Pursuant to a Nebraska tax statute, an apportioned ad
tax was levied on the flight equipment of appellant,
an interstate air carrier. Appellant is not incorporated in
Nebraska, and does not have its principal place of business or
"home port" in that State, but its aircraft make eighteen stops per
day regularly in Nebraska and approximately one tenth of
appellant's revenue is derived from the pickup and discharge of
Nebraska freight and passengers. Appellant challenged the validity
of the tax under the Federal Constitution, but it did not challenge
the reasonableness of the apportionment prescribed by the taxing
statute or the application of the apportionment to its
appellant's flight equipment is not immune from
taxation by Nebraska for want of situs there or because regulation
of air navigation by the Federal Government precludes such state
taxation. Pp. 347 U. S.
1. Federal statutes governing air commerce enacted under the
commerce power do not preclude the challenged tax. Pp. 347 U. S.
2. Appellant has not demonstrated that the Commerce Clause
otherwise bars this tax as a burden on interstate commerce. Pp.
347 U. S.
3. Whether an instrumentality of commerce has tax situs in a
state for the purpose of subjection to a property tax is a question
of due process; and that question was sufficiently presented by
appellant in this case. Pp. 347 U. S.
4. Eighteen stops per day by appellant's aircraft was sufficient
contact with Nebraska to sustain that State's power to levy an
apportioned ad valorem
tax on such aircraft, even though
the same aircraft do not land every day, and even though none of
the aircraft is continuously within the State. Pp. 347 U. S.
5. The power of Nebraska to levy this tax is not affected by the
fact that the original plaintiff in this case was domiciled in
Delaware, through which its planes did not fly, and that appellant
(with which the original plaintiff was merged) is domiciled in
Oklahoma, through which the aircraft in question make regular
flights. P. 347 U. S.
Page 347 U. S. 591
6. Northwest Airlines v. Minnesota, 322 U.
, does not preclude states other than those of the
corporate domicile from taxing instrumentalities of interstate
commerce on the apportionment basis in accordance with their use in
the taxing state. Pp. 347 U. S.
157 Neb. 425, 59 N.W.2d
MR. JUSTICE REED delivered the opinion of the Court.
The question presented by this appeal from the Supreme Court of
Nebraska is whether the Constitution bars the State of Nebraska
from levying an apportioned ad valorem
tax on the flight
equipment of appellant, an interstate air carrier. Appellant is not
incorporated in Nebraska, and does not have its principal place of
business or home port registered under the Civil Aeronautics Act,
52 Stat. 977, 49 U.S.C. §§ 401-705, in that state. Such flight
equipment is employed as a part of a system of interstate air
commerce operating over fixed routes and landing on and departing
from airports within Nebraska on regular schedules. Appellant does
not challenge the reasonableness of the apportionment prescribed by
the taxing statute or the application of such apportionment to its
property. It contends only that its flight equipment used in
interstate commerce is immune from taxation by Nebraska because
without situs in that state and because regulation of air
navigation by the Federal Government precludes such state
This petition for a declaratory judgment of the invalidity of §§
77-1244 to 77-1250 of the state tax statute [Footnote 1
Page 347 U. S. 592
and an injunction against the collection of taxes assessed under
such provisions for previous years was filed as an original action
in the court below by Mid-Continent Airlines, Inc., and tried upon
stipulated facts. Subsequent to filing, but before the decision,
Mid-Continent and appellant were merged on August 1, 1952, and
appellant was substituted as the party plaintiff. Mid-Continent had
been incorporated in Delaware with its corporate place of business
in Wilmington in that state, and Braniff is incorporated in
Oklahoma, and has its corporate place of business in Oklahoma City.
Pursuant to the merger, Mid-Continent's main executive offices were
moved from Kansas City, Missouri, and merged with appellant's in
Dallas, Texas. The number of regularly scheduled stops in Nebraska,
fourteen per day at Omaha and four at Lincoln, was not affected by
The home port registered with the Civil Aeronautics Authority
and the overhaul base for the aircraft in question is the
Minneapolis-St. Paul Airport, Minnesota. All of the aircraft not
undergoing overhaul fly regular schedules upon a circuit ranging
from Minot, North Dakota, to New Orleans, Louisiana, with stops in
fourteen states including Minnesota, Nebraska, and Oklahoma. No
stops were made in Delaware. The Nebraska stops are of short
duration, since utilized only for the discharge and loading of
passengers, mail, express, and freight, and sometimes for
refueling. Appellant neither owns nor maintains facilities for
repairing, reconditioning, or storing its flight equipment in
Nebraska, but rents depot space and hires other services as
required. The Supreme Court of Nebraska made no distinction as to
taxability between those years when no flights were made into the
state of domicile (Delaware) and those when flights did enter the
state of new domicile (Oklahoma).
