A Delaware merchandising corporation sells directly to customers
at its store in Delaware. It does not accept mail or telephone
orders, and makes no solicitation of customers other than by
newspaper, radio, and occasional direct mail advertising. Residents
of nearby Maryland come to the store and make purchases which they
take away or which are delivered to them in Maryland by common
carrier or by the store's own truck. Maryland lays upon its
residents an excise tax on "the use, storage, or consumption" in
the State of such articles, and it requires every vendor to collect
and remit the tax to the State. The Delaware store did not do this,
and a truck belonging to it was seized in Maryland and held liable
for the use tax on all goods sold to Maryland residents, however
delivered.
Held: The Maryland taxing act, as applied to this
Delaware store, violates the Due Process Clause of the Fourteenth
Amendment. Pp.
347 U. S.
341-347.
(a) Seizure of property by a State under pretext of taxation
when there is no jurisdiction or power to tax is confiscation, and
a denial of due process of law. P.
347 U. S.
342.
(b) The Delaware corporation, by its acts or course of dealing,
has not subjected itself to the taxing power of Maryland, and has
not afforded to that State a jurisdiction or power to impose upon
it a liability for collection of the Maryland tax. Pp.
347 U. S.
344-346.
(c) Due process requires some definite link, some minimum
connection, between a state and the person, property or transaction
it seeks to tax. Pp.
347 U. S.
344-345.
(d) Maryland could not have reached this Delaware vendor with a
sales tax on these sales, and cannot make them a basis for imposing
on the vendor liability for use taxes due from Maryland residents.
Pp.
347 U. S.
345-346.
(e)
General Trading Co. v. State Tar Comm'n,
322 U. S. 335,
distinguished. Pp. 346-
347 U. S.
347.
201 Md. 535, 95 A.2d 286, reversed and remanded.
Page 347 U. S. 341
Opinion of the Court by MR. JUSTICE JACKSON, announced by MR.
JUSTICE REED. *
Appellant is a Delaware merchandising corporation which only
sells directly to customers at its store in Wilmington, Delaware.
It does not take orders by mail or telephone. Residents of nearby
Maryland come to its store and make purchases, some of which they
carry away, some are delivered to them in Maryland by common
carrier, and others by appellant's own truck. Maryland lays upon
its residents an excise tax on "the use, storage or consumption" in
the State of such articles, [
Footnote 1] and it requires every vendor to collect and
remit the tax to the State. [
Footnote 2] This the appellant did not do. Finding
appellant's truck in Maryland, the State seized it, and the State's
highest court has held it liable for the use tax on all goods sold
in the Delaware store to Maryland residents, however delivered.
[
Footnote 3] This was against
appellant's timely contention that the Maryland taxing act, so
construed, conflicts with the federal commerce power and attempts
to extend the power of the State beyond its borders in violation of
the Due Process Clause of the Fourteenth Amendment. The parties
have stipulated facts in detail, and, so far as they seem
important, we set them forth in the Appendix. [
Footnote 4]
The grounds advanced by Maryland for holding the Delaware vendor
liable come to this: (1) the vendor's advertising with Delaware
papers and radio stations, though not especially directed to
Maryland inhabitants,
Page 347 U. S. 342
reached, and was known to reach, their notice; (2) its
occasional sales circulars mailed to all former customers included
customers in Maryland; (3) it delivered some purchases to common
carriers consigned to Maryland addresses; (4) it delivered other
purchases by its own vehicles to Maryland locations. The question
is whether these factors, separately or in the aggregate, in each
or all of the above types of sales, establish a state's power to
impose a duty upon such an out-of-state merchant to collect and
remit a purchaser's use tax.
It is a venerable, if trite, observation that seizure of
property by the State under pretext of taxation when there is no
jurisdiction or power to tax is simple confiscation, and a denial
of due process of law.
"No principle is better settled than that the power of a state,
even its power of taxation, in respect to property, is limited to
such as is within its jurisdiction."
New York, L.E. & W. R. Co. v. Pennsylvania,
153 U. S. 628,
153 U. S.
646.
"Where there is jurisdiction neither as to person nor property,
the imposition of a tax would be
ultra vires, and void. If
the legislature of a State should enact that the citizens or
property of another State or country should be taxed in the same
manner as the persons and property within its own limits and
subject to its authority, or in any other manner whatsoever, such a
law would be as much a nullity as if in conflict with the most
explicit constitutional inhibition. Jurisdiction is as necessary to
valid legislative as to valid judicial action."
St. Louis v. Wiggins Ferry
Co., 11 Wall. 423,
78 U. S.
430.
But visible territorial boundaries do not always establish the
limits of a state's taxing power or jurisdiction. In the last
twenty years, revenue needs have come to exceed the demands that
legislatures feel it expedient to make upon accumulated wealth or
property with fixed location within the state. The states therefore
have turned to taxing activities connected with the movement
Page 347 U. S. 343
of commerce, such as exchange and consumption. If there is some
jurisdictional fact or event to serve as a conductor, the reach of
the state's taxing power may be carried to objects of taxation
beyond its borders. When it has the taxpayer within its power or
jurisdiction, it may sometimes, through him, reach his
extraterritorial income or transactions. On the other hand, if it
has jurisdiction of his taxable property or transactions, it may
sometimes, through these, reach the nonresident. Whether this is
one of these cases, we must inquire.
