Royster Guano Co v. Commonwealth of Virginia, No. 165
| Court | United States Supreme Court |
| Writing for the Court | PITNEY |
| Citation | 64 L.Ed. 989,253 U.S. 412,40 S.Ct. 560 |
| Parties | F. S. ROYSTER GUANO CO. v. COMMONWEALTH OF VIRGINIA |
| Decision Date | 07 June 1920 |
| Docket Number | No. 165 |
v.
COMMONWEALTH OF VIRGINIA.
Messrs. Cadwallader J. Collins and James E. Hath, both of Norfolk, Va., for plaintiff in error.
Mr. J. D. Hank, Jr., of Richmond, Va., for the Commonwealth of Virginia.
Mr. Justice PITNEY delivered the opinion of the Court.
Plaintiff in error is a corporation created by and existing under the laws of Virginia, engaged in the business of manufacturing and selling commercial fertilizers. It operates a manufacturing plant in the county of Norfolk in that state and several plants in other states. From the operation of its plant in Virginia it made net profits during the year ending December 31, 1916, amounting in round figures to $260,000, and from the operation of its plants in other states during the same year made net profits amounting to about $270,000. Under the revenue law of
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the state (Act April 16, 1903 [Va. Acts, c. 148, p. 155], as amended by Act March 22, 1916 [Va. Acts, c. 472, p. 793]), plaintiff in error returned for taxation as income the former amount, omitting the latter. Under appropriate provisions of law the state officials added the latter amount, and assessed an income tax against plaintiff in error upon the aggregate. It petitioned the corporation court of the city of Norfolk for relief from so much of the tax as represented the $270,000, among other reasons upon the ground that, so far as chapter 472 of 1916 taxed that part of its business which was transacted outside of the limits of Virginia, the law imposed upon plaintiff in error a burden not placed upon domestic corporations doing no part of their business in Virginia but transacting business beyond the limits thereof, such corporations, by chapter 495 of 1916 (Va. Acts, p. 830), being expressly exempted from a tax on income derived from business done without the limits of the state; and hence chapter 472, as applied to the business of plaintiff in error transacted beyond the limits of the state, denied to it the equal protection of the laws, in violation of the Fourteenth Amendment. Other points were raised, but they require no mention. The corporation court having sustained the tax, plaintiff in error applied to the Supreme Court of Appeals of the state for a writ of error and supersedeas to review the judgment. That court being of opinion that the decision was right, the application was denied and an order entered in effect affirming the judgment of the corporation court; whereupon this writ of error, directed to the Supreme Court of Appeals in accordance with the practice indicated in Norfolk Turnpike Co. v. Virginia, 225 U. S. 264, 269, 32 Sup. Ct. 828, 56 L. Ed. 1082, was sued out under section 237, Judicial Code, as amended September 6, 1916 (39 Stat. 726, c. 448 [Comp. St. § 1214]).
The statute thus assailed (Va. Acts 1916, c. 472) imposes an income tax of 1 per centum upon 'the aggregate amount of income of each person or corporation,' subject
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to specified deductions and exemptions; including in income 'all profits from earnings of any partnership or business done in or out of Virginia,' and also 'all other gains and profits derived from any source whateverd.' Under this act, as applied to plaintiff in error by the state officers, whose action was sustained by the court of last resort, a tax was imposed upon the income derived from its plants without the state as well as from that within the state. At the same time, chapter 495, Acts 1916 (page 830), approved on the same day, was in force. This reads as follows:
'Whereas, certain corporations have been organized under the laws of Virginia, and it is anticipated that certain others will be organized thereunder, which do no business within this state; therefore—1. Be it enacted by the general assembly of Virginia, that no income tax nor ad valorem taxes, state or local, shall be imposed upon the stocks, bonds, investments, capital or other intangible property owned by corporations organized under the laws of this state which do no part of their business within this state; and the mere holding of stockholders' meetings in this state by such corporations required by law, shall not be construed as doing any business in this state within the meaning of this act' with further matter not necessary to be quoted.
It is not disputed that, under this act, corporations created by and existing under the laws of Virginia, and doing business in other states, but none within the state except the holding of stockholders' meetings, are exempted from the payment of any income tax.
Of course, these two statutes—chapter 472 and chapter 495 must be considered together as parts of one and the same law; and by their combined effect, if the judgment under review be affirmed, plaintiff in error will be required to pay a tax upon its income derived from business done without as well as from that done within the state, while other corporations owing existence to the same laws and simul taneously
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deriving income from business done without the state, but none from business within it, are exempt from taxation.
It is unnecessary to say that the 'equal protection of the laws' required by the Fourteenth Amendment does not prevent the states from resorting to classification for the purposes of legislation. Numerous and familiar decisions of this court establish that they have a wide range of discretion in that regard. But the classification must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the iegislation, so that all persons similarly circumstanced shall be treated alike. The latitude of discretion is notably wide in the classification of property for purposes of taxation and the granting of partial or...
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...crux of an equal protection claim is that "all persons similarly situated shall be treated alike." F.S. Royster Guanno Co. v. Virginia, 253 U.S. 412, 40 S.Ct. 560, 64 L.Ed. 989 (1920). An elementary prerequisite to equal protection analysis, however, is that there be a legislative or admini......
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...crux of an equal protection claim is that "all persons similarly situated shall be treated alike." F.S. Royster Guanno Co. v. Virginia, 253 U.S. 412, 40 S.Ct. 560, 64 L.Ed. 989 (1920). An elementary prerequisite to equal protection analysis, however, is that there be a legislative or admini......
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