It is stipulated that the tax in question is assessed only
against regularly scheduled air carriers, and is not applied
Page 347 U. S. 593
to carriers who operate only intermittently in the state. The
statute defines "flight equipment" as "aircraft fully equipped for
flight," [Footnote 2
"Any tax upon or measured by the value of flight equipment of
air carriers incorporated or doing business in this state shall be
assessed and collected by the Tax Commissioner. [Footnote 3
A formula is prescribed for arriving at the proportion of a
carrier's flight equipment to be allocated to the state. [Footnote 4
The statute uses the allocation formula of the "proposed uniform
statute to provide for an equitable method of state taxation of air
carriers" adopted by the Council of State Governments upon the
recommendation of the National Association of Tax Administrators in
1947. [Footnote 5
] Use of a
uniform allocation formula to apportion air carrier taxes among the
states follows the recommendation of the Civil Aeronautics Board in
its report to Congress. [Footnote
Page 347 U. S. 594
The Nebraska statute provides for reports, levy, and rate of tax
by state average. [Footnote
Required reports filed by Mid-Continent for 1950 show that about
9% of its revenue and 11 1/2% of the total system tonnage
originated in Nebraska, and about 9% of its total stops were made
in that state. From these figures, using the statutory formula, the
Tax Commissioner arrived at a valuation of $118,901 allocable to
Nebraska, resulting in a tax of $4,280.44. Since Mid-Continent
filed no return for 1951, the same valuation was used, and an
increased rate resulted in assessment of $4,518.29. The Supreme
Court of Nebraska held the statute not violative of the Commerce
Clause, and dismissed appellant's petition. [Footnote 8
Appellant argues that federal statutes governing air commerce
enacted under the commerce power preempt the field of regulation of
such air commerce, and preclude this tax. Congress, by the Civil
Aeronautics Act of 1938, 52 Stat. 977, 1028, § 1107(i)(3), 49
U.S.C. § 176(a), enacted:
"The United States of America is declared to possess and
exercise complete and exclusive national sovereignty in the air
space above the United States, including the air space above all
inland waters and the air space above those portions of the
Page 347 U. S. 595
marginal high seas, bays, and lakes, over which by international
law or treaty or convention the United States exercises national
This provision originated in the Air Commerce Act of 1926, 44
Stat. 568, 572, § 6. The 1938 Act also declares "a public right of
freedom of transit" for air commerce in the navigable air space to
exist for any citizen of the United States. 52 Stat. 980, § 3, 49
U.S.C. § 403. [Footnote 9
The provision pertinent to sovereignty over the navigable air
space in the Air Commerce Act of 1926 was an assertion of exclusive
national sovereignty. The convention between the United States and
other nations respecting international civil aviation ratified
August 6, 1946, 61 Stat. 1180, accords. The Act, however, did not
expressly exclude the sovereign powers of the states. H.R.Rep.No.
572, 69th Cong., 1st Sess., p. 10. The Civil Aeronautics Act of
1938 gives no support to a different view. [Footnote 10
] After the enactment of the Air
Commerce Act, more than twenty states adopted the Uniform
Aeronautics Act. It had three provisions indicating that the states
did not consider their sovereignty affected by the National Act
except to the extent that the states had ceded that sovereignty by
constitutional grant. [Footnote
Page 347 U. S. 596
recommendation of the National Conference of Commissioners on
Uniform State Laws to the states to enact this Act was withdrawn in
1943. [Footnote 12
adopted, however, it continues in effect. See United States v.
208 F.2d 291. Recognizing this "exclusive national
sovereignty" and right of freedom in air transit, this Court, in
United States v. Causby, 328 U. S. 256
328 U. S. 261
nevertheless held that the owner of land might recover for a taking
by national use of navigable air space, resulting in destruction in
whole or in part of the usefulness of the land property.
