Steamboats which ply between different ports on a navigable
river may, under a state statute, be taxed as personal property by
the city where the company owning them has its principal office,
and which is their home port, although they are duly enrolled and
licensed as coasting vessels under the laws of the United States,
and all fees and charges thereon, demandable under those laws, have
been duly paid.
This was an action of assumpsit brought for the recovery of the
tax paid under protest to the City of Wheeling, by the Wheeling,
Parkersburg, and Cincinnati Transportation Company, the owner of
certain steamboats used by it in navigating the Ohio between that
city and Parkersburg and the intermediate places on both sides of
the river, in the States of West Virginia and Ohio. The vessels
were of greater burden than twenty tons, and were duly enrolled and
licensed under the act of Congress. The company was incorporated
under the laws of West Virginia, and its stock was partly owned in
that state and partly in Ohio. Its principal office was in
Wheeling. The vessels started from that city on their voyages, and
when not running, were laid up there. They were assessed according
to their value as personal property of the company, and the tax was
collected under the laws of West Virginia, authorizing the city to
"assess, levy, and collect an annual tax for the use of the city on
personal property in the city." The right of the state to impose a
tax on such vessels was denied by the company, as in violation of
art. 1, sect. 10, par. 3, of the Constitution, which declares that
"no state shall, without the consent of Congress, lay any duty of
tonnage," and of art. 1, sect. 8, par. 3, which provides that
Congress shall have power "to regulate commerce with foreign
nations and among the several states, and with the Indian tribes."
The Court of Appeals of West Virginia held the tax in question not
to be within these provisions of the Constitution, and affirmed the
judgment in favor of the city rendered by the court of original
jurisdiction. The company sued out this writ.
Page 99 U. S. 276
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Power to impose taxes for legitimate purposes resides in the
states as well as in the United States; but the states cannot,
without the consent of Congress, lay any duty of tonnage, nor
Page 99 U. S. 277
can they levy any imposts or duties on imports or exports except
what may be absolutely necessary for executing their inspection
laws, as without the consent of Congress they are prohibited from
exercising any such power. Outside of those prohibitions the power
of the states extends to all objects within their sovereign power,
except the means and instruments of the federal government.
State Tonnage Tax
Cases, 12 Wall. 204.
Taxes levied by a state upon ships or vessels as instruments of
commerce and navigation are within the clause of the Constitution
which prohibits the states from levying any duty of tonnage without
the consent of Congress, and it makes no difference whether the
ships or vessels taxed belong to the citizens of the state which
levies the tax or to the citizens of another state, as the
prohibition is general, withdrawing altogether from the states the
power to lay any duty of tonnage under any circumstances, without
the consent of Congress.
Pending the controversy in the subordinate state court, the
parties by consent filed in the case an agreed statement of facts,
from which and the pleadings it appears that the plaintiffs
commenced an action of assumpsit against the defendants to recover
back certain sums of money which the latter involuntarily paid to
the former as taxes wrongfully assessed, as they allege, upon four
certain steamboats which they owned, and which for four years or
more they employed in carrying passengers and freight between the
port of Wheeling and other ports on the Ohio River.
It appears that the plaintiffs are an incorporated company
organized under the law of the state, and that the defendants are a
municipal corporation chartered as a city under the law of the same
state. Authority is vested in the city to assess, levy, and collect
an annual tax, under such regulations as they may prescribe by
ordinance, for the use of the city, on personal property in the
city, not to exceed in any one year fifty cents on every one
hundred dollars of the assessed valuation thereof. By the same law
it is provided that personal property shall be deemed to include
all subjects of taxation which the assessors, acting under the laws
of the state, are or shall be by law required to enter on their
books as such property for the purpose of state taxation. Pursuant
to that law, taxes were assessed
Page 99 U. S. 278
for the several years mentioned against the plaintiffs for the
appraised value of the four steamboats and the furniture of the
same, which they owned and used as aforesaid, it appearing that the
plaintiffs' principal place of business was Wheeling, and that
three of the steamboats were usually lying at the wharf or at the
bank of the river within the corporate limits of the city.
Throughout the whole period, each of the steamboats was duly
enrolled and licensed as coasting vessels under the laws of the
United States, and the agreed statement shows that the plaintiffs
paid for each all dues, fees, and charges which were properly
demandable under those laws. Payment of the taxes was made under
protest and in order to escape the seizure and sale of the
steamboats.
