Appellant is a Pennsylvania corporation authorized to operate a
railroad only within Pennsylvania and having no tracks outside of
Pennsylvania. It owned freight cars which were used in ordinary
transport operations in three ways: (1) by appellant on its own
tracks in Pennsylvania; (2) by a New Jersey railroad on fixed
routes and regular schedules over that railroad's tracks in New
Jersey; and (3) by many other railroads on their own lines in
various parts of the country. Pennsylvania levied an annual
property tax on the total value of all freight cars owned by
appellant, and appellant challenged its right to do so under the
Commerce Clause and the Due Process and Equal Protection Clauses of
the Fourteenth Amendment.
Held:
1. Appellant could not avoid imposition of Pennsylvania's tax on
the full value of its freight cars merely by proving that some
determinable fraction of them were absent from the State for part
of the tax year. It must sustain the burden of proving that some
determinable portion of them may be similarly taxed in another
State. Pp.
370 U. S.
611-613.
2. Appellant's freight cars that had been run habitually on
fixed routes and regular schedules over the lines of the New Jersey
railroad in New Jersey were subject to the imposition of an
apportioned
ad valorem tax by the State of New Jersey, and
consequently the daily average of appellant's freight cars located
on the New Jersey railroad's lines during the tax year could not
constitutionally be included in the computation of this
Pennsylvania tax. Pp.
370 U. S.
613-614.
3. On the record in this case, Pennsylvania could
constitutionally tax at full value the remainder of appellant's
fleet of freight cars, including those used by other railroads in
other States, since appellant has failed to sustain its burden of
proving that a tax situs had been established elsewhere with
respect to such cars. Pp.
370 U.S.
614-617.
4. For the purposes of this tax, Pennsylvania could
differentiate between railroads having tracks which lay only within
its borders and those whose tracks were located both within and
without the
Page 370 U. S. 608
State, since such a classification would be reasonable and would
not violate the Equal Protection Clause of the Fourteenth
Amendment. Pp.
370 U. S.
617-618.
403 Pa. 419, 169 A.2d 878, affirmed in part and reversed in
part.
MR. JUSTICE HARLAN delivered the opinion of the Court.
In this case we must decide whether the Commonwealth of
Pennsylvania may, consistently with the Commerce Clause and the Due
Process and Equal Protection Clauses of the Fourteenth Amendment to
the Constitution of the United States, impose an annual property
tax on the total value of freight cars owned by the appellant, a
Pennsylvania corporation, despite the fact that a considerable
number of such cars spend a substantial portion of the tax year on
the lines of other railroads located outside the State. The Supreme
Court of Pennsylvania upheld the application of the State's Capital
Stock Tax, Purdon's Pa.Stat.Ann., 1949, Tit. 72, §§ 1871, 1901, to
the full value of all appellant's freight cars. [
Footnote 1] 403 Pa.
Page 370 U. S. 609
419, 169 A.2d 878. We postponed consideration of the question of
jurisdiction to the hearing on the merits, 368 U.S. 912, and now
find that the appeal is appropriately before us under 28 U.S.C. §
1257(2).
E.g., Standard Oil Co. v. Peck, 342 U.
S. 382.
We take the facts pertinent to decision from a stipulation
submitted by the parties to the trial court. The appellant is a
Pennsylvania corporation authorized to operate a railroad only
within the State. It has not been licensed to do business
elsewhere. The company's track runs from the anthracite coal region
in Pennsylvania to the Pennsylvania-New Jersey border at Easton,
where it connects with the lines of the Central Railroad Company of
New Jersey (hereinafter CNJ), a New Jersey corporation which owns
all the outstanding shares of appellant's stock.
In 1951, the year for which the tax was assessed, the appellant
owned 3,074 freight cars which were put to use in ordinary
transport operations in three ways: (1) by the appellant on its own
tracks; (2) by CNJ on that company's tracks in New Jersey; (3) by
other unaffiliated railroads on their own lines in various parts of
the country. CNJ's use of appellant's cars was pursuant to
operating agreements under which CNJ was obliged to pay a daily
rental equal to the then-effective rate prescribed by the
Association of American Railroads. In order to facilitate
interstate transportation by the interchange of equipment among
carriers, as prescribed by 49 U.S.C. § 1, pars. (4), (10), (12),
the members of the Association,
Page 370 U. S. 610
including the appellant, had entered into a separate "Car
Service and Per Diem Agreement" under which each subscriber was
authorized to use on its own lines the available freight cars of
other subscribers at the established
per diem rental.