These Federal Acts regulating air commerce are bottomed on the
commerce power of Congress, not on national ownership of the
navigable air space, as distinguished from sovereignty. In
reporting the bill which became the Air Commerce Act, it was
"The declaration of what constitutes navigable air space is an
exercise of the same source of power, the interstate commerce
clause, as that under which Congress has long declared in many acts
what constitutes navigable or non-navigable waters. The public
right of flight in the navigable air space owes
Page 347 U. S. 597
its source to the same constitutional basis which, under
decisions of the Supreme Court, has given rise to a public easement
of navigation in the navigable waters of the United States,
regardless of the ownership of the adjacent or subjacent soil."
H.R.Rep.No. 572, 69th Cong., 1st Sess., p. 10.
The commerce power, since Gibbons v.
9 Wheat. 1, 22 U. S. 193
comprehended navigation of streams. Its breadth covers all
commercial intercourse. But the federal commerce power over
navigable streams does not prevent state action consistent with
that power. Gilman v.
3 Wall. 713, 70 U. S. 729
Since, over streams, Congress acts by virtue of the commerce power,
the sovereignty of the state is not impaired. Oklahoma v.
Atkinson Co., 313 U. S. 508
313 U. S. 534
The title to the beds and the banks are in the states and the
riparian owners, subject to the federal power over navigation.
regulation of interstate land and water carriers under the commerce
power has not been deemed to deny all state power to tax the
property of such carriers. We conclude that existent federal air
carrier regulation does not preclude the Nebraska tax challenged
Nor has appellant demonstrated that the Commerce Clause
otherwise bars this tax as a burden on interstate commerce.
] We have
frequently reiterated that the
Page 347 U. S. 598
Commerce Clause does not immunize interstate instrumentalities
from all state taxation, but that such commerce may be required to
pay a nondiscriminatory share of the tax burden. [Footnote 15
] And appellant does not allege
that this Nebraska statute discriminates against it, nor, as noted
above, does it challenge the reasonableness of the apportionment
prescribed by the statute. [Footnote 16
The argument upon which appellant depends ultimately, however,
is that its aircraft never "attained a taxable situs within
Nebraska," from which it argues that the Nebraska tax imposes a
burden on interstate commerce. In relying upon the Commerce Clause
on this issue and in not specifically claiming protection under the
Due Process Clause of the Fourteenth Amendment, appellant names the
wrong constitutional clause to support its position. While the
question of whether a commodity en route to market is sufficiently
settled in a state for purpose of subjection to a property tax has
been determined by this Court as a Commerce Clause question,
Page 347 U. S. 599
the bare question whether an instrumentality of commerce has tax
situs in a state for the purpose of subjection to a property tax is
one of due process. [Footnote
] However, appellant timely raised and preserved its
contention that its property was not taxable, because such property
had attained no taxable situs in Nebraska. Though inexplicit, we
consider the due process issue within the clear intendment of such
contention, and hold such issue sufficiently presented. See New
York ex rel. Bryant v. Zimmerman, 278 U. S.
, 278 U. S. 67
and cases cited; Wolfson and Kurland, Jurisdiction of the Supreme
Court of the United States, 149 et seq.
Appellant relies upon cases involving ocean-going vessels to
support its contention that its aircraft attained no tax situs in
Nebraska. See, e.g., 58 U. S.
Page 347 U. S. 600
Mail S.S. Co.,
17 How. 596; Morgan v.
16 Wall. 471; Southern Pacific Co. v.
Kentucky, 222 U. S. 63
first two cases were efforts to tax the entire value of the ships
as other local property, without apportionment, when they were used
to plow the open seas. The last case holds the state of corporate
domicile has power to tax vessels that are not taxable elsewhere. A
closer analogy exists between planes flying interstate and boats
that ply the inland waters. We perceive no logical basis for
distinguishing the constitutional power to impose a tax on such
aircraft from the power to impose taxes on river boats. Ott v.
Mississippi Valley Barge Line Co., 336 U.
; Standard Oil Co. v. Peck, 342 U.
