Where a manufacturer of goods habitually causes them to be
carried on his vehicles from the manufacture to various
establishments of retail dealers who are his customers in an
adjoining state, and there sold and delivered to such dealers in
the original packages in such quantities as they may desire to
purchase at the times of such visits, the business, as thus
transacted with them, is that of an itinerant vender or peddler,
and may be taxed in the second state under a nondiscriminating
license tax law without imposing a direct burden on interstate
commerce. P. 251 U. S.
A state tax which in substance and effect is constitutional
cannot be made otherwise by the name it bears in the state laws and
decisions. P. 251 U. S.
177 Ky. 385 affirmed.
The case is stated in the opinion.
Page 251 U. S. 98
MR. JUSTICE PITNEY delivered the opinion of the Court.
This was an action brought by plaintiffs in error in a state
court of Kentucky against the City of Covington, a
Page 251 U. S. 99
municipal corporation of that state, to recover license fees
theretofore paid by them under certain ordinances of the city for
the conduct of their business in Covington, and to enjoin the
enforcement against them of a later ordinance calling for further
like payments. The several ordinances, each in its turn, required
all persons carrying on certain specified businesses in the city to
take out licenses and pay license fees -- among others, the
business of wholesale dealer in what are known as "soft drinks."
Plaintiffs were and are manufacturers of such drinks, having their
factory and bottling works in the City of Cincinnati, in the State
of Ohio, on the opposite side of the Ohio River from Covington.
They have carried on and do carry on the business of selling in
Covington soft drinks, the product of their manufacture, in the
following manner: they have a list of retail dealers in Covington
to whom they have been and are in the habit of making sales. Two or
three times a week, a wagon or other vehicle owned by plaintiffs is
loaded at the factory in Cincinnati and sent across the river to
Covington, and calls upon the retail dealers mentioned, many of
whom have been for years on plaintiffs' list and have purchased
their goods under a general understanding that plaintiffs' vehicle
would call occasionally and furnish them with such soft drinks as
they might need or desire to purchase from plaintiffs. When a
customer's place of business is reached by the vehicle, the driver
goes into the storeroom and either asks or looks to see what amount
of drinks is needed or wanted. He then goes out to the vehicle and
brings from it the necessary quantity, which he carries into the
store and delivers to the customer. Upon his trips to Covington, he
always carries sufficient drinks to meet the probable demands of
the customers, based on past experience, but, with the exception of
occasional small amounts carried for delivery in response to
particular orders previously received at plaintiff's place of
business in Cincinnati, all
Page 251 U. S. 100
sales in Covington are made from the vehicle by the driver in
the manner mentioned. Sometimes the driver succeeds in selling
there the entire supply thus carried upon the wagon, sometimes only
a part thereof, or he may return after having made but a few sales,
or none at all, in which event he carries the unsold supply back to
plaintiffs' place of business in Cincinnati. The soft drinks in
question are delivered in stopped bottles or siphons, according to
their nature, and these are placed (at the bottling works) in
separate wooden or metal cases, each case being open at the top and
holding a certain number of bottles or siphons, according to the
nature of the drinks and the custom of the trade. The filled
bottles or siphons are carried upon the vehicle, sold, and
delivered in these cases, each case remaining entire and unbroken,
and nothing less than a case being sold or delivered. The retail
dealers usually pay cash, and purchase only the contents of the
bottles, while the bottles and cases remain the property of
plaintiffs and are subsequently collected, when empty, by
plaintiffs' drivers or agents on their regular visits. There are,
however, a few customers who pay for and thereafter own the bottles
in which distilled water is delivered. The ordinances were and are
respectively applicable to all wholesale dealers in such soft
drinks in Covington, whether the goods were or are manufactured
within or without the state.
The trial court, and on appeal, the Court of Appeals of
Kentucky, gave judgment for defendant, overruling the contention of
plaintiffs that the ordinances as carried into effect against them
were repugnant to the "commerce clause" (Art. I, § 8) of the
Constitution of the United States, 177 Ky. 385, and upon this
federal question the case is brought here by writ of error.
It is important to observe the precise point that we have to
determine. It is indisputable that, with respect to the goods
occasionally carried upon plaintiff's wagon from one
Page 251 U. S. 101
state to the other in response to orders previously received at
their place of business in Cincinnati, plaintiffs are engaged in
interstate commerce, not subject to the licensing power of the
Kentucky municipality. The Court of Appeals in the present case, in
line with its previous decisions in City of Newport v.
168 Ky. 641, 646, and City of Newport v. French
Brothers Bauer Co.,
169 Ky. 174, recognizing the authority of
the decisions of this Court bearing upon the subject, conceded that
this part of plaintiffs' business was not subject to state
regulation. 177 Ky. 388. At the same time, the court held that,
with respect to the remaining and principal part of the business
conducted in Covington, that which consists in carrying a supply of
goods from place to place upon wagons, exposing them for sale,
soliciting and negotiating sales, and immediately delivering the
goods sold, plaintiffs were subject to the licensing ordinances,
and it is with this alone that we have to deal. If, with respect to
this portion of their business, plaintiffs may be subjected to the
regulatory power of the state acting through the municipality, we
are not concerned with the question whether the general language of
the ordinances, if applied with respect to some other method of
dealing with goods brought from state to state, might be repugnant
to the federal Constitution.