We are dealing with a relatively new and experimental form of
taxation. [
Footnote 5] Taxation
of sales or purchases and taxation of use or possession of
purchases are complementary and related, but serve very different
purposes. The former, a fiscal measure of considerable importance,
has the effect of increasing the cost to the consumer of acquiring
supplies in the taxing state. The use tax, not in itself a
relatively significant revenue producer, [
Footnote 6] usually appears as a support to the sales
tax in two respects. One is protection of the state's revenues by
taking away from inhabitants the advantages of resort to untaxed
out-of-state purchases. The other is protection of local merchants
against out-of-state competition from those who may be enabled by
lower tax burdens to offer lower prices. In this respect, the use
tax has the same effect as a protective tariff becoming due not on
purchase of the goods, but at the moment of bringing them into the
taxing states. [
Footnote 7] The
collection of the use tax from inhabitants is a difficult
administrative problem, and if out-of-state vendors can be
compelled to collect it and remit it to the taxing state, it
simplifies administration. But this raises questions of great
importance to particular taxpayers, to the course of commercial
dealing among the states, and as to appropriation by other states
of tax resources properly belonging to the state where the event
occurs.
Page 347 U. S. 344
The practical and legal effect of the Maryland statute as it has
been applied to this Delaware vendor is to make the vendor liable
for a use tax due from the purchaser. In economic consequence, it
is identical with making him pay a sales tax. The liability arises
only because of a Delaware sale and is measured by its proceeds.
But, at the time of the sale, no one is liable for a Maryland use
tax. That liability arises only upon importation of the merchandise
to the taxing state, an event which occurs after the sale is
complete, and one as to which the vendor may have no control or
even knowledge, at least as to merchandise carried away by the
buyer. The consequence is that liability against the Delaware
vendor is predicated upon use of the goods in another state and by
another person. We do not understand the State to contend that it
could lay a use tax upon mere possession of goods in transit by a
carrier or vendor upon entering the State, nor do we see how such a
tax could be consistent with the Commerce Clause.
The question here is whether this vendor, by its acts or course
of dealing, has subjected itself to the taxing power of Maryland,
or whether it has afforded that State a jurisdiction or power to
create this collector's liability. Despite the increasing frequency
with which the question arises, little constructive discussion can
be found in responsible commentary as to the grounds on which to
rest a state's power to reach extraterritorial transactions or
nonresidents with tax liabilities. Our decisions are not always
clear as to the grounds on which a tax is supported, especially
where more than one exists, nor are all of our pronouncements
during the experimental period of this type of taxation consistent
or reconcilable. A few have been specifically overruled, while
others no longer fully represent the present state of the law. But
the course of decisions does reflect at least consistent adherence
to one time-honored concept: that due process requires some
Page 347 U. S. 345
definite link, some minimum connection, between a state and the
person, property, or transaction it seeks to tax.
Thus, the Court has frequently held that domicile or residence,
more substantial than mere presence in transit or sojourn, is an
adequate basis for taxation, including income, [
Footnote 8] property, [
Footnote 9] and death [
Footnote 10] taxes. Since the Fourteenth Amendment makes
one a citizen of the state wherein he resides, the fact of
residence creates universally reciprocal duties of protection by
the state and of allegiance and support by the citizen. The latter
obviously includes a duty to pay taxes, and their nature and
measure is largely a political matter. Of course, the situs of
property may tax it regardless of the citizenship, domicile, or
residence of the owner, the most obvious illustration being a tax
on realty laid by the state in which the realty is located.
[
Footnote 11] Also, the
keeping of tangible [
Footnote
12] or intangible [
Footnote
13] personalty within a state may give it a similar taxable
situs there (sometimes called a business or commercial situs or
domicile). Certain activities or transactions carried on within a
state, such as the use [
Footnote
14] and sale [
Footnote
15] of property may give jurisdiction to tax whomsoever engages
therein, and the use of highways may subject the use to certain
types of taxation. [
Footnote
16] These cases overlap with those in which incorporation by a
state [
Footnote 17] or
permission to do business there [
Footnote 18] forms the basis for proportionate taxation
of a company, including its franchise, capital, income, and
property. Recent cases in which a taxable sale does not clearly
take place within the taxing state, elements of the transaction
occurring in different states, have presented peculiar
difficulties, [
Footnote 19]
as have those where the party liable for a use tax does not use the
product within the taxing state. [
Footnote 20]
We are unable to find in any of our cases a precedent for
sustaining the liability asserted by Maryland here. In accordance
with the principles of earlier cases, it was recently settled that
Maryland could not have reached
Page 347 U. S. 346
this Delaware vendor with a sales tax on these sales.
McLeod
v. J. E. Dilworth Co., 322 U. S. 327. Can
she then make the same Delaware sales a basis for imposing on the
vendor liability for use taxes due from her own inhabitants? It
would be a strange law that would make appellant more vulnerable to
liability for another's tax than to a tax on itself.
The decisions relied upon by Maryland do not, in our view,
support her. This is not the case of a merchant entering a state to
maintain a branch and engaging in admittedly taxable retail
business but trying to allocate some part of his total sales to
nontaxable interstate commerce. Under these circumstances, the
State has jurisdiction to tax the taxpayer, and all that he can
question on Due Process or Commerce Clause grounds is the validity
of the allocation.
Cf. Nelson v. Montgomery Ward &
Co., 312 U. S. 373;
Nelson v. Sears, Roebuck & Co., 312 U.
S. 359;
Norton Co. v. Department of Revenue,
340 U. S. 534.
The nearest support for Maryland's position is
General
Trading Co. v. State Tax Comm'n, 322 U.
S. 335. The writer of this opinion dissented in that
case and, whether or not in so doing he made a correct application
of principles of jurisdiction to the particular facts, it is clear
that circumstances absent here were there present to justify the
Court's approval of liability for collecting the tax. That was the
case of an out-of-state merchant entering the taxing state through
traveling sales agents to conduct continuous local solicitation
followed by delivery of ordered goods to the customers, the only
nonlocal phase of the total sale being acceptance of the order.