. The limitation imposed by the Due Process Clause
upon state power to impose taxes upon such instrumentalities was
succinctly stated in the Ott
"So far as due process is concerned, the only question is
whether the tax, in practical operation, has relation to
opportunities, benefits, or protection conferred or afforded by the
336 U.S. at 336 U. S. 174
In Curry v. McCanless, 307 U. S. 357
evolution of such restriction on state power was reviewed, and the
rule stated thusly:
"When we speak of the jurisdiction to tax land or chattels as
being exclusively in the state where they are physically located,
we mean no more than that the benefit and protection of laws
enabling the owner to enjoy the fruits of his ownership and the
power to reach effectively the interests protected, for the purpose
of subjecting them to payment of a tax, are so narrowly restricted
to the state in whose territory the physical property is located as
to set practical limits to taxation by others."
at 307 U. S.
Thus, the situs issue devolves into the question of whether
eighteen stops per day by appellant's aircraft is sufficient
contact with Nebraska to sustain that state's
Page 347 U. S. 601
power to levy an apportioned ad valorem
tax on such
aircraft. We think such regular contact is sufficient to establish
Nebraska's power to tax even though the same aircraft do not land
every day and even though none of the aircraft is continuously
within the state. "The basis of the jurisdiction is the habitual
employment of the property within the state." [Footnote 19
] Appellant rents its ground
facilities and pays for fuel it purchases in Nebraska. This leaves
it in the position of other carriers such as rails, boats, and
motors that pay for the use of local facilities so as to have the
opportunity to exploit the commerce, traffic, and trade that
originates in or reaches Nebraska. Approximately one-tenth of
appellant's revenue is produced by the pickup and discharge of
Nebraska freight and passengers. Nebraska certainly affords
protection during such stops, and these regular landings are
clearly a benefit to appellant.
Nor do we think that Nebraska's power to levy this tax was
affected by the merger of Mid-Continent with Braniff. Since
"The rule which permits taxation by two or more states on an
apportionment basis precludes taxation of all of the property by
the state of domicile,"
Standard Oil Co. v. Peck, supra,
at 342 U. S. 384
we deem it immaterial that, before the merger Mid-Continent was
domiciled in Delaware, a state through which its planes did not
fly, and after the merger Braniff is domiciled in Oklahoma, a state
through which these aircraft make regular flights.
Appellant urges that Northwest Airlines v. Minnesota,
322 U. S. 292
precludes this tax unless that case is to be overruled. In that
case, Minnesota, as the domicile of the air carrier and its "home
port," was permitted to tax the entire value of the fleet ad
although it ranged
Page 347 U. S. 602
by fixed routes through eight states. [Footnote 20
] While no one view mustered a majority of
this Court, it seems fair to say that, without the position stated
in the Conclusion and Judgment which announced the decision of this
Court, the result would have been the reverse. That position was
that it was not shown "that a defined part of the domiciliary
corpus has acquired a permanent location, i.e.,
situs, elsewhere." 322 U.S. at 322 U. S. 295
That opinion recognized the "doctrine of tax apportionment for
instrumentalities engaged in interstate commerce," 322 U.S. at
322 U. S. 297
but held it inapplicable because no "property (or a portion of
fungible units) is permanently situated in a State other than the
domiciliary State." 322 U.S. at 322 U. S. 298
When Standard Oil Co. v. Peck, 342 U.
, 342 U. S. 384
was here, the Court interpreted the Northwest Airlines
case to permit states other than those of the corporate domicile to
tax boats in interstate commerce on the apportionment basis in
accordance with their use in the taxing state. We adhere to that
MR. JUSTICE BLACK concurs in the result.
MR. JUSTICE JACKSON dissents for the reasons stated in his
concurring opinion in Northwest Airlines v. Minnesota,
322 U. S. 292
Neb.Rev.Stat.1943, § 77-1244 et seq.
This section provides that
"The proportion of flight equipment allocated to this state for
purposes of taxation shall be the arithmetical average of the
following three ratios: (1) The ratio which the aircraft arrivals
and departures within this state scheduled by such air carrier
during the preceding calendar year bears to the total aircraft
arrivals and departures within and without this state scheduled by
such carrier during the same period; Provided,
that in the
case of nonscheduled operations all arrivals and departures shall
be substituted for scheduled arrivals and departures; (2) the ratio
which the revenue tons handled by such air carrier at airports
within this state during the preceding calendar year bears to the
total revenue tons handled by such carrier at airports within and
without this state during the same period; and (3) the ratio which
such air carrier's originating revenue within this state for the
preceding calendar year bears to the total originating revenue of
such carrier within and without this state for the same
Resolutions, The Eighth General Assembly of the States, 20 State
Multiple Taxation of Air Carriers, H.R.Doc.No.141, 79th Cong.,
1st Sess. Recommendations by various interested groups as to the
proper method of apportionment are included in that report and its
appendices. See also
Arditto, State and Local Taxation of
Scheduled Local Airlines, 16 J.Air L. & Com. 162; Kassell,
Interstate Cooperation and Airlines, 25 Taxes 302. Mr. Bulwinkle
introduced bills in accordance with the recommendation of the CAB
report that the National Government should prescribe the method of
state taxation of air carriers. The bills adopted the Council
formula utilized by Nebraska. Neither was enacted. H.R. 3446, 79th
Cong., 1st Sess.; H.R. 1241, 80th Cong., 1st Sess.
