1. The regulation of interstate and foreign commerce is within
the exclusive control of Congress, and state legislation which
directly burdens such commerce, by taxation or otherwise, is
invalid. P.
279 U. S.
248.
2. Transportation by ferry from one state to another is
interstate commerce, and within the protection of the commerce
clause. P.
279 U. S.
249.
3. The power vested in Congress to regulate commerce embraces
within its control all the instrumentalities by which that commerce
may be carried on. P.
279 U. S.
249.
4. A state cannot lay a tax on interstate commerce in any form,
whether by way of duties laid on the transportation of the subjects
of that commerce, or on the receipts derived from that
transportation, or on the occupation or business of carrying it on.
P.
279 U. S.
249.
5. While a state has power to tax property having a situs within
its limits, whether employed in interstate commerce or not, it
cannot interfere with interstate commerce through the imposition of
a tax which is, in effect, a tax for the privilege of transacting
such commerce. P.
279 U. S.
249.
6. A state statute imposing a tax upon the use of gasoline,
insofar as it affects gasoline purchased outside the state for use
as fuel upon a ferry engaged in interstate commerce, is in effect a
tax upon an instrumentality of commerce, in contravention of the
commerce clause of the Constitution, notwithstanding that the tax
is confined to such only of the gasoline as is used within the
limits of the state. P.
279 U. S.
252.
225 Ky. 45 reversed.
Error to the Court of Appeals of Kentucky to review a judgment
upholding against plaintiffs in error, a ferry company engaged in
interstate commerce, the constitutionality of a statute of Kentucky
which imposed a tax upon the use of gasoline.
Page 279 U. S. 247
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
This is an action brought by the Commonwealth of Kentucky
against plaintiffs in error to recover an amount levied under § 1,
c. 120, Acts 1924,
* which imposes a
tax of three cents per gallon on all gasoline sold within the
commonwealth at wholesale. The words "sold at wholesale," as used
in the act, are defined to include "any and all sales made for the
purpose of resale or distribution or for use," and also to include
any person who
Page 279 U. S. 248
shall purchase such gasoline without the state "and sell or
distribute or use the same within the state." The tax was increased
from three cents to five cents a gallon by § 1, c. 169, Acts 1926,
and part of the amount sued for was computed at the latter
rate.
Plaintiffs in error are engaged in operating a ferryboat on the
Ohio River between Kentucky and Illinois. They do an exclusively
interstate business. They are citizens and residents of Illinois.
Their office and place of business and the situs of all their
personal property is in that state. The motive power of the boat is
created by the use of gasoline, all of which is purchased and
delivered to plaintiffs in error in Illinois. It is stipulated that
75 percent of this gasoline was actually consumed within the limits
of Kentucky, but all of it in the making of interstate journeys.
The tax in question was computed and imposed upon the use of the
gasoline thus consumed.
The trial court rendered judgment for the commonwealth, which
was affirmed by the state court of appeals.
Metropolis Ferry
Co. v. Commonwealth, 225 Ky. 45. The validity of the statute
as applied by the state courts was assailed upon the grounds: (1)
that it violated the provisions of the state constitution requiring
that taxes should be uniform upon all property of the same class,
and (2) that it was in controvention of the commerce clause and
other provisions of the federal Constitution. The state court of
appeals held that the tax was not a property tax, but an excise,
and therefore the uniformity clause of the state constitution was
not involved. The claim under the commerce clause of the federal
Constitution was denied on the ground that the tax was confined to
gasoline used within the limits of the state and the commerce
clause was not affected. It is with the latter question only that
we are here concerned.
Regulation of interstate and foreign commerce is a matter
committed exclusively to the control of Congress, and the rule is
settled by innumerable decisions of this
Page 279 U. S. 249
Court, unnecessary to be cited, that a state law which directly
burdens such commerce by taxation or otherwise constitutes a
regulation beyond the power of the state under the Constitution. It
is likewise settled that transportation by ferry from one state to
another is interstate commerce, and immune from the interference of
such state legislation.
Gloucester Ferry Co. v.
Pennsylvania, 114 U. S. 196,
114 U. S. 217;
Mayor of Vidalia v. McNeely, 274 U.
S. 676,
274 U. S. 680.
The power vested in Congress to regulate commerce embraces within
its control all the instrumentalities by which that commerce may be
carried on.
