The, words duties, imposts and excises were used comprehensively
in the Constitution to cover customs and excise duties imposed on
importation, consumption, manufacture, and sale of certain
commodities, privileges, particular business transactions,
vocations, and the like. The stamp duty on sales of shares of stock
in corporations imposed by the War Revenue Act of 1898, 30 Stat.
448, falls within that category, and was not a direct tax.
George C. Thomas was indicted for violation of the internal
revenue laws of the United States in that, being a broker in the
City of New York, he sold certain shares of Atchison preferred
stock and omitted the required revenue stamps from the memorandum
of sale. He demurred to the indictment on the ground that the Act
of June 13, 1898, 30 Stat. 448, c. 448, which required the stamps
to be affixed, was unconstitutional. The demurrer was overruled,
the court, Thomas, J., delivering an opinion. 115 F. 207.
Trial was had, defendant found guilty, and judgment rendered,
sentencing him to pay a fine of five hundred dollars.
The case was then brought here on writ of error.
Page 192 U. S. 369
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
By the first clause of Section 8 of Article I of the
Constitution, Congress is empowered "to lay and collect taxes,
duties, imposts, and excises, . . . but all duties, imposts, and
excises shall be uniform throughout the United States."
This division of taxation into two classes is recognized
throughout the Constitution.
By clause 3 of section 2, representatives and direct taxes are
required to be apportioned according to the enumeration prescribed,
and by clause 4 of section 9, no capitation or other direct tax can
be laid except according to that enumeration.
By clause 1 of section 9, the migration or importation of
persons by the states was not to be prohibited prior to 1808, but a
tax or duty could be imposed on such importation, not exceeding $10
for each person.
By clause 5, it is provided: "No tax or duty shall be laid on
any articles exported from any state."
By clause 2 of section 10, no state can, "without the
Page 192 U. S. 370
consent of the Congress, lay any imposts or duties on imports or
exports, except what may be absolutely necessary for executing its
inspection laws." By clause 3, the states are forbidden, without
the consent of Congress, to "lay any duty of tonnage."
And these two classes, taxes so called, and "duties, imposts,
and excises," apparently embrace all forms of taxation contemplated
by the Constitution. As was observed in
Pollock v. Farmers'
Loan & Trust Co., 157 U. S. 429,
157 U. S.
557:
"Although there have been from time to time intimations that
there might be some tax which was not a direct tax nor included
under the words 'duties, imposts, and excises,' such a tax for more
than one hundred years of national existence has as yet remained
undiscovered notwithstanding the stress of particular circumstances
has invited thorough investigation into sources of revenue."
The present case involves a stamp tax on a memorandum or
contract of sale of a certificate of stock, which plaintiff in
error claims was unlawfully exacted because not falling within the
class of duties, imposts, and excises, and being, on the contrary,
a direct tax on property.
There is no occasion to attempt to confine the words duties,
imposts, and excises to the limits of precise definition. We think
that they were used comprehensively to cover customs and excise
duties imposed on importation, consumption, manufacture, and sale
of certain commodities, privileges, particular business
transactions, vocations, occupations, and the like.
Taxes of this sort have been repeatedly sustained by this Court,
and distinguished from direct taxes under the Constitution. As in
<|3 Dall. 171|>Hylton v. United States, 3 Dall. 171,
on the use of carriages; in
Nicol v. Ames, 173 U.
S. 509, on sales at exchanges or boards of trade; in
Knowlton v. Moore, 178 U. S. 41, on
the transmission of property from the dead to the living; in
Treat v. White, 181 U. S. 264, on
agreements to sell shares of stock denominated "calls" by New York
stockbrokers; in
Page 192 U. S. 371
Patton v. Brady, 184 U. S. 608, on
tobacco manufactured for consumption.
<|12 Wheat. 419|>Brown v. Maryland, 12 Wheat.
419, and
Fairbank v. United States, 181 U.
S. 283, are not in point. In the one, the clause of the
Constitution was considered which forbids any state, without the
consent of Congress, to "lay any imposts or duties on imports or
exports," and in the other, that "no tax or duty shall be laid on
articles exported from any state." The distinction between direct
and indirect taxes was not involved in either case.
The sale of stocks is a particular business transaction in the
exercise of the privilege afforded by the laws in respect to
corporations of disposing of property in the form of certificates.
The stamp duty is contingent on the happening of the event of sale,
and the element of absolute and unavoidable demand is lacking. As
such, it falls, as stamp taxes ordinarily do, within the second
class of the forms of taxation.
Judgment affirmed.