From the facts recited, it is evident that, in essence, that
part of plaintiffs' business which is subjected to regulation is
the business of itinerant vender or peddler -- a traveling from
place to place within the state, selling goods that are carried
about with the seller for the purpose. Plaintiffs in error insist
that this view of the matter is untenable because the courts of
Kentucky have held that sales made to a retail merchant for resale
do not constitute peddling within the meaning of the statutes of
that state. Standard Oil Co. v. Commonwealth,
107 Ky. 606,
609; City of Newport v. French Brothers Bauer Co.,
Page 251 U. S. 102
Ky. 174, 185. These decisions, however, deal merely with a
question of statutory definition, and it hardly is necessary to
repeat that, when this Court is called upon to test a state tax by
the provisions of the Constitution of the United States, our
decision must depend not upon the form of the taxing scheme, or any
characterization of it adopted by the courts of the state, but
rather upon the practical operation and effect of the tax as
applied and enforced. The state court could not render valid, by
misdescribing it, a tax law which in substance and effect was
repugnant to the federal Constitution; neither can it render
unconstitutional a tax that in its actual effect violates no
constitutional provision by inaccurately defining it. St. Louis
Southwestern Ry. v. Arkansas, 235 U.
, 235 U. S.
We have, then, a state tax upon the business of an itinerant
vender of goods as carried on within the state, a tax applicable
alike to all such dealers, irrespective of where their goods are
manufactured, and without discrimination against goods manufactured
in other states. It is settled by repeated decisions of this Court
that a license regulation or tax of this nature, imposed by a state
with respect to the making of such sales of goods within its
borders, is not to be deemed a regulation of or direct burden upon
interstate commerce, although enforced impartially with respect to
goods manufactured without as well as within the state, and does
not conflict with the "commerce clause." Woodruff
8 Wall. 123, 75 U. S. 140
Machine Co. v. Gage, 100 U. S. 676
Ement v. Missouri, 156 U. S. 296
Baccus v. Louisiana, 232 U. S. 334
The peddler's license tax considered in Welton v.
Missouri, 91 U. S. 275
denounced only because it amounted to a discrimination against the
products of other states, and therefore to an interference with
commerce among the states. To the same effect, Walling v.
Michigan, 116 U. S. 446
116 U. S.
Page 251 U. S. 103
Of course, the transportation of plaintiffs' goods across the
state line is of itself interstate commerce, but it is not this
that is taxed by the City of Covington, nor is such commerce a part
of the business that is taxed, or anything more than a preparation
for it. So far as the itinerant vending is concerned, the goods
might just as well have been manufactured within the State of
Kentucky; to the extent that plaintiffs dispose of their goods in
that kind of sales, they make them the subject of local commerce,
and, this being so, they can claim no immunity from local
regulation whether the goods remain in original packages or
The distinction between state regulation of peddlers and the
attempt to impose like regulations upon drummers who solicit sales
of goods that are to be thereafter transported in interstate
commerce has always been recognized. In Robbins v. Shelby
Taxing District, 120 U. S. 489
Justice Bradley, who spoke for the Court, said (p. 120 U. S.
"When goods are sent from one state to another for sale or in
consequence of a sale, they become part of its general property,
and amenable to its laws, provided that no discrimination be made
against them as goods from another state and that they be not taxed
by reason of being brought from another state, but only taxed in
the usual way as other goods are. Brown v. Houston,
114 U. S.
; Machine Co. v. Gage, 100 U. S.
. But to tax the sale of such goods, or the offer to
sell them, before they are brought into the state is a very
different thing, and seems to us clearly a tax on interstate
See also Crenshaw v. Arkansas, 227 U.
, 227 U. S.
-400, where the distinction was clearly set forth.
And in all the "drummer cases," the fact has appeared that there
was no selling from a stock of goods carried for the purpose, but
only a solicitation of sales, with or without the exhibition of
samples, the goods sold to be thereafter transported from without
the state. Rogers v. Arkansas, 227 U.
, 227 U. S.
Page 251 U. S. 104
Brennan v. Titusville, 153 U.
; Caldwell v. North Carolina,
187 U. S. 622
Rearick v. Pennsylvania, 203 U. S. 507
203 U. S. 510
Dozier v. Alabama, 218 U. S. 124
Browning v. Waycross, 233 U. S. 16
Western Oil Refining Co. v. Lipscomb, 244 U.
; Cheney Bros. Co. v. Massachusetts,
246 U. S. 147
246 U. S.
No. 62. Gilligan v. City of Covington.
of counsel, this case was heard with No. 61, and it is agreed that
a similar judgment is to be entered.
MR. JUSTICE McKENNA and MR. JUSTICE HOLMES dissent.