Consequently, during 1951, many of the appellant's freight cars
were also used by other railroads on lines outside
Pennsylvania.
Appellant contended in the state courts, as it does here, that,
in computing its Pennsylvania capital stock tax, which is measured
by the value of such property as is not exempt from taxation (
note 1 supra), it was
constitutionally entitled to deduct from the value of its taxable
assets a proportional share reflecting the time spent by its
freight cars outside Pennsylvania. In support of this claim,
appellant offered a statistical summary of the use of its freight
cars during 1951, seeking to prove that a daily average of more
than 1,659 of its 3,074 cars were located on the lines of railroads
(including CNJ) which owned no track in Pennsylvania. [
Footnote 2]
It also claimed that a daily average of approximately 1,056
other cars had been used by railroads having lines both within and
without Pennsylvania. As to such cars, appellant sought to allocate
to Pennsylvania only such portions of their value as the combined
ratio of road miles of each user railroad's tracks within
Pennsylvania bore to its total road mileage throughout the United
States. [
Footnote 3]
Page 370 U. S. 611
These claims were disallowed by the Pennsylvania Board of
Finance and Revenue, by the Court of Common Pleas of Dauphin
County, and by the Supreme Court of Pennsylvania. [
Footnote 4] The state courts relied primarily
on this Court's decision in
New York Central & H. R.R. Co.
v. Miller, 202 U. S. 584,
which upheld the constitutionality of a domiciliary State's
ad
valorem property tax levied upon the full value of a
railroad's rolling stock, albeit "some considerable proportion of
the [railroad's] . . . cars always [was] absent from the state."
Id. at
202 U. S.
595.
I
Since
Miller, this Court has decided numerous cases
touching on the intricate problems of accommodating, under the Due
Process and Commerce Clauses, the taxing powers of domiciliary and
other States with respect to the instrumentalities of interstate
commerce. [
Footnote 5] None of
these decisions has weakened the pivotal holding in
Miller
-- that a railroad or other taxpayer owning rolling stock cannot
avoid the imposition of its domicile's property tax on the full
value of its assets merely by proving that some determinable
fraction of its property was absent from the State for part of the
tax year. This Court has consistently held that the State of
domicile retains jurisdiction
Page 370 U. S. 612
to tax tangible personal property which has "not acquired an
actual situs elsewhere."
Johnson Oil Refining Co. v.
Oklahoma, 290 U. S. 158,
290 U. S.
161.
This is because a State casts no forbidden burden upon
interstate commerce by subjecting its own corporations, though they
be engaged in interstate transport, to nondiscriminatory property
taxes. It is only "multiple taxation of interstate operations,"
Standard Oil Co. v. Peck, 342 U.
S. 382,
342 U. S. 385,
that offends the Commerce Clause. And obviously multiple taxation
is possible only if there exists some jurisdiction, in addition to
the domicile of the taxpayer, which may constitutionally impose an
ad valorem tax.
Nor does the Due Process Clause confine the domiciliary State's
taxing power to such proportion of the value of the property being
taxed as is equal to the fraction of the tax year which the
property spends within the State's borders.
Union Refrigerator
Transit Co. v. Kentucky, 199 U. S. 194,
held only that the Due Process Clause prohibited
ad
valorem taxation by the owner's domicile of tangible personal
property permanently located in some other State.
Northwest
Airlines, Inc. v. Minnesota, 322 U. S. 292,
reaffirmed the principle established by earlier cases that tangible
property for which no tax situs has been established elsewhere may
be taxed to its full value by the owner's domicile.
See New
York Central R. Co. v. Miller, supra; Southern Pacific Co. v.
Kentucky, 222 U. S. 63,
222 U. S. 69;
Johnson Oil Refining Co. v. Oklahoma, supra. If such
property has had insufficient contact with States other than the
owner's domicile to render any one of these jurisdictions a "tax
situs," it is surely appropriate to presume that the domicile is
the only State affording the "opportunities, benefits, or
protection" which due process demands as a prerequisite for
taxation.
See Ott v. Mississippi Valley Barge Line Co.,
336 U. S. 169,
336 U. S.
174.
