McGoldrick v. Berwind-White Coal Mining Co. - 309 U.S. 33 (1940)
U.S. Supreme Court
McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33 (1940)
McGoldrick v. Berwind-White Coal Mining Co.
Argued January 2, 1940
Decided January 29, 1940
309 U.S. 33
1. By contracts of sale made, through a sales office in the City of New York, with public utility and steamship companies in that city, a Pennsylvania corporation agreed to sell and deliver to them large quantities of coal of specified grades (said to possess unique qualities) produced at its Pennsylvania mines. The coal moved by rail to Jersey City and thence by barge to the City of New York, and was there delivered to the purchasers' plants or steamships. Held, that the imposition of a tax by New York City on the purchasers of the coal, measured by the sales price, and the requirement that the tax be collected by the seller, do not infringe the commerce clause of the Federal Constitution. Pp. 309 U. S. 42 et seq.
The tax is 2% of the receipts upon every sale, for consumption, of tangible personal property in the city, "sale" being defined as "any transfer of title or possession or both . . . in any manner or by any means whatsoever for a consideration or any agreement therefor." The tax is upon the buyer, the seller being liable only if he fails to collect and pay over. It is conditioned upon transfer of title or possession or an agreement therefor, consummated in the State.
2. Considering the necessity of reconciling the competing constitutional demands, that commerce between the States shall not be unduly impeded by state action, and that the power to lay taxes for the support of state government shall not be unduly curtailed, the Court finds no adequate ground for saying that this tax is a regulation which, in the absence of Congressional action, the commerce clause forbids. P. 309 U. S. 49.
3. The tax as here applied is not open to the objections that it is aimed at or discriminates against interstate commerce, or that it is laid upon the privilege of interstate commerce, or that it is a tax upon interstate transportation or its gross earnings, or upon merchandise in the course of an interstate journey. P. 309 U. S. 48.
The only relation of the tax to interstate commerce arises from the fact that, immediately preceding transfer of possession to the purchaser within the State, the merchandise has been transported
in interstate commerce. In its effect upon interstate commerce it does not differ from taxes on the "use" of property which has just been moved in interstate commerce, or on storage or withdrawal for use, or a property tax on goods after arrival.
4. There is no valid distinction in this relationship between a tax on property -- the sum of all the rights and powers incident to ownership -- and a tax on the exercise of some of its constituent elements. P. 309 U. S. 52.
5. The burden and effect of the tax are no greater when the purchase order or contract precedes, than when it follows, the interstate shipment. P. 309 U. S. 54.
6. Robbins v. Shelby County Taxing District, 120 U. S. 489, has been narrowly limited to fixed-sum license taxes imposed only on the business of soliciting orders for the purchase of goods to be shipped interstate. P. 309 U. S. 57.
7. The tax, being conditioned upon a local activity -- delivery of goods within the State upon their purchase for consumption -- is not subject to the objection applicable to a tax on gross receipts from interstate commerce, which exacts.tribute for the commerce carried on both within and without the State. Adams Manufacturing Co. v. Storen, 304 U. S. 307, distinguished. P. 309 U. S. 57.
8. The question whether the taxing statute is intended to apply where contracts for purchase made in New York City call for delivery outside of the State is a question for the state court. P. 309 U. S. 58.
281 N.Y. 610, 670; 22 N.E.2d 173, 764, reversed.
Certiorari, 308 U.S. 546, to review the affirmance of a judgment sustaining a sales tax assessed by the Comptroller of the City of New York.