Service was made, and the parties having waived a jury and filed
an agreed statement of facts as before stated, submitted the case
to the court of original jurisdiction. Hearing was had, and the
court rendered judgment in favor of the defendants. Exceptions were
filed by the plaintiffs, and they removed the case into the supreme
court of the state, called the Court of Appeals, where the judgment
of the subordinate court was affirmed. Though defeated in both of
the state courts, the plaintiffs sued out the present writ of error
and removed the cause into this court.
Since the transcript was entered here, the plaintiffs have
assigned for error that the state Court of Appeals erred in holding
that the taxes levied are not within the constitutional prohibition
that no state, without the consent of Congress, shall lay any duty
of tonnage.
Ships or vessels of ten or more tons burden, duly enrolled and
licensed, if engaged in commence on waters which are navigable by
such vessels from the sea, are ships and vessels of the United
States, entitled to the privileges secured to such vessels by the
act for enrolling and licensing ships or vessels to be employed in
the coasting trade. 1 Stat. 205, 287.
Authorities to show that the states are prohibited from
subjecting any such ship or vessel to any duty of tonnage is
scarcely necessary, as that proposition is universally
admitted;
Page 99 U. S. 279
the only question which can properly arise in the case presented
for decision being whether the tax as imposed by state authority is
or is not a tonnage duty within the meaning of the Constitution.
Tonnage duties cannot be levied, but it is too well settled to
admit of question that taxes levied by a state, upon ships or
vessels owned by the citizens of the state, as property, based on a
valuation of the same as property, to the extent of such ownership,
are not within the prohibition of the Constitution.
Power to tax for the support of the state governments exists in
the states independently of the national government; and it may
well be assumed that where there is no cession of contradictory or
inconsistent jurisdiction in the United States, nor any restraining
compact in the Constitution, the power in the states to tax for the
support of the state authority reaches all the property within the
state which is not properly regarded as the instruments or means of
the federal government.
Nathan v.
Louisiana, 8 How. 73;
Brown v.
Maryland, 12 Wheat. 419;
Weston v.
City Council of Charleston, 2 Pet. 449.
Beyond question, these authorities show that all subjects over
which the sovereign power of a state extends are objects of
taxation, the rule being that the sovereignty of a state extends to
every thing which exists by its own authority or is introduced by
its permission, except those means which are employed by Congress
to carry into execution the powers given by the people to the
federal government, whose laws, made in pursuance of the
Constitution, are supreme.
McCulloch v.
Maryland, 4 Wheat. 429;
Savings Society v.
Coite, 6 Wall. 604.
Annual taxes upon ships and vessels for the support of the state
governments as property, upon a valuation as other personal
property, are everywhere laid; nor is it believed that it requires
much argument to prove that the opposite theory is unsound and
indefensible in principle, as it is contrary to the generally
received opinion, and wholly unsupported by any judicial
determination. Instead of that, there are many cases in which the
courts, in refuting the authority of the states to lay duties of
tonnage, have admitted that the owners of ships may be taxed to the
extent of their interest in the same, for the value of the
property. Assessments of the kind, when
Page 99 U. S. 280
levied for municipal purposes, must be made against the owner of
the property, and can only be made in the municipality where the
owner resides.
Though a ship, when engaged in the transportation of passengers,
said Mr. Chief Justice Taney, is a vehicle of commerce and within
the power of regulation granted to Congress, yet it has always been
held that the power to regulate commerce, as conferred, does not
give to Congress the power to tax the ship, nor prohibit the state
from taxing it as the property of the owner, when he resides within
their own jurisdiction, and he adds that the authority of Congress
to tax ships is derived from the express grant of power in the
eighth section of the first article, to lay and collect taxes,
duties, imports, and excises; and that the inability of the states
to tax the ship as an instrument of commerce arises from the
express prohibition contained in the tenth section of the same
article.
Passenger
Cases, 7 How. 283,
48 U. S.
479.
Support to that view is also derived from one of the numbers of
the federalist, which has ever been regarded as entitled to weight
in any discussion as to the true intent and meaning of the
provisions of our fundamental law. It is there maintained that no
right of taxation which the states had previously enjoyed was
surrendered, unless expressly prohibited, and that the right of the
states to tax was not impaired by any affirmative grant of power to
the general government; that duties on imports were a part of the
taxing power; and that the states would have had a right, after the
adoption of the Constitution, to lay duties on imports and exports
if they had not been expressly prohibited from doing so by that
instrument. Federalist, No. 32. From which it follows, if the
writer of that publication is correct, that the power granted to
regulate commerce did not prohibit the states from laying import
duties upon merchandise imported from foreign countries; that the
commercial clause does not apply to the right of taxation in either
sovereignty, the taxing power being a distinct and separate power
from the power to regulate commerce; and that the right of taxation
in the states remains over every subject where it before existed,
with the exception only of those expressly or impliedly
prohibited.