Neb.Rev.Stat.1943, §§ 77-1247, 77-1249.
Mid-Continent Airlines, Inc. v. Nebraska State Board of
Equalization and Assessment,
157 Neb. 425, 59 N.W.2d
That space was defined in § 10 of the Air Commerce Act, and
freedom for its navigation declared. This was continued by the
Civil Aeronautics Act, 49 U.S.C. § 180, in "airspace above the
minimum safe altitudes of flight prescribed by the Civil
S.Rep.No.1661, 75th Cong., 3d Sess.; H.R.Rep.No.2254, 75th
Cong., 3d Sess.; H.R.Conf.Rep.No.2635, 75th Cong., 3d Sess.
11 Uniform Laws Annotated 159:
"§ 2. Sovereignty in Space. -- Sovereignty in the space above
the lands and waters of this State is declared to rest in the
State, except where granted to and assumed by the United States
pursuant to a constitutional grant from the people of this
"§ 3. Ownership of Space. -- The ownership of the space above
the lands and waters of this State is declared to be vested in the
several owners of the surface beneath, subject to the right of
flight described in Section 4."
"§ 4. Lawfulness of Flight. -- Flight in aircraft over the lands
and waters of this State is lawful unless at such a low altitude as
to interfere with the then existing use to which the land or water,
or the space over the land or water, is put by the owner, or unless
so conducted as to be imminently dangerous to persons or property
lawfully on the land or water beneath. The landing of an aircraft
on the lands or waters of another, without his consent, is
unlawful, except in the case of a forced landing. For damages
caused by a forced landing, however, the owner or lessee of the
aircraft or the aeronaut shall be liable, as provided in Section
Conference Handbook, 1943, pp. 66-67. Efforts
continue to draft an acceptable State Uniform Aeronautical Code.
Conference Handbook, 1948, p. 147.
United States v. Chandler Dunbar Water Power Co.,
229 U. S. 53
229 U. S. 60
United States v. Kansas City Life Ins. Co., 339 U.
, 339 U. S. 808
Federal Power Commission v. Niagara Mohawk Power Corp.,
347 U. S. 239
347 U. S. 246
In its original petition, appellant also alleged that the
Nebraska statute is invalid under § 8, cl. 3, § 9, cl. 6, and § 10,
cl. 3 of Art. I of the Constitution. While noting that such
contentions were apparently "abandoned in brief and oral argument,"
the court below held such provisions of the Constitution not
violated. Since appellant did not preserve such contentions in its
Statement as to Jurisdiction, we do not consider such issues.
Western Live Stock v. Bureau of Revenue, 303 U.
, 303 U. S. 254
Michigan-Wisconsin Pipe Line Co. v. Calvert, 347 U.
, 347 U. S.
See Pullman's Palace-Car Co. v. Pennsylvania,
141 U. S. 18
Ford Motor Co. v. Beauchamp, 308 U.
; Nashville, C. & St. L. Ry. Co. v.
Browning, 310 U. S. 362
Central Greyhound Lines v. Mealey, 334 U.
, 334 U. S. 654
334 U. S.
-663; Ott v. Mississippi Valley Barge Line
Co., 336 U. S. 169
336 U. S. 174
Canton R. Co. v. Rogan, 340 U. S. 511
340 U. S.
-516. Multiple Taxation of Air Commerce,
H.R.Doc.No.141, 79th Cong., 1st Sess.; Arditto, State and Local
Taxation of Scheduled Local Airlines, 16 Jour. of Air Law &
Com. 162; Howard, State Taxation of Airplanes in Interstate
Commerce, 10 Mo.L.Rev. 195; Welch, The Taxation of Air Carriers, 11
Law & Contemp.Prob. 584; Green, The War Against the States in
Aviation, 31 Va.L.Rev. 835; Sutherland and Vinciguerra, The Octroi
and the Airplane, 32 Cornell L.Q. 161; Saxe, Federal Control of
State Taxation of Airlines, 31 Cornell L.Q. 228; Ternes, Aviation
Taxation, 25 Mich. S.B.J. 23; Note, 57 Harv.L.Rev. 1097.