Probably, except for credit reasons, acceptance was a mere
formality, since one hardly incurs the cost of soliciting orders to
reject. The Court could properly approve the State's decision to
regard such a rivalry with its local merchants as equivalent to
being a local merchant. But
Page 347 U. S. 347
there is a wide gulf between this type of active and aggressive
operation within a taxing state and the occasional delivery of
goods sold at an out-of-state store with no solicitation other than
the incidental effects of general advertising. Here was no invasion
or exploitation of the consumer market in Maryland. On the
contrary, these sales resulted from purchasers traveling from
Maryland to Delaware to exploit its less tax-burdened selling
market. That these inhabitants incurred a liability for the use tax
when they used, stored, or consumed the goods in Maryland no one
doubts. But the burden of collecting or paying their tax cannot be
shifted to a foreign merchant in the absence of some jurisdictional
basis not present here.
In this view of the case, we need not consider whether the
statute imposes an unjustifiable burden upon interstate
commerce.
The judgment appealed from is reversed, and the case remanded
for further proceedings not inconsistent herewith.
Reversed and remanded.
[
Footnote 1]
The statute reads:
"An excise tax is hereby levied and imposed on the use, storage
or consumption in this State of tangible personal property
purchased from a vendor within or without this State on or after
the effective date of this Act, for use, storage or consumption
within this State. The tax imposed by this section shall be paid by
the purchaser, and shall be computed as follows: . . ."
Flack's Md.Ann.Code, 1951, Art. 81, § 369.
[
Footnote 2]
"Every vendor engaging in business in this State and making
sales of tangible personal property for use, storage or consumption
in this State which are taxable under the provisions of this
subtitle at the time of making such sales, or if the use, storage
or consumption is not then taxable hereunder at the time when such
use, storage, or
Page 347 U. S. 348
consumption becomes taxable hereunder, shall collect the tax
imposed by this subtitle from the purchaser."
Flack's Md.Ann.Code, 1951, Art. 81, § 371.
"As used in this sub-title, the following terms shall mean or
include:"
"
* * * *"
"(k) 'Engaged in business in this State' means the selling or
delivering in this State, or any activity in this State in
connection with the selling or delivering in this State, of
tangible personal property for use, storage or consumption within
this State. This term shall include, but shall not be limited to,
the following acts or methods of transacting business."
"(1) The maintaining, occupying or using, permanently or
temporarily, directly or indirectly, or through a subsidiary or
agent, by whatever name called, of any office, place of
distribution, sales or sample room or place, warehouse or storage
place, or other place of business."
"(2) The having of any representative, agent, salesman,
canvasser, or solicitor operating in this State for the purpose of
selling, delivering, or the taking of orders for any tangible
personal property."
Flack's Md.Ann.Code, Art. 81, § 368.
"Every vendor required or permitted to collect the tax shall
collect the tax imposed by the provision of this sub-title,
notwithstanding the following:"
"(a) That the purchaser's order or the contract of sale is
delivered, mailed, or otherwise transmitted by the purchaser to the
vendor at a point outside of this State as a result of solicitation
by the vendor through the medium of a catalog or other written
advertisement; or"
"(b) That the purchaser's order or contract of sale made or
closed by acceptance or approval outside of this State or before
said tangible personal property enters this State; or"
"(c) That the purchaser's order or contract of sale provides
that said property shall be, or it is in fact, procured or
manufactured at a point outside of this State and shipped directly
to the purchaser from the point of origin; or"
"(d) That said property is mailed to the purchaser in this State
from a point outside this State or delivered to a carrier at a
point outside this State, F.O.B., or otherwise, and directed to the
vendor in this State, regardless of whether the cost of
transportation is paid by the vendor or by the purchaser; or"
"(e) That said property is delivered directly to the purchaser
at a point outside this State, if it is intended to be brought to
this State
Page 347 U. S. 349
for use, storage or consumption in this State."
Flack's Md.Ann.Code, Art. 81, § 373.
"The vendor and any other officer of any corporate vendor
required or permitted to collect the tax imposed by this subtitle
shall be personally liable for the tax collected, and such vendor
shall have the same right in respect to collecting the tax from the
purchaser, or in respect to nonpayment of the tax by the purchaser,
as if the tax were a part of the purchase price of the property and
payable at the time of the sale. Any vendor who fails to collect
the tax pursuant to this subtitle and the regulations prescribed
hereunder shall, in addition to all other penalties, be personally
liable to the State for the amount uncollected."
Flack's Md.Ann.Code, 1951, Art. 81, § 375.
[
Footnote 3]
Miller Brothers Co. v. Maryland, 201 Md. 535, 95 A.2d
286.
[
Footnote 4]
"It is hereby stipulated and agreed by and between the attorneys
for the above named parties and on their behalf that:"
"1. Defendant, Miller Brothers Company, is a corporation
organized and existing under the laws of the State of Delaware with
its principal place of business at Ninth and King Streets,
Wilmington, Delaware. It has no resident agent in Maryland."
"2. Defendant is and for all times material to this suit has
been engaged in the retail household furniture business by selling
its merchandise from its only retail store located in Wilmington,
Delaware."
