Burke v. Wells,
208 U.S. 14 (1908)

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U.S. Supreme Court

Burke v. Wells, 208 U.S. 14 (1908)

Burke v. Wells

No. 3

Argued November 5, 6, 1907

Decided January 6, 1908

208 U.S. 14


While the state may not directly tax imported goods or the right to sell them, or impose license fees upon importers for the privilege of selling, so long as the goods remain in the original packages and are unincorporated into the general property, Brown v. Maryland, 12 Wheat. 419, when the article has lost its distinctive character as an import and been mingled with other property, it becomes subject to the taxing power of the state. May v. New Orleans, 178 U. S. 496.

When a foreign manufacturer establishes a permanent place of business in this country for the sale of imported articles, although the bulk of the proceeds may be sent abroad, such proceeds as are retained here as cash in bank and notes receivable, and are used in connection with the business, lose the distinctive character which protects them under the federal Constitution and become capital invested in business in the state and carried on under it protection, and are subject to taxation by the laws of that state.

Whether this rule applies to open accounts for goods sold not decided, the state court not having passed on that question.

184 N.Y. 275 affirmed.

This is a writ of error to the Supreme Court of the State of New York to review the judgment rendered upon a remittitur from the Court of Appeals of the same state wherein an assessment of taxes against the plaintiff in error, imposed by the Board of Taxes and Assessments of the City of New York, who are the defendants in error, was affirmed. The taxes were for the year 1903, and were imposed under the statutes of the State of New York taxing nonresidents of the state doing business in the state on the capital invested in such business, as personal property at the place where such business is carried on, to the same extent as if they were residents of the state. N.Y. General Tax Law, c. 908, Laws of 1896, § 7.

The respondents, in the return to the writ of certiorari issued

Page 208 U. S. 15

by the Supreme Court of New York, stated that the method by which the assessment for the year 1903 was arrived at was as follows:

"On the statement submitted to us (schedule A), it appeared that the relator was a corporation organized under the laws of the Kingdom of Great Britain and Ireland, that it had procured a certificate authorizing it to do business in this state, that the business of the corporation proposed to be carried on within this state, stated in its application under the provisions of chapter 687 of the Laws of 1892, was importers, that the place within the state named in said application as its principal place of business was 409 West Fourteenth Street, that the company transacted business within this state at No. 409 West Fourteenth Street, in the City of New York, Borough of Manhattan, and that the company was assessed by the State Comptroller for $124,000."

"It further appeared that the relator kept a wareroom and offices in the Borough of Manhattan to which it sent its products from Ireland in unbroken original packages to be sold; that on all these goods it paid duties to the United States; that the proceeds of the goods were at once remitted to the main office in Dublin, after reserving the necessary amount for paying the expenses of the business conducted in the City of New York; that the value of the goods on hand, as shown in the statement, was about the average amount of the goods usually kept here for sale, that the greater part of the cash on hand and in bank was in process of transmission to the main office; that the bank account was, to a very large extent, kept to cover the payment of duties on the goods shipped here for sale; and that the entire amount of bills receivable resulted from the sales of imported goods in unbroken original packages, as did the cash on hand and in bank."

The amount receivable on notes and open accounts

was stated to be . . . . . . . . . . . . . . . . . . $111,751.53

The value of goods, wares, and merchandise in

this state . . . . . . . . . . . . . . . . . . . . . 45,841.21

Page 208 U. S. 16

The value of safes, fixtures, and furniture in

this state . . . . . . . . . . . . . . . . . . . . . 797.68

Cash on hand and in bank . . . . . . . . . . . . . . . 6,122.63

Cost price of imported goods on hand in unbroken

original packages. . . . . . . . . . . . . . . . . . 45,841.21

Amount of bills and accounts payable incurred for

items included in the sales and assets enumerated. . 24,053.91

"It was admitted that the amount invested in business in this state was $797.68, which was the value of the relator's safes, fixtures, and furniture in this state."

"From all this evidence we determined that the relator had, on the second Monday of January, 1903, established and was conducting a permanent and continuous business in this state."

"We further determined that the amount receivable on notes and open accounts, and the cash on hand and in bank, constituted capital of the relator invested in its business in this state, and that such items were properly assessable by us. We accordingly fixed the assessment against the relator for the year 1903 for capital invested in business in this state at the sum of $94,600, which amount was approximately the aggregate value of the amount receivable on notes and open accounts, the safes, fixtures, and furniture in this state, and the cash on hand and in bank, less the amount of bills and accounts payable incurred for the items included in the sales and assets enumerated in said statement"

The assessment was confirmed when brought for review upon certiorari before the New York supreme court, which judgment was affirmed in the appellate division, and the latter judgment was affirmed by the Court of Appeals (184 N.Y. 275), from which judgment, upon remittitur, the judgment was rendered in the supreme court, to which this writ of error is prosecuted.

Page 208 U. S. 19

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