Page 370 U. S. 613
Accordingly, the burden is on the taxpayer who contends that
some portion of its total assets are beyond the reach of the taxing
power of its domicile to prove that the same property may be
similarly taxed in another jurisdiction.
Cf. Dixie Ohio Express
Co. v. State Revenue Comm'n, 306 U. S. 72.
The controlling question here is, therefore, the same as it was
in
Standard Oil Co. v. Peck, 342 U.
S. 382, where the decision whether a state property tax
might constitutionally be imposed on the full value of a
domiciliary's moving assets turned on whether "a defined part of
the domiciliary corpus" -- there consisting of boats and barges
traveling along inland waters -- "could be taxed by the several
states on an apportionment basis." 342 U.S. at
342 U. S.
384.
Since the burden of proving an exemption is on the taxpayer who
claims it, we must consider whether the stipulated facts show that
some determinable portion of the value of the appellant's freight
cars had acquired a tax situs in a jurisdiction other than
Pennsylvania.
II
With respect to the freight cars that had been used on the lines
of CNJ during the taxable year, the stipulation establishes that
they "were run on fixed routes and regular schedules . . . over the
lines of CNJ . . . in New Jersey." Their habitual employment within
the jurisdiction in this manner would assuredly support New
Jersey's imposition of an apportioned
ad valorem tax on
the value of the appellant's fleet of freight cars.
Marye v.
Baltimore & Ohio R. Co., 127 U. S. 117,
127 U. S.
123-124;
Pullman's Palace Car Co. v.
Pennsylvania, 141 U. S. 18,
141 U. S. 23;
Union Refrigerator Transit Co. v. Lynch, 177 U.
S. 149;
Johnson Oil Refining Co. v. Oklahoma,
290 U. S. 158,
290 U. S.
162-163;
cf. 336 U. S.
Mississippi Valley Barge Line Co., 336 U.S.
Page 370 U. S. 614
169;
Braniff Airways, Inc. v. Nebraska Board of
Equalization, 347 U. S. 590,
347 U. S. 601.
Consequently, the daily average of freight cars located on the CNJ
lines in the 1951 tax year, 158 in number, could not
constitutionally be included in the computation of this
Pennsylvania tax. In this respect, the Pennsylvania Supreme Court's
decision (which is difficult to reconcile with its holding as to
the similarly situated locomotives,
note 4 supra) cannot be accepted.
III
We conclude, however, that, on the record before us,
Pennsylvania was constitutionally permitted to tax at full value
the remainder of appellant's fleet of freight cars, including those
used by other railroads under the Car Service and Per Diem
Agreement of the Association of American Railroads. These were, in
the language of the stipulation, "regularly, habitually and/or
continuously employed" in this manner, but they did not run "on
fixed routes and regular schedules," as did the cars used by
CNJ.
Since the domiciliary State is precluded from imposing an
ad
valorem tax on any property to the extent that it could be
taxed by another State, not merely on such property as is subjected
to tax elsewhere, the validity of Pennsylvania's tax must be
determined by considering whether the facts in the record disclose
a possible tax situs in some other jurisdiction. Had the record
shown that appellant's cars traveled through other States along
fixed and regular routes, even if it were silent with respect to
the length of time spent in each nondomiciliary State, it would
doubtless follow that the State through which the regular traffic
flowed could impose a property tax measured by some fair
apportioning formula.
Cf. Braniff Airways, Inc. v. Nebraska
Board of Equalization, 347 U. S. 590. And
this would render unconstitutional any domiciliary
ad
valorem tax at full value on property that could thus be
Page 370 U. S. 615
taxed elsewhere.
Standard Oil Co. v. Peck, supra, 342
U.S. at
342 U. S. 384.
[
Footnote 6]
Alternatively a nondomiciliary tax situs may be acquired even if
the rolling stock does not follow prescribed routes and schedules
in its course through the nondomiciliary State. In
American
Refrigerator Transit Co. v. Hall, 174 U. S.
70, this Court sustained the constitutionality of a
Colorado property tax on a stipulated average number of railroad
cars that had been located within the territorial limits of
Colorado during the tax year, although it was agreed by the parties
that the cars "never were run in said state in fixed numbers nor at
regular times, nor as a regular part of particular trains."
Id. at
174 U. S. 72.
Habitual employment within the State of a substantial number of
cars, albeit on irregular routes, may constitute sufficient contact
to establish a tax situs permitting taxation of the average number
of cars so engaged.
