 5949a), and that no part of the claim had been remitted or repaid to plaintiff, or to any one, for its account. This action was then brought against the collector.

Judgment was prayed for $3,999.08, the amount of the tax.

Motion was made by the district attorney to dismiss the amended complaint on the ground that it did not state facts sufficient to constitute a cause of action.

The motion was granted on the authority of and upon the reasoning of National Paper & Type Co. v. Edwards, Collector of Internal Revenue (D. C.) 292 Fed. 633. Judgment was formally entered dismissing the complaint upon the merits.

To review this action and judgment, this writ of error is directed. The difference in treatment of domestic and foreign corporations in respect to business of sales in foreign countries, it is contended, is a 'hostile discrimination and confiscation of property.'

To sustain the charge, plaintiff asserts that its business and that of foreign corporations is done under exactly the same circumstances and...