A license tax on express companies for receiving and sending
packages to and from points within the state is not
unconstitutional as an attempt to tax interstate commerce when
applied to packages passing between such points by routes lying
partly through another state.
Lehigh Valley Railroad v.
Pennsylvania, 145 U. S. 192,
followed;
Hanley v. Kansas City Southern Railway,
187 U. S. 617,
distinguished.
80 Kan. 58 affirmed.
The facts, which involve the constitutionality of a license tax
on express companies, are stated in the opinion.
Page 226 U. S. 465
MR. JUSTICE DAY delivered the opinion of the Court.
Plaintiff in error was the agent of the United States Express
Company at Leavenworth, Kansas. He was convicted of violating an
ordinance of the city imposing a tax on the business of express
companies. The conviction was affirmed in 80 Kan. 58, and the case
is brought here.
Page 226 U. S. 466
Under the ordinance, a tax was imposed on the business and
occupation of express companies as follows:
"The sum of fifty dollars per year on the business and
occupation of express company, corporation or agency, in receiving
packages in this city from persons in the city, and transmitting
the same by express from this city, within this state, to persons
and places within this state, and receiving in this city packages
by express transmitted within the state from persons and places in
this state to persons within this city, and delivering the same to
persons in this city, excepting the receipt, transmission, and
delivery of any such packages to and from any department, agency,
or agent of the United States, and excepting the receipt,
transmission, and delivery of any such packages which are
interstate commerce; the business and occupation of receiving,
transmitting, and delivering of the packages herein excepted is not
taxed hereby."
The United States Express Company receives express packages at
Leavenworth and forwards them by railroad to other cities and
towns, some without the state and some within the state, and also
delivers packages which have been forwarded to Leavenworth from
like cities and towns. All such express packages are required to be
brought into or sent out of Leavenworth, which lies west of the
Missouri River in Kansas, over the Rock Island Railroad, which runs
along the Missouri side of the Missouri River, with a branch across
the river to Leavenworth. The express company has no other means of
transportation of packages in or out of Leavenworth. It therefore
follows that every package handled by the express company at
Leavenworth is brought from or carried into the State of Missouri
over this branch of the Rock Island Railroad. The actual carriage
in the State of Kansas over such branch is about one mile. The
record shows that about ten percent of the business done at
Leavenworth by the express company is between Leavenworth
Page 226 U. S. 467
and other points in Kansas, but all such business is required to
be transported in part at least, within the State of Missouri.
The contention in this case is that the tax thus imposed is a
regulation of and burden upon interstate commerce, and therefore in
violation of the federal Constitution, which vests in Congress the
sole authority to regulate commerce among the states.
It is to be observed that the ordinance excludes interstate and
government business. As the Supreme Court of Kansas says (80 Kan.
62):
"The license tax was upon so much of the company's business as
was carried on in Kansas. It had an office and local conveyances in
Leavenworth for the collection of packages in that city, and it
made contracts for transporting these packages to places within the
state. Likewise, it collected packages in other parts of the state
and carried them into Leavenworth, where they were delivered to the
consignees. Does the fact that, in carrying these packages between
points in Kansas, they pass over the soil of another state for a
short distance make the tax on that business invalid?"
We are of opinion that this case is controlled by
Lehigh
Valley Railroad v. Pennsylvania, 145 U.
S. 192, in which it was held that a state might tax the
receipts of a railroad corporation for the portion of the
transportation which was within the state, although the
transportation then in question, while between points within the
state, passed over the railroad which traversed for a part of the
way territory of an adjoining state. It was held that a tax upon
such receipts did not tax interstate commerce, and this Court said
(p.
145 U. S.
202):
"It should be remembered that the question does not arise as to
the power of any other state than the state of the termini, nor as
to taxation upon the property of the company situated elsewhere
than in Pennsylvania, nor as to the regulation by Pennsylvania of
the operations of
Page 226 U. S. 468
this or any other company elsewhere, but it is simply whether,
in the carriage of freight and passengers between two points in one
state, the mere passage over the soil of another state renders that
business foreign which is domestic. We do not think such a view can
be reasonably entertained, and are of opinion that this taxation is
not open to constitutional objection by reason of the particular
way in which Philadelphia was reached from Mauch Chunk."
The
Lehigh Valley case was cited with approval in
U.S. Express Co. v.
Minnesota, 223 U. S. 335,
223 U. S. 342,
as determinative of the proposition that the State of Minnesota
might tax the receipts of an express company from the
transportation of packages from points within the state to other
points therein, although the transportation was in part outside of
the state.
It is contended, however, that the contrary result must be
reached, applying the principles laid down in
Hanley v. Kansas
City Southern Ry. Co., 187 U. S. 617. In
that case, this Court declared unconstitutional a law of Arkansas
undertaking to fix rates upon railway transportation, the
transportation in question in that case being a single carriage
partly outside of the State of Arkansas from a point within to
another point within the state. In the particular instance, the
transportation covered 116 miles, of which only 52 miles were
within Arkansas and the rest without the state. It was held that
the right to regulate such commerce was solely in Congress under
the Constitution, and that the transportation was a single and
entire thing, and, as a subject for rate legislation, was
indivisible. The case of
Lehigh Valley Railroad v.
Pennsylvania, supra, was called to the attention of the Court,
and, of that case, this Court said (p.
145 U. S.
621):
"That was the case of a tax, and was distinguished expressly
from an attempt by a state directly to regulate the transportation
while outside its borders. 145 U.S.
Page 226 U. S. 469
145 U. S. 204. And, although
it was intimated that, for the purposes before the Court, to some
extent commerce by transportation might have its character fixed by
the relation between the two ends of the transit, the intimation
was carefully confined to those purposes. Moreover, the tax 'was
determined in respect of receipts for the proportion of the
transportation within the state.' 145 U.S.
145 U. S.
201. Such a proportioned tax had been sustained in the
case of commerce admitted to be interstate.
Maine v. Grand
Trunk Railway Co., 142 U. S. 217. Whereas it is
decided, as we have said, that, when a rate is established, it must
be established as a whole."
The distinction is applicable here. There is no attempt to fix a
rate by the authority of the state, which, while single and
complete in itself, covers for a considerable part interstate
transportation. The privilege tax levied in this case expressly
excludes commerce of an interstate character or business done for
the government, and is levied solely on the business done in the
City of Leavenworth in receiving packages from points within the
state and in transporting packages to like points. Applying the
principles of the
Lehigh Valley case to such a situation,
we are of opinion that, for the purpose of a privilege tax for
business thus done, the municipality, acting under authority of the
state, did not exceed its just power.
Judgment affirmed.