On the record before us, however, we find no evidence, except as
to the CNJ cars, of either regular routes through particular
nondomiciliary States or habitual presence, though on irregular
missions, in particular nondomiciliary States. It is not disputed
that many of the railroads listed as owning no track within
Pennsylvania do have lines in more than one State, but there is no
way of knowing which, if any, of these States may have acquired
taxing jurisdiction over some of appellant's freight cars. And
Page 370 U. S. 616
even with respect to railroads whose lines do not extent beyond
the borders of a single State, it cannot be determined whether
their use of appellant's cars was habitual, or merely sporadic.
[
Footnote 7] It must be obvious
that the fraction of a railroad's lines located within Pennsylvania
is wholly unilluminating as to the consistency with which that
railroad used appellant's cars in some other State.
In short, except as to freight cars traveling on the lines of
the CNJ, this record shows only that a determinable number of
appellant's cars were employed outside the Commonwealth of
Pennsylvania during the relevant tax year. But as this leaves at
large the possibility of their having a nondomiciliary tax situs
elsewhere, that showing does not suffice under our cases to exclude
Pennsylvania from taxing such cars to their full value. Neither
Union Refrigerator Transit Co. v. Kentucky, supra, nor
Standard Oil Co. v. Peck, supra, is properly read to the
contrary. In the former, the case was remanded for further
proceedings "not inconsistent" with the Court's opinion that the
cars in question, "so far as they were [permanently] located and
employed in other states," were not subject to the taxing power of
the domiciliary State. 199 U.S. at
199 U. S. 211.
In the latter, the existence of a tax situs in one or more
nondomiciliary States sufficiently appeared from the record.
Note 6 supra. To
accept the proposition that a mere general showing of continuous
use of movable property outside the domiciliary State is sufficient
to exclude the taxing power of
Page 370 U. S. 617
that State with respect to it, would surely result in an unsound
rule; in instances where it was ultimately found that a tax situs
existed in no other State, such property would escape this kind of
taxation entirely.
As we have shown, there is nothing to the contrary in
Standard Oil Co. v. Peck. Note 6 supra. And neither the
Braniff
nor
Ott case points to a different conclusion. In
Braniff, the airplanes held subject to nondomiciliary
taxation were shown by the record to have flown on fixed and
regular routes. 347 U.S. at
347 U. S.
600-601. In
Ott, the Court was careful to point
out that
"the statute 'was intended to cover,
and actually covers
here, an average portion of property permanently within the
State -- and by permanently is meant throughout the taxing
year.'"
336 U.S. at
336 U. S. 175.
(Emphasis added.) In the case before us, it is impossible to tell,
except as to cars of the lines of the CNJ, what the average number
of cars was annually in any given State.
IV
Finally, we think that the appellant's equal protection argument
is insubstantial, and that it was correctly rejected by the
Pennsylvania Supreme Court. For purposes of this tax, Pennsylvania
could reasonably differentiate between railroads having tracks
which lay only within its borders and those whose tracks were
located both within and without the State. The various
considerations that justify such a classification from a federal
constitutional standpoint need hardly be elaborated. It is
sufficient to note that the State might reasonably have concluded
that the probability of a nondomiciliary apportioned
ad
valorem tax on a railroad's total assets is greater if the
railroad maintains tracks in another State than if it does not. Or
it might have determined that the imposition of franchise or other
taxes by nondomiciliary States in which the railroad did business
compelled some
Page 370 U. S. 618
mitigation of the domiciliary's property tax in order to prevent
an oppressive tax burden. In either event, the possible basis for
the taxing measure's classification would be reasonable, and could
not be held to violate the Equal Protection Clause.
Cf. Allied
Stores of Ohio, Inc. v. Bowers, 358 U.
S. 522,
358 U. S.
526-528;
Stebbins v. Riley, 268 U.
S. 137,
268 U. S. 142;
Kidd v. Alabama, 188 U. S. 730.
Accordingly, we conclude that, with respect to all cars other
than those employed by CNJ on its lines in New Jersey, the
appellant has failed to sustain its burden of proving that a tax
situs had been acquired elsewhere. The exemption was properly
disallowed in this regard.
The judgment of the Supreme Court of Pennsylvania is vacated,
and the case is remanded for further proceedings not inconsistent
with this opinion.
It is so ordered.