"3. The only methods of advertising used by the Defendant are
the following:"
"(a)
Radio and Television. The Defendant has engaged in
no radio or television advertising of any sort, anywhere, since
January 1, 1951. Prior to that date, the Defendant had limited
radio advertising over the Wilmington, Delaware, stations. In the
fall of 1950, for a period of about six weeks, the Defendant had a
small amount of television advertising over Station WDEL-TV in
connection with the broadcasting of football scores. The facilities
of those stations are located in Delaware entirely. In the radio
and television advertising, the Defendant has never had any script
or copy which made an appeal for out-of-state business or in any
way was designed directly or indirectly to appeal particularly to
Maryland residents. The radio slogan adopted by the Defendant was
'Furniture Fashion Makers for Delaware'."
"(b)
Newspapers. The Defendant advertises regularly in
the Wilmington Morning News and the Wilmington Journal every
evening. It also advertises occasionally in the Wilmington Sunday
Star. All of these newspapers are published in Wilmington, and
Page 347 U. S. 350
undoubtedly have some circulation in some portions of Maryland.
The volume of such circulation is unknown to either the Plaintiff
or the Defendant. In its newspaper advertising, the Defendant has
never used advertising copy which mentions Maryland customers or is
prepared for the purpose of directly or indirectly making any
special appeal to the Maryland customers. No advertising has ever
been done by the Defendant in any newspapers published in
Maryland."
"(c)
Use of the Mails. The Defendant uses an automatic
card mailing system, and with this system distributes about four
pieces a year. These mailing pieces go out to everyone who has
purchased from the Defendant and whose name and address is on the
Defendant's records. This means that Maryland residents do receive
these mailing pieces, but no specific advertising copy has ever
been sent through the mails for the specific purpose of attracting
Maryland buyers. No advertising copy has been sent to Maryland
buyers alone, and the only advertising copy which these Maryland
buyers receive is that which is sent to all customers whose names
and addresses are on the records."
"4. Defendant has made and does make certain sales of tangible
personal property, some of which sales being the subject matter of
this action, to residents of the State of Maryland, who have used,
consumed or stored or will use, consume, or store the purchased
personal property in the State of Maryland."
"5. The transactions between the Defendant and the said Maryland
purchasers are and have been as follows:"
"(a) It is the Defendant's policy never to accept telephone
orders. Most of the merchandise sold by the Defendant requires
personal inspection and selection, and it is for this reason that
telephone orders are refused. The Defendant maintains no mail-order
business and does not make use of coupons in connection with its
newspaper advertising."
"(b) The purchaser appears at Defendant's retail store, located
in Wilmington, Delaware. In about thirty per cent (30%) of the
sales, the exact item selected by the customer is tagged in the
store and that same item is delivered to the customer from the
store, in Wilmington, Delaware. In the remainder of the sales, an
item identical to that selected by the customer is delivered from
the Defendant's storeroom or warehouse in Wilmington,
Delaware."
"(c) Delivery is made in one of three ways, and no other:"
"(1) The article is taken away by the purchaser. Within the
taxable period of July 1, 1947, through December 31, 1951,
tangible
Page 347 U. S. 351
personal property sold for at least $2,500 was delivered in this
manner."
"(2) The article is delivered in Maryland to the purchaser in a
motor vehicle owned and operated by Defendant, directly from
Defendant's store in Wilmington, Delaware, to the residence of the
Maryland purchaser. The cost of the delivery in such a case is
borne by Defendant, and no charge therefor is made to the
purchaser. Within the taxable period July 1, 1947, through December
31, 1951, tangible personal property sold for at least $8,000 was
delivered in this manner."
"(3) The article is delivered in Maryland to the purchaser by
common carrier to which delivery is made by Defendant in
Wilmington, Delaware. Such common carrier is usually an independent
trucking line authorized to do business as a commercial carrier by
the Interstate Commerce Commission. The cost of the delivery in
such a case is borne by the Defendant, and no charge therefor is
made to the purchaser. Within the taxable period July 1, 1947,
through December 31, 1951, tangible personal property sold for at
least $1,500 was delivered in this manner."
"6. (a) Payment for some purchases is completed at the time the
purchaser appears at the Defendant's retail store and prior to the
delivery."
"(b) The Defendant does make sales to some Maryland residents on
credit in exactly the same way as it sells to Delaware residents on
credit. In the case of most of such credit sales to Maryland
customers, the Defendant enters into conditional sales contracts
with its Maryland customers in the same way that it enters into
conditional sales contracts with its Delaware customers. In many
other instances, the Defendant notes the terms of the credit
transaction on the sales slip without requiring a conditional sales
agreement, and this method of business is used without any
distinction between Maryland and Delaware customers. This method is
frequently designated as a 60 or 90-day charge account. At no time
within the past eight years has the Defendant ever recorded its
conditional sales contracts in Maryland."
"(c) The Defendant has never repossessed by legal process any
furniture or other merchandise for any customers in Maryland or
elsewhere within the last fifteen years. The Defendant has on
occasion accepted back merchandise which has not been satisfactory
to the customer. In the event of delinquency in payments, the
Defendant uses collection letters, which are sent through the
mails. During the past ten years, the Defendant has never
instituted legal
Page 347 U. S. 352
action through a Magistrate's or other Court in Maryland, nor
has it in that period used a collection agent in Maryland. The
Defendant employs no collectors. The Maryland customers make
payments to the Defendant personally at the store in Wilmington,
Delaware, or by check, cash or money order sent through the
mails."
"(d) No C.O.C. deliveries are made."
"7. Except to the extent, if any, disclosed above, Defendant
does not maintain, occupy or use, nor has it ever in the past
maintained, occupied or used, permanently or temporarily, directly
or indirectly, or through a subsidiary or agent, by whatever name
called, any office, branch, place of distribution, sales or sample
rooms or place, warehouse or storage place, or other place of
business in the State of Maryland."