Page 99 U. S. 281
Neither imposts nor duties on imports or exports can be levied
by a state except what may be absolutely necessary for executing
its inspection laws, nor can a state levy any duty of tonnage
without the consent of Congress. State power of taxation is
doubtless very comprehensive, but it is not without limits, as
appears from what has already been remarked, to which it may be
added that state tax laws cannot restrain the action of the
national authority, nor can they abridge the operation of any law
which Congress may constitutionally pass. They may extend to every
object of value not excepted as aforesaid, within the sovereignty
of the state; but they cannot reach the means and instruments of
the federal government, nor the administration of justice in the
federal courts, nor the collection of the public revenue, nor
interfere with any constitutional regulation of Congress.
Power to tax its citizens or subjects in some form is an
attribute of every government, residing in it as part of itself,
and hence it follows that the power to tax may be exercised at the
same time upon the same objects of private property by the state
and by the United States, without inconsistency or repugnancy.
McCulloch v. Maryland, supra; 29 U. S.
Billings, 4 Pet. 514.
Such power exists in the state as one conferred or not
prohibited by the state Constitution, and in the Congress by
express grant. Hence the existence of such powers is perfectly
consistent, though the two governments in exercising the same act
entirely independent of each other as applied to the property of
the citizens.
Legislative power to tax, as a general proposition, extends to
all proper objects of taxation within the sovereign jurisdiction of
a state; but the power of a state of the Union to lay taxes does
not extend to the instruments of the national government, nor to
the constitutional means to carry into execution the powers
conferred by the federal Constitution. Tax laws of the state cannot
restrain the action of the national government, nor can they
circumscribe the operation of any constitutional act of Congress.
They may extend to every object of value belonging to the citizen
within the sovereignty of the state, not within the express
exemptions of the Constitution,
Page 99 U. S. 282
or those which are necessarily implied a falling within the
category of means or instruments to carry into execution the powers
granted by the fundamental law.
Day v. Buffington, 3
Cliff. 387.
Power to levy taxes, said Mr. Chief Justice Marshall, could not
be considered as abridging the right of the states on that subject,
it being clear that the states might have exercised the power to
levy duties on imports or exports had the Constitution contained no
prohibition upon the subject; from which he deduces the proposition
that the prohibition is an exception from the acknowledged power of
the states to levy taxes, and that the prohibition is not derived
from the power of Congress to regulate commerce.
Gibbons
v. Ogden, 9 Wheat. 201.
States, said Mr. Justice McLean, cannot regulate foreign
commerce; but he held in the same case that they may tax a ship or
other vessel used in commerce the same as other property owned by
its citizens, or they may tax the stages in which the mail is
transported, as that does not regulate the conveyance of the mail
any more than the taxing the ship regulates commerce, though he
admitted that the tax in both instances affected in some degree the
use of the property, which undoubtedly is correct.
Passenger
Cases, supra.
Enrolled vessels engaged in conveying passengers and freight,
which were owned by citizens of the State of New York, entered the
port of San Francisco, and while there were compelled to pay
certain taxes. Payment having been made under protest, the owners
of the vessels brought suit to recover back the amount, and Mr.
Justice Nelson, in disposing of the case here, in behalf of the
court, held
"that the vessels were not in any proper sense abiding within
the limits of California so as to become incorporated with the
other personal property of the state; that they were there but
temporarily engaged in lawful trade and commerce, with their situs
at the home port, where the vessels belonged and where the owners
were liable to be taxed for the capital invested, and where the
taxes had been paid,"
which shows to a demonstration that the owners of ships and
vessels are liable to taxation for their interest in the same upon
a valuation as for other personal property.
Hays v.
Pacific Mail Steamship Co., 17 How. 596.
Page 99 U. S. 283
Ships, when duly registered or enrolled, are instruments of
commerce, and are to be regarded as means employed by the United
States in execution of the powers of the Constitution, and
therefore they are not subject to state regulations.
Sinnot v.
Davenport, 22 How. 227.
Such instruments or means are not given by the people of a
particular state, but by the people of all the states, and upon
principle as well as authority should be subjected to that
government only which belongs to all.
Taxation, beyond all doubt, is the exercise of a sovereign
power, and it must be admitted that all subjects over which the
sovereign power of a state extends are objects of taxation; but it
is equally clear that those objects over which it does not extend
are exempt from state taxation -- from which it follows that the
means and instruments of the general government are exempt from
taxation.