See e.g., Independent Warehouses v. Scheele,
331 U. S. 70
331 U. S. 72
Carson Petroleum Co. v. Vial, 279 U. S.
; Champlain Realty Co. v. Brattleboro,
260 U. S. 366
General Oil Co. v. Crain, 209 U.
; Coe v. Errol, 116 U.
; Brown v. Houston, 114 U.
; Powell, Taxation of Things in Transit, 7
Va.L.Rev. 167, 245, 429, 497.
See e.g., Johnson Oil Refining Co. v. Oklahoma,
290 U. S. 158
Frick v. Pennsylvania, 268 U. S. 473
Union Refrigerator Transit Co. v. Kentucky, 199 U.
; Delaware, L. & W. R. Co. v.
Pennsylvania, 198 U. S. 341
Beale, Conflict of Laws, 533 et seq.
; Moore, Taxation of
Movables and the Fourteenth Amendment, 7 Col.L.Rev. 309; Page,
Jurisdiction to Tax Tangible Movables, 1945 Wis.L.Rev. 125.
While the common law concept of situs was recognized by this
Court as a limitation on state power to tax tangible personalty
prior to invocation of the Fourteenth Amendment as a defense to
such taxation, the bases for such decisions varied and no
consistent constitutional principle was applied. Compare
the following cases: Hays v. Pacific Mail S.S.
17 How. 596; Morgan v.
16 Wall. 471; St. Louis
v. Wiggins Ferry Co.,
11 Wall. 423; Marye v.
Baltimore & O. R. Co., 127 U. S. 117
Pullman's Palace-Car Co. v. Pennsylvania, 141 U. S.
; Adams Express Co. v. Ohio State Auditor,
165 U. S. 194
Hartman, State Taxation of Interstate Commerce,
13, 73 et seq.
A collection of this Court's decisions dealing with power to tax
may be found in an Appendix to Miller Bros. Co. v.
Maryland, 347 U. S. 340
Johnson Oil Refining Co. v. Oklahoma, supra,
290 U. S. 162
See also Pullman's Palace Car Co. v. Pennsylvania, supra; Ott
v. Mississippi Valley Barge Line Co., supra.
Subsequent to the Northwest Airlines
enacted a tax statute incorporating an apportionment formula for
allocation of the valuation of property of air carriers to
Minnesota. Minn.Stat.1945, §§ 270.071-270.079, as amended,
Minn.Laws 1953, c. 672, §§ 2-3.
MR. JUSTICE DOUGLAS, concurring.
Braniff Airways, in challenging the power of Nebraska to lay
this ad valorem
tax, claims only that its planes have no
taxable situs in the State. It does not claim that no fraction of
the aircraft, on an apportioned basis,
Page 347 U. S. 603
is permanently in the State. Nor does it attack this
My understanding of our decisions is that the power to lay an
tax turns on the permanency of the property in
the State. All the property may be there, or only a fraction of it.
Property in transit, whether a plane discharging passengers or an
automobile refueling, is not subject to an ad valorem
Property in transit may move so regularly and so continuously that
part of it is always in the State. Then the fraction, but no more,
may be taxed ad valorem.
I mention these elemental points to reserve explicitly the
validity of the apportionment formula that serves as the basis of
this ad valorem
tax. The formula used presents substantial
questions. What might be an adequate formula for a gross receipts
tax might be inadequate for an ad valorem
when we are faced with a due process question, we have a problem we
may not delegate to Congress.
I do not think the Court takes a position contrary to what I
have said. But there are passages in the opinion which blur the
constitutional issues as they are blurred and confused in the
interesting report of the Civil Aeronautics Board, H.R.Doc.No. 141,
79th Cong., 1st Sess., entitled Multiple Taxation of Air Commerce.
Hence I have joined in the judgment of the Court, but not in the
MR. JUSTICE FRANKFURTER, dissenting.
