451 U.S. 942 (1981)

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U.S. Supreme Court


451 U.S. 942

Richard J. DAILEY, State Tax Commissioner of West Virginia
No. 80-500

Supreme Court of the United States

April 27, 1981

On petition for writ of certiorari to the Supreme Court of Appeals of West Virginia.

The petition for a writ of certiorari is denied.

Justice WHITE, with whom Justice BLACKMUN joins, dissenting.

Petitioner is a West Virginia corporation. It pays West Virginia property, capital stock, and income taxes. Petitioner's sole business is the operation and maintenance of a toll bridge across the Ohio River. The bridge spans the river between Newell, W. Va., and East Liverpool, Ohio. Two-thirds of the bridge is within West Virginia and one-third is within Ohio. The bridge has only one entrance and exit in each State and carries an equal volume of traffic in both directions. There is a single tollbooth, located on the Ohio side.

The West Virginia Business and Occupation Tax, W.Va.Code 11-13-2 ( 1974), imposes an annual privilege tax on persons, including corporations, measured by gross receipts. The statute, however, specifically exempts " gross income derived from commerce between this State and other states of the United States. . . ." 11-13-2d. Since 1933, petitioner has regularly reported all tolls collected in its operation of the bridge, but has claimed that this income falls within the exemption for income received from interstate commerce.

In January 1974, respondent assessed the corporation $83,000 in unpaid taxes, representing the tax due on the tolls received between 1968 and 1972. Petitioner appealed

Page 451 U.S. 942 , 943

this assessment and won a reversal. That decision, however, was subsequently reversed, and the tax reinstated, by the Supreme Court of Appeals of West Virginia.

That court held that the exemption for gross income derived from commerce between West Virginia and other States is identical in scope to the federal Interstate Commerce Clause: "If revenues from bridges are not covered by the federal constitution's commerce clause, they are not excepted from the statute." 266 S.E.2d 453, 454 (1980). To determine the scope of the federal Commerce Clause, the court relied on two prior decisions of this Court: Henderson Bridge Co. v. Kentucky, 166 U.S. 150 (1897), and Detroit International Bridge Co. v. Corporation Tax Appeal Board, 294 U.S. 83 ( 1935). In Henderson Bridge, the Court upheld a Kentucky tax on the intangible property of a Kentucky corporation, the business of which was the operation of a railroad bridge over the Ohio River between the Kentucky and Indiana shores. The West Virginia court relied on the following language from that opinion:

"Clearly the tax was not a tax on the interstate business carried on over or by means of the bridge, because the bridge company did not transact such business. That business was carried on by the persons and corporations which paid the bridge company tolls for the privilege of using the bridge." 166 U.S., at 153-154.

In Detroit International Bridge Co., the Court specifically relied on the above language to reach a similar conclusion. 294 U.S., at 86, 55 S. Ct., at 333. It upheld a state tax on a state corporation, the sole business of which was to operate and maintain a toll bridge across the Detroit River, from Detroit, Mich., to Ontario, Canada. In both cases, the Court held that the bridge itself was an "instrumentality which others may use in conducting foreign commerce," id., at 85, but that operation of the bridge was not itself interstate commerce.

The West Virginia court correctly noted that "Henderson [451 U.S. 942 , 944]

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