Philadelphia & Southern S.S. Co. v. Pennsylvania, 122 U.S. 326 (1887)
U.S. Supreme CourtPhiladelphia & Southern S.S. Co. v. Pennsylvania, 122 U.S. 326 (1887)
Philadelphia and Southern Steamship Company v. Pennsylvania
Argued April 7, 1887
Decided May 27, 1887
122 U.S. 326
A state tax upon the gross receipts of a steamship company incorporated under its laws which are derived from the transportation of persons and property by sea between different states and to and from foreign countries is a regulation of interstate and foreign commerce in conflict with the exclusive powers of Congress under the Constitution.
State Tax on Railway Gross Receipts, 15 Wall. 284, considered and questioned.
The question in this case was whether a state can constitutionally impose upon a steamship company incorporated under its laws a tax upon the gross receipts of such company derived from the transportation of persons and property by sea between different states and to and from foreign countries.
By an Act of the Legislature of Pennsylvania passed March 20, 1877, it was, amongst other things, enacted as follows, to wit:
"That every railroad company, canal company, steamboat company, slackwater navigation company, transportation company, street passenger railway company, and every other company now or hereafter incorporated by or under any law of this commonwealth, or now or hereafter incorporated by any
other state and doing business in this commonwealth, and every express company, and any palace car and sleeping car company, incorporated or unincorporated, doing business in this commonwealth, shall pay to the state treasurer, for the use of the commonwealth, a tax of eight-tenths of one percent upon the gross receipts of said company for tolls and transportation, telegraph business, or express business."
A similar act was passed by the same legislature on the 7th of June, 1879.
By the terms of these acts, returns of the gross receipts are required to be made every six months to the Auditor General, upon which the tax is assessed by him and charged against the company.
Under and by virtue of these acts, the Auditor General of the state, in October, 1882, charged the appellant, the Philadelphia and Southern Mail Steamship Company, taxes upon its gross receipts for the years 1877, 1878, 1879, 1880, and 1881, all of which receipts were derived from freight and passage money between the ports of Philadelphia and Savannah, and in foreign trade from New Orleans, and a small amount for charter parties in the like trade. The tax thus charged against the company for the five years in question amounted to about $6,500, and, with accumulated interest and penalties, to over $9,000. After serving the account upon the company, an action was brought for its recovery in the Common Pleas of Dauphin County at Harrisburg. The defendant pleaded that it was a steamship company
"operating seagoing steamships engaged in the business of ocean transportation between different states of the United States and between the United States and foreign countries, and that all the said steamships of the said defendant were duly enrolled or registered under
the laws of the United States for the coasting or foreign trade of the United States, and that the gross receipts so returned to the Auditor General, upon which a tax has been levied by the Commonwealth of Pennsylvania, were received by defendants for freight and passengers carried in the said steamships on the ocean, and on the navigable waters of the United States, between the State of Pennsylvania and other states of the United States, and between the states of the United States and foreign countries, and for the charter and hire of the said steamships to other parties in such trade and business, and that no part of the said gross receipts was received for the transportation of freight and passengers between places within the State of Pennsylvania or for the hire and use of the said steamships within the State of Pennsylvania."
On the trial of the cause, the parties entered into an agreement as to the facts showing the gross receipts for each year in each branch of the company's trade, which facts supported the allegations of the plea. A trial by jury was dispensed with, and the court gave judgment for the commonwealth for the principal of the tax and interest from the time of commencing suit. Exceptions were taken on the ground that the judgment was in conflict with the clause of the Constitution of the United States giving to Congress the power to regulate commerce with foreign nations and among the several states. The judgment, being removed by writ of error to the Supreme Court of Pennsylvania, was affirmed by that court, and its judgment is now before us for review.