Gloucester Ferry Co. v. Pennsylvania, supra,
p.
114 U. S. 204.
A state cannot
"lay a tax on interstate commerce in any form, whether by way of
duties laid on the transportation of the subjects of that commerce,
or on the receipts derived from that transportation, or on the
occupation or business of carrying it on."
Leloup v. Port of Mobile, 127 U.
S. 640,
127 U. S. 648;
Lyng v. Michigan, 135 U. S. 161,
135 U. S. 166;
Ozark Pipe Line v. Monier, 266 U.
S. 555,
266 U. S. 562.
While a state has power to tax property having a situs within its
limits, whether employed in interstate commerce or not, it cannot
interfere with interstate commerce through the imposition of a tax
which is, in effect, a tax for the privilege of transacting such
commerce.
Adams Express Co. v. Ohio, 166 U.
S. 185,
166 U. S.
218.
The following are a few of the cases illustrating the many
applications of these principles.
A state statute imposing a tax upon freight, taken up within the
state and carried out of it, or taken up without the state and
brought within it, was held, in the case of the
State
Freight Tax, 15 Wall. 232, to constitute a
regulation of interstate commerce in conflict with the
Constitution. The Court said (pp.
82 U. S.
275-276):
"Then why is not a tax upon freight transported from state to
state a regulation of interstate transportation, and therefore a
regulation of commerce among the
Page 279 U. S. 250
states? Is it not prescribing a rule for the transporter by
which he is to be controlled in bringing the subjects of commerce
into the state and in taking them out? The present case is the best
possible illustration. The Legislature of Pennsylvania has in
effect declared that every ton of freight taken up within the state
and carried out, or taken up in other states and brought within her
limits, shall pay a specified tax. The payment of that tax is a
condition upon which is made dependent the prosecution of this
branch of commerce. And, as there is no limit to the rate of
taxation she may impose, if she can tax at all, it is obvious the
condition may be made so onerous that an interchange of commodities
with other states would be rendered impossible. The same power that
may impose a tax of two cents per ton upon coal carried out of the
state may impose one of five dollars. Such an imposition, whether
large or small, is in restraint of the privilege or right to have
the subjects of commerce pass freely from one state to another
without being obstructed by the intervention of state lines."
A state or state municipality is without power to impose a tax
upon persons for selling or seeking to sell the goods of a
nonresident within the state prior to their introduction therein,
Stockard v. Morgan, 185 U. S. 27; or
for securing or seeking to secure the transportation of freight or
passengers in interstate or foreign commerce,
McCall v.
California, 136 U. S. 104;
Texas Transp. Co. v. New Orleans, 264 U.
S. 150. Nor can a state impose a tax on alien passengers
coming by vessels from foreign countries.
New York v. Compagnie
Gen. Transatlantique, 107 U. S. 59.
And see 48 U. S. 7
How. 283. In
Minot v. Philadelphia, W. & B.R. Co., 2
Abb. (N.S.) 323, 343, 17 Fed.Cas. 458, 464, it was held that a
state law imposing a tax for the use within the state of
locomotives, passenger and freight cars, and for the use of rolling
stock generally was a license fee exacted for the privilege of
such
Page 279 U. S. 251
use. It appearing that larger portion of the locomotives, etc.,
was used for the interstate transportation of persons and property,
the court held that the statute constituted a regulation of such
commerce. In the course of the opinion, by Mr. Justice Strong, it
is said:
"It is of national importance that, in regard to such subjects,
there should be but one regulating power, for if one state can
directly tax persons and property passing through it, or
indirectly,
by taxing the use of means of transportation,
every other may; thus, commercial intercourse between states remote
from each other may be destroyed."
To the same effect is a decision by Mr. Justice Matthews in
respect of a similar state statute imposing a tax for the running
or using of sleeping cars within the state in the transportation of
interstate passengers.
Pullman Southern Car Co. v. Nolan,
22 F. 276, 280-281. On error to this Court, the decision was
affirmed and the tax condemned as one laid on the right of transit
between states.
Sub nom. Pickard v. Pullman Southern Car
Co., 117 U. S. 34,
117 U. S. 46. To
impose a tax upon the transit of passengers from foreign countries
or between states is to regulate commerce, and is beyond state
power. The doctrine of
Crandall v.