MR. JUSTICE FRANKFURTER took no part in the decision of this
case.
MR. JUSTICE WHITE took no part in the consideration or decision
of this case.
[
Footnote 1]
The tax imposed by the state statute is denominated a "capital
stock tax," but it has been construed by the Pennsylvania courts as
being the equivalent of a property tax.
Pennsylvania v.
Standard Oil Co., 101 Pa. 119, 145;
Pennsylvania v. Union
Shipbuilding Co., 271 Pa. 403, 114 A. 257. Property employed
by a corporation in its operations in another State and permanently
located there is not subject to this tax.
Pennsylvania v.
American Dredging Co., 122 Pa. 386, 15 A. 443. The value of
the capital stock subjected to the tax is determined by multiplying
the total value of the capital stock, as measured by the worth of
all the corporation's real and personal property, by the ratio that
the value of such nonexempt property within Pennsylvania (including
that temporarily outside the State) bears to the value of the
corporation's property everywhere. Purdon's Pa.Stat.Ann., 1949,
Tit. 72, § 1896;
Pennsylvania v. Delaware, L. & W. R.
Co., 145 Pa. 96, 22 A. 157. With reference to this precise
taxing measure, this Court has said in the past that it, in
practical effect, amounts to "a tax upon the specific property
which gives the added value to the capital stock."
Delaware, L.
& W. R. Co. v. Pennsylvania, 198 U.
S. 341,
198 U. S.
357.
[
Footnote 2]
If appellant's entire fleet of cars (3,074) is multiplied by the
number of days in the year 1951 (365), the total number of "car
days" comes to 1,122,010. Appellant's schedules show that 605,678
"car days" were spent on railroads which owned no track in
Pennsylvania. If this latter number is divided by 365, the quotient
(1,659) represents the average number of cars located on such
railroads on any one day during 1951.
[
Footnote 3]
For example, appellant computes 91,899 "car days" as having been
spent on the lines of the New York Central Railroad. Since 7.36% of
that railroad's track mileage is within Pennsylvania, appellant
allocates 6,764 "car days," a proportional share, to
Pennsylvania.
[
Footnote 4]
The Supreme Court of Pennsylvania did find, however, that
certain diesel locomotives which had been leased to CNJ by the
appellant and which traveled along fixed routes and schedules had
acquired a tax situs in New Jersey, and could not be taxed at their
full value by Pennsylvania. The State has not sought review of this
part of that decision.
[
Footnote 5]
E.g., Southern Pac. Co. v. Kentucky, 222 U. S.
63;
Johnson Oil Refining Co. v. Oklahoma,
290 U. S. 158;
Northwest Airlines, Inc. v. Minnesota, 322 U.
S. 292;
Ott v. Mississippi Valley Barge Line
Co., 336 U. S. 169;
Standard Oil Co. v. Peck, 342 U.
S. 382;
Braniff Airways, Inc. v. Nebraska State
Board of Equalization, 347 U. S. 590.
See generally Developments, 75 Harv.L.Rev. 953,
979-987.
[
Footnote 6]
The record in
Standard Oil Co. v. Peck discloses that
the boats and barges which Ohio sought to tax had been traveling
along three regular routes on the Mississippi and Ohio Rivers: from
Memphis, Tennessee, to Mt. Vernon, Indiana; from Memphis,
Tennessee, to Bromley, Kentucky; and from Baton Rouge or Gibson's
Landing, Louisiana, to Bromley, Kentucky. The States in which the
vessels landed, as well as those through which they regularly
traveled, could undoubtedly have traced these regular trips and
levied appropriately apportioned
ad valorem taxes.
[
Footnote 7]
The fact that revenues for the use of one or more of appellant's
cars were accounted for by a subscriber to the "Car Service and Per
Diem Agreement" does not necessarily indicate that such cars were
ever used on the lines of that subscriber. For, under the
Agreement, subscribers were authorized to permit the use of another
railroad's cars by nonsubscribers, though they themselves remained
liable to the owner railroad for the
per diem rentals in
respect of their nonsubscriber use.
MR. JUSTICE BLACK, concurring.
In holding that one State's property tax may be invalidated in
part because excessive under the Commerce Clause upon the showing
of a risk that some other State could impose a tax on part of the
value of the same property, the Court is following principles
announced in prior decisions of this Court from which I dissented.