"8. Except to the extent, if any, disclosed above, defendant
does not have, nor has it ever had, any representative, agent,
salesman, canvasser or solicitor operating in the State of Maryland
for the purpose of selling or taking any orders for tangible
personal property, or delivering the same."
"9. Defendant is not, nor has it ever been, qualified or
registered to do business in the State of Maryland."
"10. On or about March 10, 1952, the Comptroller of the State of
Maryland assessed a deficiency in Use Tax against the Defendant in
the amount of $356.40, $240.00 thereof representing the use tax
claimed to be due, $32.40 thereof as interest claimed to be due and
$84.00 thereof as a penalty claimed to be due for the tax period
from July 1, 1947, through December 31, 1951, based upon all the
sales referred to in paragraph 5 above."
"11. Defendant has not applied for a permit nor been authorized
by the Comptroller to collect any use tax under Section 312 of
Article 81 of the Annotated Code of Maryland (1947 Supp.)."
"12. Defendant has not applied for, nor paid the license fee
required to obtain, nor has been issued, a license pursuant to
Sections 331-333 of Article 81 of the Annotated Code of Maryland
(1947 Supp.)."
"13. Except as indicated above, Defendant does not engage and
has not engaged in any activities in the State of Maryland."
[
Footnote 5]
Criz, The Use Tax, 1 (Public Administration Service No. 78,
1941); Hellerstein, State and Local Taxation, 4-12, 338; Haig and
Shoup, The Sales Tax in the American States, 83 (1934).
[
Footnote 6]
Criz,
supra, at 3-4, 36-39. For an example of the
revenue features in a particular state,
see McLees, The
Use Tax After One Year, 4 Ark.L.Rev. 337, 339 (1950).
Page 347 U. S. 353
[
Footnote 7]
Criz,
supra, at 1-2; Hellerstein,
supra, at
116, 408-409, 418; Jacoby, Retail Sales Taxation, c. VI (1938).
[
Footnote 8]
Maguire v. Trefry, 253 U. S. 12;
Lawrence v. State Tax Comm'n, 286 U.
S. 276;
New York ex rel. Cohn v. Graves,
300 U. S. 308;
Guaranty Trust Co. v. Virginia, 305 U. S.
19.
The collection of cases in footnotes
8 through 20 is not intended as a guide to their holdings
but only as an illustration of the types of jurisdictional
standards sanctioned at one time or another by the Court.
[
Footnote 9]
Most of these cases deal with intangible property, and apply the
maxim
mobilia sequuntur personam. Kirtland v.
Hotchkiss, 100 U. S. 491;
Darnell v. Indiana, 226 U. S. 390;
Hawley v. City of Malden, 232 U. S.
1;
Fidelity & Columbia Trust Co. v.
Louisville, 245 U. S. 54;
Citizens National Bank v. Durr, 257 U. S.
99;
Klein v. Board of Tax Supervisors,
282 U. S. 19,
282 U. S. 24;
Greenough v. Tax Assessors of Newport, 331 U.
S. 486.
See Nevada Bank v. Sedgwick,
104 U. S. 111;
Bonaparte v. Tax Court, 104 U. S. 592,
104 U. S. 595;
Sturges v. Carter, 114 U. S. 511,
114 U. S. 521;
Dewey v. Des Moines, 173 U. S. 193;
Kidd v. Alabama, 188 U. S. 730,
188 U. S.
731.
[
Footnote 10]
Blackstone v. Miller, 188 U. S. 189;
Bullen v. Wisconsin, 240 U. S. 625;
Blodgett v. Silberman, 277 U. S. 1;
Farmers Loan & Trust Co. v. Minnesota, 280 U.
S. 204;
Baldwin v. Missouri, 281 U.
S. 586;
Beidler v. South Carolina Tax Comm'n,
282 U. S. 1;
First National Bank of Boston v. Maine, 284 U.
S. 312;
Curry v. McCanless, 307 U.
S. 357;
Graves v. Elliott, 307 U.
S. 383;
Graves v. Schmidlapp, 315 U.
S. 657;
Central Hanover Bank & Trust Co. v.
Kelly, 319 U. S. 94.
See Carpenter v.
Pennsylvania, 17 How. 456;
Wachovia Bank &
Trust Co. v. Doughton, 272 U. S. 567;
Burnet v. Brooks, 288 U. S. 378,
288 U. S.
400-405;
cf. Worcester County Trust Co. v.
Riley, 302 U. S. 292;
Pearson v. McGraw, 308 U. S. 313.
See also Keeney v. Comptroller of New York, 222 U.
S. 525,
222 U. S. 537,
which involved an excise tax on an
inter vivos transfer of
stocks and bonds.
[
Footnote 11]
The Court has never had a case in which a state attempted a
direct tax on land located in another state.
See Union
Refrigerator Transit Co. v. Kentucky, 199 U.
S. 194,
199 U. S. 204.
Instead, the cases in point speak of the problem by way of dicta or
deal with interests attached to the realty, such as incorporeal
hereditaments.
See Witherspoon v.
Duncan, 4 Wall. 210;
In re
State Tax on Foreign-Held Bonds, 15 Wall. 300,
82 U. S. 319;
Savings & Loan Society v. Multnomah County,
169 U. S. 421;
Paddell v. City of New York, 211 U.
S. 446;
First National Bank v. Maine,
284 U. S. 312,
284 U. S. 326;
Senior v.
Branden, 295
Page 347 U. S. 354
U.S. 422.
Cf. Louisville & Jeffersonville Ferry Co. v.
Kentucky, 188 U. S. 385;
Central R. Co. v. Jersey City, 209 U.