Nevada, 6 Wall. 35, so far as it is to the
contrary, has not been followed.
Head Money Cases,
112 U. S. 580,
112 U. S.
591-594;
Henderson v. New York, 92 U. S.
259,
92 U. S. 270;
Pickard v. Pullman Southern Car Co., supra, p.
117 U. S. 48.
The stamp tax on bills of lading for the transportation of gold and
silver from within the state to points outside, which was held
invalid (inadvertently on the ground that it was a tax on exports)
in
Almy v.
California, 24 How. 169, was characterized in
Woodruff v.
Parham, 8 Wall. 123,
75 U. S. 138,
as
"a regulation of commerce, a tax imposed upon the transportation
of goods from one state to another over the high seas in conflict
with that freedom of transit of goods and persons between one
state
Page 279 U. S. 252
and another which is within the rule laid down in
Crandall
v. Nevada and with[-in] the authority of Congress to regulate
commerce among the states."
The statute here assailed clearly comes within the principle of
these and numerous other decisions of like character which might be
added. The tax is exacted as the price of the privilege of using an
instrumentality of interstate commerce. It reasonably cannot be
distinguished from a tax for using a locomotive or a car employed
in such commerce. A tax laid upon the use of the ferryboat would
present an exact parallel. And is not the fuel consumed in
propelling the boat an instrumentality of commerce no less than the
boat itself? A tax which falls directly upon the use of one of the
means by which commerce is carried on directly burdens that
commerce. If a tax cannot be laid by a state upon the interstate
transportation of the subjects of commerce, as this Court
definitely has held, it is little more than repetition to say that
such a tax cannot be laid upon the use of a medium by which such
transportation is effected.
"All restraints by exactions in the form to taxes upon such
transportation, or upon acts necessary to its completion, are so
many invasions of the exclusive power of Congress to regulate that
portion of commerce between the states."
Gloucester Ferry Co. v. Pennsylvania, supra, p.
114 U. S.
214.
Judgment reversed.
MR. JUSTICE McREYNOLDS is of opinion that the judgment below
should be affirmed.
*
". . . A state tax of three cents (3�) per gallon is hereby
imposed on all gasoline, as defined herein, sold in this
Commonwealth at wholesale, as the words 'at wholesale' are
hereinafter defined. . . . The words 'at wholesale,' as used in
this act, shall be held and construed to mean and include any and
all sales made for the purpose of resale or distribution or for
use, and, as well, the gasoline furnished or supplied for
distribution within this state, whether the distributor be the same
person who so furnished the same, his agent or employer or another
person, and also to mean and include any person who shall purchase
or obtain such gasoline without the state and sell or distribute or
use the same within the state. . . ."
Concurring opinion of MR. JUSTICE STONE.
In view of earlier decisions of the court, I acquiesce in the
result. But I cannot yield assent to the reasoning by which the
present forbidden tax on the use of property in interstate commerce
is distinguished from a permissible
Page 279 U. S. 253
tax on property, measured by its use or use value in interstate
commerce.
Cudahy Packing Co. v. Minnesota, 246 U.
S. 450,
246 U. S. 456;
Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. v.
Backus, 154 U. S. 439,
154 U. S. 445;
Adams Express Co. v. Ohio State Auditor, 165 U.
S. 194,
165 U. S. 220;
Western Union Tel. Co. v. Missouri, 190 U.
S. 412,
190 U. S. 422;
cf. Pullman's Palace Car Co. v. Pennsylvania, 141 U. S.
18. Nor can I find any practical justification for this
distinction, or for an interpretation of the commerce clause which
would relieve those engaged in interstate commerce from their fair
share of the expense of government of the states in which they
operate by exempting them from the payment of a tax of general
application, which is neither aimed at nor discriminates against
interstate commerce. It
"affects commerce among the states and impedes the transit of
persons and property from one state to another just in the same
way, and in no other, that taxation of any kind necessarily
increases the expenses attendant upon the use or possession of the
thing taxed."
Delaware Railroad
Tax, 18 Wall. 206,
85 U. S.
232.
MR. JUSTICE HOLMES and MR. JUSTICE BRANDEIS concur in this
opinion.