One of the most treacherous tendencies in legal reasoning is the
transfer of generalizations developed for one set of situations to
seemingly analogous, yet essentially very different, situations.
The doctrines evolved in adjusting rights as between the States to
tax property bearing some relation to a number of States, and the
taxing power of the States as against the freedom from
Page 347 U. S. 604
State interferences secured by the Commerce Clause, bear, of
course, a practical relation to what it is that is taxed. It took a
considerable time to make this adjustment in regard to taxation of
railroad property and railroad income -- to decide when the States
are wholly excluded from levying certain taxes, when an ad
tax may be levied on railroad property reasonably
deemed to be permanently in a given State, and on what basis income
from interstate railroad business may fairly be apportioned among
different States. Even as to railroads, nice distinctions had to be
made, and the making of them has not been concluded.
It stands to reason that the drastic differences between
slow-moving trains and the bird-like flight of airplanes would be
reflected in the law's response to the claims of the different
States and the limitations of the Commerce Clause upon those
claims. The differences in result and the conflict even among those
who agreed in result in Northwest Airlines v. Minnesota,
322 U. S. 292
demonstrate not the contrariness or caprice of different minds, but
the inherent perplexities of the law's adjustment to such novel
problems as the exercise of the taxing power over commercial
aviation in a federal system. The problems canvassed in that case
were unprecedented, and perhaps the most important thing that was
there decided was the refusal of the Court to apply to air
transportation the doctrines that had been enunciated with regard
to land and water transportation.
The plain intimation of the case -- that these novel problems,
affecting the taxing power of the States and the Nation, call for
the comprehensive powers of legislation possessed by Congress --
found response in a resolution of Congress directing the Civil
Aeronautics Board to develop the
"means for eliminating and avoiding, as far as practicable,
multiple taxation of persons engaged in air commerce . . . which
has the effect of unduly
Page 347 U. S. 605
burdening or unduly impeding the development of air
58 Stat. 723. The inquiry thus set afoot produced an
illuminating report. See
H.R.Doc.No.141, 79th Cong., 1st
Sess., which analyzed the difficulties and also made concrete
proposals. [Footnote 2/1
] The gist
of these proposals was that Congress make an apportionment of taxes
among the States over which air carriers fly based upon relevant
factors and in appropriate ratios. The basis of taxation by
Nebraska, here under review, substantially reflects the factors
which the Civil Aeronautics Board recommended to the Congress. It
is one thing, however, for the individual States to determine what
factors should be taken into account and how they should be
weighted. It is quite another for Congress to devise, as the Civil
Aeronautics Board recommended it should, a scheme of apportionment
binding on all the States. Until that time, Nebraska may rely on
one scheme of apportionment; other States on other schemes. And
each State may, from time to time, modify the relevant factors.
The exercise of the taxing power by one of the States by means
of a formula, based on such criteria as tonnage, revenue, and
arrivals and departures, may, in isolation, impose no unfair burden
on commerce. And the adoption by all the States of such a basis for
taxation, which only congressional action could ensure, would not
offend the Commerce Clause. It is the diverse and fluctuating
Page 347 U. S. 606
exercise of power by the various States, even where based on
concededly relevant factors, which imposes an undue burden on
interstate commerce. [Footnote
The complexity of the proposals of the Board's Report -- the
items to be taken into account, the balance to be struck among
them, the problem of giving the States their due without unfairly
burdening an industry of vital national import -- indicates how ill
adapted the judicial process is, as against the choices open to
Congress, for dealing with these problems and how warily this Court
should move within the limits of its own inescapable duty to act.
The protection of interstate commerce against the burden of
multiple taxation ought not to be left to litigation growing out of
changes in the methods of taxation.
"The immunities implicit in the Commerce Clause and the
potential taxing power of a State can hardly be made to depend, in
the world of practical affairs, on the shifting incidence of the
varying tax laws of the various States at a particular moment.
Courts are not possessed of instruments of determination so
delicate as to enable them to weigh the various factors in a
complicated economic setting which, as to an isolated application
of a State tax, might mitigate the obvious burden generally created
by a direct tax on commerce."
Freeman v. Hewit, 329 U. S. 249
329 U. S.
Page 347 U. S. 607
This would not be the only instance in which a constructive
adjustment of competing considerations requires congressional
legislation and is beyond the scope of the judicial process.