[
Footnote 2/1] While my views
expressed in those cases remain unchanged,
Page 370 U. S. 619
the necessity of this Court's deciding cases requires me to make
decisions under the constitutional doctrine there declared so long
as the Court remains committed to it. [
Footnote 2/2] Where a party seeks to invoke that
doctrine, as here, I wholly agree with the Court that the burden of
showing that there is a risk of multiple taxation should rest upon
the party challenging the constitutionality of a state tax. I also
agree with the Court that the railroad in this case his failed to
show a risk of multiple taxation with reference to any cars other
than the average number that are in New Jersey on any given day. It
is for the foregoing reasons that I concur in the Court's judgment
and its opinion insofar as it rests on the Commerce Clause.
Since I think partial invalidation of the tax as to the average
number of cars in New Jersey on any given day in the taxable year
is fully supported by the Commerce Clause as this Court has
interpreted it, I would have been content not to discuss the due
process question at all. But since the Court does rest in part on
due process, I find it necessary to express my doubts about the use
of the Due Process Clause to strike down state tax laws. The modern
use of due process to invalidate state taxes rests on two
doctrines: (1) that a State is without "jurisdiction to tax"
property beyond its boundaries, and (2) that multiple taxation of
the same property by different States is prohibited. Nothing in the
language or the history of the Fourteenth Amendment, however,
indicates any intention to establish either of these two doctrines
concerning the power of States to tax. In fact, neither of these
doctrines originated in the Due Process Clause at all, but were
first declared by this Court long before the Fourteenth Amendment,
with its Due Process Clause, was
Page 370 U. S. 620
adopted in 1868. [
Footnote 2/3]
And, in the first case striking down a state tax for lack of
jurisdiction to tax after the passage of that Amendment, neither
the Amendment nor its Due Process Clause nor any other
constitutional provision was even mentioned; the Court simply
struck down the state tax, saying that to sustain it would be
"giving effect to the acts of the legislature of Pennsylvania upon
property and interests lying beyond her jurisdiction." [
Footnote 2/4] These cases and others that
followed for many years after the adoption of the Amendment rested
either on the Commerce Clause or on no constitutional provision at
all. [
Footnote 2/5] In fact, not a
single state tax was struck down by this Court as a violation of
the Due Process Clause until 1903 [
Footnote 2/6] -- 35 years after the adoption of the
Amendment -- and then wholly without any historical or other
reasons to show why the cryptic words of the Due Process Clause
justified the invalidation of otherwise lawful state taxes. Nor did
the Court reveal its reasons for giving due process this meaning in
the next case. [
Footnote 2/7]
Finally, in the third case applying the Due Process Clause to
strike down a state tax, the Court's complete lack of explanation
led Mr. Justice Holmes to say:
"It seems to me that the result reached by the court probably is
a desirable one, but I hardly understand
Page 370 U. S. 621
how it can be deduced from the 14th Amendment; and, as the Chief
Justice feels the same difficulty, I think it proper to say that my
doubt has not been removed. [
Footnote
2/8]"
The Court has ever since used the Due Process Clause to strike
down state laws by finding in it substantially the same protection
for interstate commerce as it has found in the Commerce Clause.
[
Footnote 2/9] But there is no
reference to commerce in the Fourteenth Amendment, and the Court
has still never adequately explained just what the basis for
Page 370 U. S. 622
its constitutional doctrine is. Because of this, I have long
entertained many of the same doubts that Mr. Justice Holmes
expressed as to the use of this flexible and expansive
interpretation of due process to invalidate state tax laws,
[
Footnote 2/10] but, since the
Court's holding here adequately rests on the presently prevailing
interpretation of the Commerce Clause, I do not find this to be an
appropriate occasion to suggest reconsideration of the
applicability of the Due Process Clause to state tax laws.
[
Footnote 2/1]
See, e.g., Gwin, White & Prince, Inc. v. Henneford,
305 U. S. 434,
305 U. S. 442;
J. D. Adams Mfg. Co. v. Storen, 304 U.
S. 307,
304 U. S. 316.
See also Northwest Airlines v. Minnesota, 322 U.
S. 292,
322 U. S. 301
(concurring opinion).
[
Footnote 2/2]
Cf. Morgan v. Virginia, 328 U.
S. 373,
328 U. S. 386
(concurring opinion).