S. 473.
[
Footnote 12]
Coe v. Errol, 116 U. S. 517,
116 U. S. 524;
Adams Express Co. v. Ohio State Auditor, 165 U.
S. 194,
165 U. S.
226-227;
American Refrigerator Transit Co. v.
Hall, 174 U. S. 70;
Union Refrigerator Transit Co. v. Lynch, 177 U.
S. 149;
Carstairs v. Cochran, 193 U. S.
10;
Old Dominion S.S. Co. v. Virginia,
198 U. S. 299;
Hannis Distilling Co. v. Mayor and City Council,
216 U. S. 285;
Johnson Oil Refining Co. v. Oklahoma ex rel. Mitchell,
290 U. S. 158;
City Bank Farmers Trust Co. v. Schnader, 293 U.
S. 112;
Ott v. Mississippi Valley Barge Line
Co., 336 U. S. 169.
See Hays v. Pacific Mail S.S.
Co., 17 How. 596;
City of
St. Louis v. Wiggins Ferry Co., 11 Wall. 423;
Morgan v.
Parham, 16 Wall. 471;
Gloucester Ferry Co. v.
Pennsylvania, 114 U. S. 196,
114 U. S.
210-211;
Marye v. Baltimore & O. R. Co.,
127 U. S. 117,
127 U. S. 123;
Pullman's Palace Car Co. v. Pennsylvania, 141 U. S.
18,
141 U. S. 22;
Pittsburgh, C., C. & St. L. R. Co. v. Backus,
154 U. S. 421,
154 U. S.
427-428;
Henderson Bridge Co. v. Henderson
City, 173 U. S. 592,
173 U. S. 609,
173 U. S. 613,
173 U. S. 622
(bridge);
Diamond Match Co. v. Ontonagon, 188 U. S.
82;
Fargo v. Hart, 193 U.
S. 490;
Delaware, L. & W. R. Co. v.
Pennsylvania, 198 U. S. 341;
Union Refrigerator Transit Co. v. Kentucky, 199 U.
S. 194;
Thompson v. Kentucky, 209 U.
S. 340,
209 U. S. 347;
Gromer v. Standard Dredging Co., 224 U.
S. 362,
224 U. S.
371-372;
Wells, Fargo & Co. v. Nevada,
248 U. S. 165,
248 U. S. 167;
Union Tank Line Co. v. Wright, 249 U.
S. 275;
Frick v. Pennsylvania, 268 U.
S. 473;
Treichler v. Wisconsin, 338 U.
S. 251;
Standard Oil Co. v. Peck, 342 U.
S. 382. Whether the property is sufficiently situated in
the state to become part of the general mass of taxable property,
or whether it is merely in transit, is frequently treated as an
interstate commerce question, rather than a jurisdictional one.
E.g., Brown v. Houston, 114 U. S. 622,
114 U. S.
632-633;
Pittsburg & Southern Coal Co. v.
Bates, 156 U. S. 577,
156 U. S.
588-589;
Kelley v. Rhoads, 188 U. S.
1;
General Oil Co. v. Crain, 209 U.
S. 211;
Champlain Realty Co. v. Brattleboro,
260 U. S. 366. As
to the situs of personalty within various counties of a single
state,
see Columbus Southern R. Co. v. Wright,
151 U. S. 470.
[
Footnote 13]
Tappan v. Merchants' National
Bank, 19 Wall. 490,
86 U. S.
499-500;
Adams Express Co. v. Ohio State
Auditor, 166 U. S. 185;
City of New Orleans v. Stempel, 175 U.
S. 309;
Bristol v. Washington County,
177 U. S. 133;
State Board of Assessors v. Comptoir National D'Escompte,
191 U. S. 388;
Metropolitan Life Ins. Co. v. New Orleans, 205 U.
S. 395;
Liverpool & London & Globe Ins. Co.
v. Board of Assessors, 221 U. S. 346;
Orient Ins. Co. v. Board of Assessors, 221 U.
S. 358;
Wheeler v. Sohmer, 233 U.
S. 434;
Rogers v. Hennepin
County, 240
Page 347 U. S. 355
U.S. 184;
Iowa v. Slimmer, 248 U.
S. 115;
Safe Deposit & Trust Co. v.
Virginia, 280 U. S. 83;
Virginia v. Imperial Coal Sales Co., 293 U. S.
15;
Wheeling Steel Corp. v. Fox, 298 U.
S. 193;
New York ex rel. Whitney v. Graves,
299 U. S. 366;
First Bank Stock Corp. v. Minnesota, 301 U.
S. 234.
See Northern Cent. Railroad Co. v.
Jackson, 7 Wall. 262;
Adams Express Co. v.
Kentucky, 166 U. S. 171;
Scottish Union & National Ins. Co. v. Bowland,
196 U. S. 611,
196 U.S. 619-620;
Buck
v. Beach, 206 U. S. 392;
Selliger v. Kentucky, 213 U. S. 200;
Brooke v. City of Norfolk, 277 U. S.
27.
Cf. Board of Assessors v. New York Life Ins.
Co., 216 U. S. 517,
216 U. S. 523.
In some of these cases, the property would appear to be tangible,
as well as intangible, in nature.
[
Footnote 14]
This is generally discussed as in interstate commerce question.
E.g., Bowman v. Continental Oil Co., 256 U.
S. 642;
Eastern Air Transport, Inc. v. South
Carolina Tax Comm'n, 285 U. S. 147;
Gregg Dyeing Co. v. Query, 286 U.
S. 472;
Nashville, C. & St. L. R. Co. v.
Wallace, 288 U. S. 249;
Edelman v. Boeing Air Transport, Inc., 289 U.
