An Indiana corporation, having a factory in that State at which
it manufactured enamel and applied it by heat to metal articles,
obtained through its traveling salesmen from manufacturers in other
States orders for the enameling of metal parts which they used in
the making of stoves and refrigerators, pursuant to which contracts
it transported the parts from the customers' plants to its own
plant, enameled them there, and returned them to the plants of the
customers, doing the transportation by means of its own trucks.
Thereafter it billed the customers for the enameling, and
remittances were made to it by mail. The value of the metal parts
as units after the completion of the enameling process was from two
and one-half to three times the value of the parts before the
1. That the income was derived from services, not from sales of
the enamel in interstate commerce. P. 313 U. S.
2. The gross receipts from the enameling were taxable by Indiana
under its Gross Income Tax Law. P. 313 U. S.
3. The transportation was an incident to the enameling service.
P. 313 U. S.
4. If the transportation was an item of service for which
deductions should have been allowed in the tax, the taxpayer should
have claimed the deduction and shown its amount. P. 313 U. S.
5. The question whether the Indiana tax law allows the taxpayer
to claim deductions in his tax return and secure an apportionment
of the tax is a question of state law which this Court is not
called upon to answer, the taxpayer not having presented it to the
state authorities. P. 313 U. S. 256
114 F.2d 89, reversed.
Certiorari, 312 U.S. 671, to review a judgment affirming a
recovery in a suit for a refund of taxes alleged to have been
Page 313 U. S. 253
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
The Circuit Court of Appeals, affirming the District Court, has
held that respondent, Ingram-Richardson Manufacturing Company, is
entitled to a refund of a tax levied under the Indiana Gross Income
Tax Law [Footnote 1
] upon the
ground of the invalidity of the tax under the commerce clause of
the Federal Constitution, article 1, § 8, cl. 3. 114 F.2d 889. We
granted certiorari because of an alleged conflict with applicable
decisions of this Court.
The tax was for $5,410.20, [Footnote 2
] and was laid upon respondent's gross receipts
derived as follows:
Respondent, an Indiana corporation, has a factory at Frankfort
in that State where it manufactures enamel, both in a granular
form, known as frit, and in a hard, finished form fused with metal
articles. In the instant case, the enamel was fused with metal
parts used in stoves and refrigerators manufactured by respondent's
customers in various States other than Indiana. Respondent's
traveling salesmen solicited orders from such customers pursuant to
which respondent transported by its trucks the stove and
refrigerator parts belonging to its customers from their plants to
its own plant for enameling. There,
Page 313 U. S. 254
the enameling was done by the process set forth in the findings,
and respondent then hauled the enameled parts back to its
customers' factories. Respondent thereafter billed its customers
for the enameling, and remittances were made to respondent by mail.
The value of the metal parts as units after the completion of the
enameling process was from two and one-half to three times the
value of the respective parts before the enameling.
Respondent's contention, as set forth in its complaint and as
still asserted, is that these transactions constituted sales of the
hard, finished enamel in interstate commerce. The Circuit Court of
Appeals disagreed with that contention, and held that the income in
question was derived from services. We are in accord with that
In the alternative, respondent contends that the services paid
for included the solicitation of orders by respondent's agents and
the execution of contracts in other States, interstate
communications by mail, telephone and telegraph, and also the
transportation by respondent of the stove and refrigerator parts
from and to places in other States.
The enameling process was an activity performed at respondent's
plant in Indiana, and the gross receipts therefrom were taxable by
Indiana under its Gross Income Tax Law. See Department of
Treasury v. Wood Preserving Corporation, ante,
p. 313 U. S. 62
fact that the orders for the enameling were obtained by
respondent's agents and contracts were executed outside Indiana did
not make the enameling process other than an intrastate activity
and any the less a proper subject for the application of the taxing
statute. Western Live Stock v. Bureau of Revenue,
303 U. S. 250
303 U. S.
But the court below has held that there was included in the
service rendered by respondent the transportation by its trucks of
the stove and refrigerator parts from and to the customers' plants
in other States. The court thought
Page 313 U. S. 255
that the reasoning of our opinion in Gwin, White &
Prince v. Henneford, 305 U. S. 434
applied. That case, however, presented a different situation. The
business there was that of a marketing agent for a federation of
fruit growers, and the state tax was measured by the gross receipts
of the taxpayer from the business of marketing fruit shipped from
the taxing State to the places of sale in other States and foreign
countries. We found that the entire service for which the
compensation was paid was "in aid of the shipment and sale of
merchandise in that commerce" (interstate and foreign), and hence
the service was held to be within the protection of the commerce
p. 305 U. S. 437
Here, on the contrary, the entire service was in aid of the
enameling business conducted within the State. The transportation
of the metal parts to and from Indiana were but incident to that
intrastate business, as was the circulation of appellants' magazine
in States other than the taxing State in the Western Live
p. 303 U. S.
Moreover, if the transportation of the metal parts were regarded
as an item of service for which a deduction should have been
allowed, we think that it was the duty of respondent, in view of
the fact that it was conducting an intrastate business clearly
subject to the tax, to claim the deduction and show the amount
which should be allowed. It does not appear that respondent did
either. Respondent made its claim for a total exemption from the
tax upon the ground that it was laid upon interstate sales -- a
contention which it has failed to support.
The State contends, citing provisions of the taxing act, that
the legislature of Indiana contemplated that the taxpayer would
reflect in the tax return any deductions claimed, making a
separation between taxable and nontaxable items, and that the tax
return itself provided a method for claiming any deductions to
Page 313 U. S. 256
the taxpayer thought itself entitled. Respondent insists that
the Act did not provide a method of apportionment. In the absence
of an effort on the part of respondent to present a claim for
deduction and to have the state authorities pass upon the question
of deduction or apportionment, as distinguished from its claim for
a total exemption, we are not called upon to attempt to resolve the
question of state law.
The judgment of the Circuit Court of Appeals is reversed, and
the cause is remanded to the District Court for further proceedings
in conformity with this opinion.
Section 2 of Chapter 50 of the Acts of Indiana of 1933. 11
Burns' Indiana Statutes, Sec. 64-2602. See Department of
Treasury v. Wood Preserving Corp., ante,
p. 313 U. S. 62
The suit also embraced a claim for an additional sum of
$1,154.26, recovery of which was denied below. That claim is not