[
Footnote 2/3]
Hays v. Pacific Mail Steamship
Co., 17 How. 596 (1854).
See also The Apollon, 9
Wheat. 362,
22 U. S. 370
(1824);
Braniff Airways, Inc. v. Nebraska State Board of
Equalization, 347 U. S. 590,
347 U. S. 599
note 18.
[
Footnote 2/4]
Northern Central Railroad Co.
v. Jackson, 7 Wall. 262,
74 U. S. 268
(1869).
[
Footnote 2/5]
See, e.g., 78 U. S. Louis v.
Wiggins Ferry Co., 11 Wall. 423 (1871);
State Tax
on Foreign-Held Bonds, 15 Wall. 300 (1873);
Morgan v.
Parham, 16 Wall. 471 (1873);
Gloucester Ferry
Co. v. Pennsylvania, 114 U. S. 196
(1885).
See also Tappan v. Merchants' National
Bank, 19 Wall. 490 (1873);
Coe v. Town of
Errol, 116 U. S. 517
(1886);
Pullman's Palace Car Co. v. Pennsylvania,
141 U. S. 18
(1891).
[
Footnote 2/6]
Louisville & Jeffersonville Ferry Co. v. Kentucky,
188 U. S. 385.
[
Footnote 2/7]
Delaware, Lackawanna & Western R. Co. v.
Pennsylvania, 198 U. S. 341
(1905).
[
Footnote 2/8]
Union Refrigerator Transit Co. v. Kentucky,
199 U. S. 194,
199 U. S. 211
(1905). Professor Beale has said of this decision that
"[t]he dissent seemed sound as directed against the opinion that
the state had no jurisdiction. Nevertheless, Judge Holmes was
equally sound in saying that the result was a desirable one. It
would be a rash constitutional lawyer who would argue today that an
undesirable result was nevertheless constitutional."
1 Beale, Conflict of Laws, 522. The use of the Due Process
Clause as a method of striking down state tax laws remained a
source of concern to Mr. Justice Holmes throughout the remainder of
his service on the Court, and produced quite a number of dissents.
See, e.g., Safe Deposit & Trust Co. v. Virginia,
280 U. S. 83,
280 U. S. 96
(1929);
Farmers Loan & Trust Co. v. Minnesota,
280 U. S. 204,
280 U. S. 216
(1930) (overruling
Blackstone v. Miller, 188 U.
S. 189);
Baldwin v. Missouri, 281 U.
S. 586,
281 U. S. 595
(1930). In the
Baldwin case, he stated:
"I have not yet adequately expressed the more than anxiety that
I feel at the ever increasing scope given to the Fourteenth
Amendment in cutting down what I believe to be the constitutional
rights of the States. As the decisions now stand, I see hardly any
limit but the sky to the invalidating of those rights if they
happen to strike a majority of this Court as for any reason
undesirable."
281 U.S. at
281 U. S. 595.
See also Mr Justice, later Chief Justice, Stone's dissent
in
First National Bank of Boston v. Maine, 284 U.
S. 312,
284 U. S. 331,
in which he was joined by Mr. Justice Holmes and Mr. Justice
Brandeis and
State Tax Comm'n v. Aldrich, 316 U.
S. 174, where the Court overruled
First National
Bank for the reasons expressed by the dissent in that
case.
[
Footnote 2/9]
See H. P. Hood & Sons, Inc. v. Du Mond,
336 U. S. 525,
336 U. S. 562
(dissenting opinion).
[
Footnote 2/10]
See, e.g., Treichler v. Wisconsin, 338 U.
S. 251,
338 U. S. 257
(dissenting opinion);
Thomas v. Virginia, 364 U.
S. 443 (dissenting opinion).
MR. JUSTICE DOUGLAS, with whom THE CHIEF JUSTICE and MR. JUSTICE
STEWART join, dissenting in part.
The stipulations of fact in this case show that an average of
158 freight cars (of the value of $525,765.71) run on fixed routes
and regular schedules over railroad lines outside of Pennsylvania.
The Court properly holds that they are beyond the constitutional
reach of Pennsylvania.
The stipulations of fact also show that an average of 2189.30
freight cars (of the value of $7,282,773) run regularly,
habitually, and continuously on the lines of other railroads
outside of Pennsylvania, though not on fixed schedules. The
Pennsylvania tax on these cars is sustained on the authority of
New York Central & H. R.R. Co. v. Miller, 202 U.