S. 249;
Monamotor Oil Co. v. Johnson,
292 U. S. 86;
Henneford v. Silas Mason Co., 300 U.
S. 577.
See also footnote 20
[
Footnote 15]
New York ex rel. Hatch v. Reardon, 204 U.
S. 152,
204 U. S.
158-159.
See Department of Treasury v. Wood
Preserving Corp., 313 U. S. 62;
McLeod v. J. E. Dilworth Co., 322 U.
S. 327;
cf. Sonneborn Bros. v. Cureton,
262 U. S. 506;
Graniteville Mfg. Co. v. Query, 283 U.
S. 376 (creation of promissory notes).
See also
footnote 19
[
Footnote 16]
Kane v. New Jersey, 242 U. S. 160;
Interstate Busses Corp. v. Blodgett, 276 U.
S. 245;
Continental Baking Co. v. Woodring,
286 U. S. 352;
Hicklin v. Coney, 290 U. S. 169.
See Hendrick v. Maryland, 235 U.
S. 610;
Clark v. Poor, 274 U.
S. 554;
cf. Sprout v. South Bend, 277 U.
S. 163;
Interstate Transit, Inc. v. Lindsey,
283 U. S. 183;
Clark v. Paul Gray, Inc., 306 U.
S. 583;
Bode v. Barrett, 344 U.
S. 583.
[
Footnote 17]
Society for Savings v.
Coite, 6 Wall. 594,
73 U. S. 607;
In re Delaware Railroad
Tax, 18 Wall. 206,
85 U. S. 231;
Henderson Bridge Co. v. Kentucky, 166 U.
S. 150;
Corry v. Mayor and Council of
Baltimore, 196 U. S. 466;
Ayer & Lord Tie Co. v. Kentucky, 202 U.
S. 409;
New York ex rel. New York C. & H.R. R.
Co. v. Miller, 202 U. S. 584;
Southern Pacific Co. v. Kentucky, 222 U. S.
63;
Kansas City Ft. S. & M. R. Co. v.
Botkin, 240 U. S. 227,
240 U. S. 232,
240 U. S. 235;
Kansas City, M. & B. R. Co. v. Stiles, 242 U.
S. 111,
242 U. S.
118-119;
Cream of Wheat Co. v. County of Grand
Forks, 253 U. S. 325;
Schwab v. Richardson, 263 U. S. 88;
Matson Navigation Co. v. State Board of Equalization,
297 U. S. 441;
Schuylkill Trust Co. v. Pennsylvania, 302 U.
S. 506,
302 U. S.
514-516;
Newark Fire Ins. Co. v. State Board of Tax
Appeals, 307 U. S. 313;
Page 347 U. S. 356
Northwest Airlines, Inc. v. Minnesota, 322 U.
S. 292.
See Baker v. Baker, Eccles & Co.,
242 U. S. 394,
242 U. S.
400-401;
Maxwell v. Bugbee, 250 U.
S. 525,
250 U. S.
539-540;
State Tax Comm'n v. Aldrich,
316 U. S. 174. In
many of these cases, the company was also doing business in the
state of incorporation.
[
Footnote 18]
State Railroad Tax Cases, 92 U. S.
575,
92 U. S. 603;
Horn Silver Mining Co. v. New York, 143 U.
S. 305;
Baltic Mining Co. v. Massachusetts,
231 U. S. 68;
St. Louis Southwestern R. Co. v. Arkansas, 235 U.
S. 350,
235 U. S. 364;
Equitable Life Assurance Society v. Pennsylvania,
238 U. S. 143;
Underwood Typewriter Co. v. Chamberlain, 254 U.
S. 113;
Pullman Co. v. Richardson, 261 U.
S. 330;
Bass, Ratcliff & Gretton, Ltd. v. State
Tax Comm'n, 266 U. S. 271;
Great Northern R. Co. v. Minnesota, 278 U.
S. 503;
Great Atlantic & Pacific Tea Co. v.
Grosjean, 301 U. S. 412,
301 U. S.
424-427;
Atlantic Refining Co. v. Virginia,
302 U. S. 22,
302 U. S. 29-31;
Illinois Central R. Co. v. Minnesota, 309 U.
S. 157;
Wisconsin v. J. C. Penney Co.,
311 U. S. 435;
International Harvester Co. v. Wisconsin Department of
Taxation, 322 U. S. 435;
International Harvester Co. v. Evatt, 329 U.
S. 416,
329 U. S.
420-421;
Interstate Oil Pipe Line Co. v. Stone,
337 U. S. 662,
337 U. S.
667-668.
See Erie R. Co. v.
Pennsylvania, 21 Wall. 492;
Western Union
Telegraph Co. v. Attorney General, 125 U.
S. 530,
125 U. S. 548;
Maine v. Grand Trunk R. Co., 142 U.
S. 217,
142 U. S.
227-228;
Central Pacific R. Co. v. California,
162 U. S. 91,
162 U. S. 126;
Western Union Telegraph Co. v. Missouri ex rel. Gottlieb,
190 U. S. 412;
Western Union Telegraph Co. v. Kansas ex rel. Coleman,
216 U. S. 1,
216 U. S. 30,
216 U. S. 38;
Pullman Co. v. Kansas ex rel. Coleman, 216 U. S.
56,
216 U. S. 61-63;
Ludwig v. Western Union Telegraph Co., 216 U. S.
146,
216 U. S.
162-163;
Atchison, T. & S.F. R. Co. v.
O'Connor, 223 U. S. 280,
223 U. S. 285;
Provident Savings Life Assurance Society v. Kentucky,
239 U. S. 103;
Looney v. Crane Co., 245 U. S. 178,
245 U. S.
187-188;
International Paper Co. v.