See Davis v. Department of Labor, 317 U.
, 317 U. S. 259
Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,
342 U. S. 282
United States v. Standard Oil Co., 332 U.
; United States v. Gilman, 347 U.
It was not too difficult in Northwest Airlines
Minnesota to levy a personal property tax on the entire fleet of
airplanes owned by a corporation of its creation, the principal
place of business of which was also Minnesota. The State of
Minnesota, as we said, was the only State that had such a hold on
the planes. In the case before us, Nebraska has no such relation
with the airplanes on which it seeks to impose an ad
This Court has held that a State may levy an ad valorem
tax on the basis of a showing that the total time spent in a State
by different units of a carrier's property is such that a certain
proportion of that property may be said to have a permanent
location in that State. Such a doctrine of apportionment, as the
basis of property taxation, was adopted by this Court in
Pullman's Palace Car Co. v. Pennsylvania, 141 U. S.
, with relation to railroad cars, and in Ott v.
Mississippi Valley Barge Line Co., 336 U.
, with relation to barges. But boats and railroad
cars which spend hours and days at a time in a State have a
closeness and duration of relationship to that State obviously not
true of planes which make brief stopovers for a few minutes.
The appealing phrase that "interstate business must pay its way"
can be invoked only when we know what the "way" is for which
business commerce must pay. Of course, the appellant must pay for
the use of airports and other services it enjoys in Nebraska.
Page 347 U. S. 608
must pay a tax on all its property permanently located in
Nebraska. Like everyone else, it must pay a gasoline tax. In fact,
it pays approximately $22,000 a year for the use of the airport,
$14,000 a year in gasoline taxes, and appropriate property taxes on
office equipment, trucks, and other items permanently in
But only those who have a sufficiently substantial relation to
Nebraska that they may fairly be said to partake of the benefits,
though impalpable and unspecific, it gives as an ordered society,
may be taxed because they partake of those benefits. And even then,
of course, an undue burden must not be cast on commerce. Not unless
Nebraska can show that appellant has airplanes that have a
substantially permanent presence in Nebraska can Nebraska exert its
taxing power on their presence. I do not believe that planes which
pause for a few moments can be made the basis for the exercise of
such power. [Footnote 2/4
Nebraska can tax without such a tie, every other State through
which the planes fly or in which they alight for a few minutes can
tax. Surely this is an obvious inroad upon the Commerce Clause and
as such barred by the Constitution.
It cannot be said that, for airplanes flying regularly scheduled
flights to alight, stop over for a short time, and then take off is
so tenuously related to Nebraska that it would deny due process for
that State to seize on these short stopovers as the basis of an
tax. But the incidence of a tax may offend the
Commerce Clause, even though it may satisfy the Due Process
Page 347 U. S. 609
I am not unaware that there is an air of imprecision about what
I have written. Such is the intention. Until Congress acts, the
vital thing for the Court in this new and subtle field is to focus
on the process of interstate commerce and protect it from inroads
of taxation by a State beyond
"opportunities which it has given, . . . protection which it has
afforded, . . . benefits which it has conferred by the fact of
being an orderly, civilized society."
Wisconsin v. J. C. Penney Co., 311 U.
, 311 U. S.
The proposal of this Report -- that there be a uniform
allocation formula to apportion taxes among the States -- was
adopted by the Council of State Governments. See
Government 95. However no federal legislation has yet resulted.
In addition to the problem of conflict between apportionment
schemes of various States, it must be borne in mind that these
schemes cannot be regarded as abstract mathematical formulas, and
hence they must be closely scrutinized to ensure their fairness as
applied to a given situation. See Wallace v. Hines,
253 U. S. 66
Lest it be thought one formula of apportionment is clearly the
appropriate one, it should be noted that the Board's Report sets
forth three formulas proposed by responsible groups, in addition to
that recommended by the Board. And while Nebraska adopted the
factors recommended by the Board, it did not give them the same
weight which the Board's proposed formula did. See
H.R.Doc.No.141, 79th Cong., 1st Sess. 58.
With the exception of one plane which remains in Nebraska
overnight, all of the Company's planes remain in Nebraska for
periods of between five and twenty minutes each day. Considering
this brief time spent on the ground by planes which stop in
transit, more than a bare assertion that flight equipment is
"permanently" in Nebraska is called for to establish the requisite
permanence for taxing purposes.