S. 584, and if that case is still intact, the Court is
correct in denying the exemption claimed.
With all deference, we cannot, however, allow Pennsylvania to
lay this tax and adhere to our recent decisions. In
Ott v.
Mississippi Barge Line, 336 U. S. 169, we
allowed Louisiana and the City of New Orleans to levy
ad
valorem taxes on barges of foreign corporations even though
the barges were not permanently in those jurisdictions nor operated
there on fixed routes and regular schedules. The assessments
sustained were
"based on the ratio
Page 370 U. S. 623
between the total number of miles of appellees' lines in
Louisiana and the total number of miles of the entire line."
Id. at
336 U. S. 171.
We adopted for barge lines the rule applicable to railroads, saying
that we saw
"no practical difference so far as either the Due Process Clause
or the Commerce Clause is concerned whether it is vessels or
railroad cars that are moving in interstate commerce."
Id. at
336 U. S. 174.
We went on to say:
"The problem under the Commerce Clause is to determine 'what
portion of an interstate organism may appropriately be attributed
to each of the various states in which it functions.'
Nashville, C. & St. L. R. Co. v. Browning,
310 U. S.
362,
310 U. S. 365. 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 taxing State.
See
Wisconsin v. J. C. Penney Co., 311 U. S.
435,
311 U. S. 444. Those
requirements are satisfied if the tax is fairly apportioned to the
commerce carried on within the State."
Ibid.
We applied the decision in
Pullman's Palace Car Co. v.
Pennsylvania, 141 U. S. 18, to
barges, even though the
Pullman's Car case, as noted in
the
Miller case (202 U.S. at
202 U. S.
597), sustained a tax on capital stock where the "same
cars were continuously receiving the protection" of the
nondomiciliary taxing State. Nonetheless, in the
Ott
decision, we allowed the tax by the nondomiciliary State to be
levied on "an average portion of property permanently within the
State." 336 U.S. at
336 U. S.
175.
In
Standard Oil Co. v. Peck, 342 U.
S. 382, we completed the redefinition of the holding in
the
Miller decision which was implicit in what we wrote in
Ott. In the
Peck case, the domiciliary State was
held to have no power to tax barges, except on a formula "which
fairly apportioned the tax to the commerce carried on within the
state" (
id.
Page 370 U. S. 624
at
342 U. S.
383), as a result of which "inland water transportation"
was placed "on the same constitutional footing as other interstate
enterprises."
Id. at
342 U. S. 384.
We distinguished the
Miller case by saying that, there,
"it did not appear that
any specific cars or any average of
cars' was so continuously in another state as to be taxable there."
Id. at 342 U. S. 384.
And we went on to say:
"No one vessel may have been continuously in another state
during the taxable year. But we do know that most, if not all, of
them were operating in other waters, and therefore, under
Ott
v. Mississippi Barge Line Co., supra, could be taxed by the
several states on an apportionment basis. 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 the domicile.
See Union Refrigerator Transit Co. v. Kentucky,
199 U. S.
194. Otherwise, there would be multiple taxation of
interstate operations, and the tax would have no relation to the
opportunities, benefits, or protection which the taxing state gives
those operations."
Id. at
342 U. S.
384-385.
In
Braniff Airways, Inc. v. Nebraska State Board,
347 U. S. 590, we
allowed a nondomiciliary State to levy an apportioned
ad
valorem tax on aircraft making 18 stops per day in that State.
We said,
"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."
Id. at
347 U. S.
601.
As a result of the
Ott, Peck, and
Braniff
cases, the average of 2189.30 freight cars that run regularly,
habitually, and continuously on lines of other railroads outside
Pennsylvania could be taxed by other States, even though no State
can identify the precise cars within its borders and even though
the complement of cars is constantly
Page 370 U. S. 625
changing. Since that average of freight cars is regularly,
habitually, and continuously outside Pennsylvania, those cars are
taxable elsewhere, and thus beyond Pennsylvania's reach. The fact
that we do not know the average annual number of cars in any given
State does not help Pennsylvania's case. Whatever the average in
any one State, the total outside Pennsylvania and taxable elsewhere
is known and definite. Since that is true, we sanction double
taxation when we sustain this tax. We would not allow it in the
case of any other interstate business, and, as I read the
Constitution, no exception is made that puts the railroad business
at a disadvantage.