Massachusetts, 246 U. S. 135;
Wallace v. Hines, 253 U. S. 66;
Southern R. Co. v. Watts, 260 U.
S. 519,
260 U. S. 527;
Baker v. Druesedow, 263 U. S. 137;
Air-Way Electric Appliance Corp. v. Day, 266 U. S.
71,
266 U. S. 81-82;
Alpha Portland Cement Co. v. Massachusetts, 268 U.
S. 203,
268 U. S.
217-218;
Rhode Island Hospital Trust Co. v.
Doughton, 270 U. S. 69;
Hans Ress' Sons, Inc. v. North Carolina ex rel. Maxwell,
283 U. S. 123;
Connecticut General Life Ins. Co. v. Johnson, 303 U. S.
77;
Wisconsin Gas & Electric Co. v. United
States, 322 U. S. 526,
322 U. S.
530-531.
Cf. Armour & Co. v. Virginia,
246 U. S. 1;
St.
Louis & E. St. L.E. R. Co. v. Missouri, 256 U.
S. 314,
256 U. S. 318;
Rowley v. Chicago & Northwestern R. Co., 293 U.
S. 102;
James v. Dravo Contracting Co.,
302 U. S. 134,
302 U. S.
138-140;
Nippert v. Richmond, 327 U.
S. 416,
327 U. S.
423-424. The same principle applies to individuals
Page 347 U. S. 357
engaged in business within the state.
Ficklen v. Shelby
County Taxing District, 145 U. S. 1;
Shaffer v. Carter, 252 U. S. 37;
Travis v. Yale & Towne Mfg. Co., 252 U. S.
60.
See also Haavik v. Alaska Packers Assn.,
263 U. S. 510,
where license and poll taxes were imposed on an individual who was
working in Alaska but was not a resident or domiciliary there.
[
Footnote 19]
Compare Norton Co. v. Department of Revenue,
340 U. S. 534,
with International Harvester Co. v. Department of
Treasury, 322 U. S. 340;
McGoldrick v. Berwind-White Coal Mining Co., 309 U. S.
33;
and McGoldrick v. Felt & Tarrant Mfg.
Co., 309 U. S. 70.
[
Footnote 20]
Compare Southern Pacific Co. v. Gallagher, 306 U.
S. 167,
306 U. S.
180-181,
with General Trading Co. v. State Tax
Comm'n, 322 U. S. 335;
Nelson v. Sears, Roebuck & Co., 312 U.
S. 359;
Nelson v. Montgomery Ward & Co.,
312 U. S. 373,
and Felt & Tarrant Mfg. Co. v. Gallagher, 306 U. S.
62.
MR. JUSTICE DOUGLAS, with whom THE CHIEF JUSTICE, MR. JUSTICE
BLACK and MR. JUSTICE CLARK, concur, dissenting.
The States have been increasingly turning to sales and use taxes
to raise the revenues they need to educate, protect, and serve
their growing number of citizens. Unless the States can collect a
sales or use tax upon goods being purchased out-of-state, there is
a fertile opportunity for the citizen who wants state benefits
without paying taxes to buy out-of-state. And there are "just
across the state line" merchants who capitalize upon this
opportunity. After today's decision, there will be more.
I see no constitutional difficulty in making appellant a tax
collector for Maryland under the general principles announced in
General Trading Co. v. Tax Commission, 322 U.
S. 335. When appellant's sales clerks make out the sales
slips and arrange for the shipment of the purchased goods, they
surely will know which are destined for Maryland, which for some
other State. Hence, to make appellant add the Maryland use tax to
the bill when the purchaser requests that the goods be shipped to
Maryland is only a minimal burden. Appellant will be paid
Page 347 U. S. 358
for its trouble. [
Footnote 2/1]
If liability were sought to be imposed under circumstances
indicating that appellant had been taken by surprise or treated
unfairly, different considerations would come into play. But
appellant in this case pleads immunity, not ignorance of the
Maryland law nor harshness in its application.
This is not a case of a minimal contact between a vendor and the
collecting State. Appellant did not sell cash-and-carry without
knowledge of the destination of the goods, and its delivery truck
was not in Maryland upon a casual, nonrecurring visit. Rather,
there has been a course of conduct in which the appellant has
regularly injected advertising into media reaching Maryland
consumers and regularly effected deliveries within Maryland by its
own delivery trucks and by common carriers. [
Footnote 2/2]
Jurisdiction over appellant in this suit was obtained when its
motor vehicle was attached while it was being used in Maryland.
Pennoyer v. Neff, 95 U. S. 714;
Ownbey v. Morgan, 256 U. S. 94. If
appellant chooses to keep out of Maryland entirely, then the
Maryland courts will of course have no jurisdiction over it. But as
long as appellant chooses to do some business there, I see nothing
in the Due Process Clause which would prevent Maryland from making
it a collector for taxes on sales which appellant knows are
destined for Maryland homes.
[
Footnote 2/1]
The Maryland statute provides that the vendor-collector may
retain 3 percent of the gross tax as compensation for collection
and remittance expenses. Flack's Md.Ann.Code, 1951, Art. 81, §
384.
[
Footnote 2/2]
The parties stipulated that appellant advertises in Maryland,
both by Delaware newspapers which circulate across the state line
and by direct mail to Maryland customers. It was also stipulated
that, over a four-and-a-half year period, at least $12,000 worth of
merchandise was sold by appellant to Maryland purchasers for
Maryland use. Approximately two-thirds of this merchandise was
delivered by appellant to its Maryland customers in a motor vehicle
owned and operated by appellant.