McCulloch v. Maryland, supra.
Tonnage duties on ships by the states are expressly prohibited,
but taxes levied by a state upon ships or vessels owned by the
citizens of the state as property, based on a valuation of the same
as property, are not within the prohibition, for the reason that
the prohibition, when properly construed, does not extend to the
investments of the citizens in such structures.
Duties of tonnage, says Cooley, the states are forbidden to lay;
but he adds that the meaning of the prohibition seems to be that
vessels must not be taxed as vehicles of commerce, according to
capacity, it being admitted that they may be taxed like other
property. Cooley, Const.Lim. (4th ed.) 606.
"Vessels are taxable as property," says the same author; and he
adds that "possibly the tax may be measured by the capacity, when
they are taxed only as property and not as vehicles of commerce;"
which may be true if it clearly appears that the tax is to the
owner in the locality of his residence, and is not a tax upon the
ship as an instrument of commerce. Cooley, Taxation, 61.
"Whatever more general or more limited view may be entertained
of the true meaning of this clause," says Mr. Justice Miller,
"it is perfectly clear that a duty, tax, or burden imposed under
the authority of the state, which is by the law imposing it to be
measured by the capacity of the vessel, and
Page 99 U. S. 284
is in its essence a contribution claimed for the privilege of
arriving and departing from a port in the United States, is within
the prohibition."
Cannon v. New
Orleans, 20 Wall. 577;
Peete v.
Morgan, 19 Wall. 581;
State Tonnage Tax Cases,
supra.
Decided cases of the kind everywhere deny to the states the
power to tax ships as the instruments of commerce, but they all
admit, expressly or impliedly, that the state may tax the owners of
such personal property for their interest in the same.
Corresponding views are expressed by Mr. Burroughs in his valuable
treatise upon Taxation. He says that vessels of all kinds are
liable to taxation as property in the same manner as other personal
property owned by citizens of the state; that the prohibition only
comes into play where they are not taxed in the same manner as the
other property of the citizens, or where the tax is imposed upon
the vessel as an instrument of commerce, without reference to the
value as property. Burroughs, Taxation, 91;
Johnson v.
Drummond, 20 Gratt. (Va.) 419.
Property in ships and vessels, say the Court of Appeals of
Maryland, before the federal Constitution was adopted, was within
the taxing power of the state; and they held that such property
since that time, when belonging to a citizen of the state living
within her territory and subject to her jurisdiction, and protected
by the laws, is a part of his capital in trade, and, like other
property, is the subject of state taxation.
Howell v.
State, 3 Gill (Md.) 14;
Perry v. Torrence, 8 Ohio,
522.
Beyond all doubt, the taxes in this case were levied against the
owners as property, upon a valuation as in respect to all other
personal property, nor is it pretended that the taxes were levied
as duties of tonnage. Congress has prescribed the rates of
measurement and computation in ascertaining the tonnage of American
ships and vessels, and in the light of those regulations Burroughs
says that the word "tonnage" means the contends of the vessel
expressed in tons, each of one hundred cubical feet. P. 89.
Homans says that the word has long been an official term,
intended originally to express the burden that a ship would carry,
in order that the various dues and customs levied upon
Page 99 U. S. 285
shipping might be imposed according to the size of the vessel,
or rather in proportion to her capability of carrying burden.
Homan's Dict., Com. and Nav., Tonnage.
Tested by these definitions and the authorities already cited,
it is as clear as any thing in legal decision can be, that the
taxes levied in this case are not duties of tonnage, within the
meaning of the federal Constitution. Taken as a whole, the
contention of the plaintiffs is not that the taxes in question are
duties of tonnage, but their proposition is that ships and vessels,
when duly enrolled and licensed for the coasting trade, are not
subject to state taxation in any form, and that the owners of the
vessels cannot be taxed for the same as property, even when valued
as other personal property, as the basis of state or municipal
taxation.
Opposed as that theory is to the settled rule of construction,
that the commercial clause of the Constitution neither confers,
regulates, nor prohibits taxation, it is not deemed necessary to
give the theory much further consideration.
Gibbons v. Ogden,
supra. By that authority it is settled that the power to tax,
and the power to regulate and prohibit taxation, are given in the
Constitution by separate clauses, and that those powers are
altogether separate and distinct from the power to regulate
commerce; from which it follows as a necessary consequence that the
enrollment of a ship or vessel does not exempt the owner of the
same from taxation for his interest in the ship or vessel as
property, upon a valuation of the same, as in the case of other
personal property.
Judgment affirmed.