Appellant N & W, a predominantly coal-carrying railroad with
operations centered in the eastern part of the country and which
owned no fixed property and only minimal rolling stock in Missouri,
leased the property of the Wabash Railroad and became obligated to
pay 1965 taxes on fixed property and rolling stock located in
Missouri. A state statute prescribes a formula for determining the
amount of rolling stock of an interstate railroad that Missouri
shall assess for purposes of
ad valorem taxation. The
statute apportions to Missouri a part of the entire value of all
rolling stock of an interstate railroad on the ratio of miles
operated in Missouri to the railroad's total road mileage. Applying
that formula, which resulted in the postulation that N & W's
rolling stock in Missouri constituted 8.2824% of its total rolling
stock, the Missouri Tax Commission put N & W's rolling stock
assessment at $19,981,757. N & W challenged the assessment,
which it showed was more than 2 1/2 times the value of N & W's
rolling stock in the State on tax day and more than twice Wabash's
assessment for practically the same property in the previous year.
Neither N & W's rolling stock in Missouri (about 2.71% of N
& W's total rolling stock by number of units and 3.16% by
value), the overwhelming amount of which had been leased from
Wabash, nor the Missouri operations of N & W and Wabash had
materially increased in the intervening period. N & W's coal
operations require a great deal of specialized equipment, scarcely
any of which enters Missouri, and traffic density on Missouri
tracks is but 54% of traffic density on the N & W system as a
whole. The Tax Commission's assessment against N & W was
affirmed on appeal. The Missouri Supreme Court held that use of the
mileage formula could be justified on the theory that the rolling
stock regularly employed in one State has an "enhanced
Page 390 U. S. 318
value" when connected to "an integrated operational whole."
Held:
1. Application of the mileage formula resulted in an assessment
which, on the record in this case, went far beyond the value of
appellants' rolling stock in Missouri, and violated the Due Process
and Commerce Clauses. Pp.
390 U. S.
323-329.
(a) A State may impose a property tax upon its fair share of an
interstate transportation enterprise, including a portion of the
enterprise's intangible value. Pp.
390 U. S.
323-324.
(b) Though a State has considerable latitude in devising
formulas to measure tangible property within its borders, it is not
entitled to tax tangible or intangible property unconnected with
the State. Pp.
390 U. S.
324-325.
(c) Appellants' evidence satisfied the burden which rests on a
railroad attacking a mileage formula of showing that the formula
reached assets outside the State, and Missouri has not countered
such evidence here. Pp.
390 U. S.
326-327.
(d) Though this Court's decisions recognize the practical
difficulties in applying a mileage formula, they forbid an
unexplained discrepancy as gross as that here revealed. P.
390 U. S.
327.
(e) The record is totally barren of evidence relating to the
enhanced value of property in Missouri by reason of the
incorporation of such property into the entire N & W system.
Pp.
390 U. S.
327-329.
2. The Missouri Supreme Court may remand the case to the
appropriate tribunal to reopen the record for additional evidence
supporting the assessment. P.
390 U. S.
330.
426 S.W.2d 362, vacated and remanded.
Page 390 U. S. 319
MR. JUSTICE FORTAS delivered the opinion of the Court.
This case brings before us, once again, troublesome problems
arising from state taxation of an interstate commercial enterprise.
At issue is a tax assessment pursuant to a Missouri statute
specifying the manner in which railroad rolling stock is to be
assessed for the State's
ad valorem tax on that property.
[
Footnote 1]
In 1964, the Norfolk & Western Railway Co. (N & W), a
Virginia corporation with interstate rail operations. leased all of
the property of appellant Wabash Railroad Company. The Wabash owned
substantial fixed property and rolling stock, and did substantial
business in Missouri, as well as in other States. Prior to the
lease, N & W owned no fixed property and only a minimal amount
of rolling stock in Missouri. N & W is primarily a
coal-carrying railroad. Much of its equipment and all of its
specialized coal-carrying equipment are generally located in the
coal regions of Virginia, West Virginia, and Kentucky, and along
the coal-ferrying routes from those regions to the eastern seaboard
and the Great Lakes. Scarcely any of the specialized equipment ever
enters Missouri. According to appellants, the Wabash property in
Missouri was leased by N & W in order to diversify its
business, not to provide the opportunity for an integrated through
movement of traffic.
By the terms of the lease, the N & W became obligated to pay
the 1965 taxes on the property of the Wabash in Missouri and
elsewhere. [
Footnote 2] Upon
receiving notice of the
Page 390 U. S. 320
1965 assessment from the appellee Missouri Tax Commission, the N
& W filed a request for an adjustment and hearing before the
Commission. The hearing was held, and the Commission sustained its
assessment against the taxpayer's challenge. On judicial review,
the Commission's decision was affirmed without opinion by the
Circuit Court of Cole County, and then by the Supreme Court of
Missouri. Appellants filed an appeal in this Court, contending that
the assessment, in effect, reached property not located in
Missouri, and thus violated the Due Process Clause and the Commerce
Clause of the United States Constitution. We noted probable
jurisdiction. 389 U.S. 810 (1967).
I
The Missouri property taxable to the N & W was assessed by
the State Tax Commission at $31,298,939. Of this sum, $12,177,597
relates to fixed property within the State, an assessment that is
not challenged by appellants. Their attack is aimed only at that
portion of the assessment relating to rolling stock, $19,981,757.
[
Footnote 3]
With respect to the assessment of rolling stock, the Commission
used the familiar mileage formula authorized by the Missouri
statute. In relevant part, this provides (§ 151.060 subd. 3):
". . . when any railroad shall extend beyond the limits of this
state and into another state in which a tax is levied and paid on
the rolling stock of such road, then the said commission shall
assess, equalize
Page 390 U. S. 321
and adjust only such proportion of the total value of all the
rolling stock of such railroad company as the number of miles of
such road in this state bears to the total length of the road as
owned or controlled by such company."
The Commission arrived at the assessment of rolling stock by
first determining the value of all rolling stock, regardless of
where located, owned or leased by the N & W as of the tax day,
January 1, 1965. Value was ascertained by totaling the original
cost, less accrued depreciation at 5% a year up to 75% of cost, of
each locomotive, car, and other piece of mobile equipment. To the
total value, $513,309,877, was applied an "equalizing factor" of
47%, employed in assessing all railroad property in an attempt to
bring such assessments down to the level of other property
assessments in Missouri. The Commission next found that 8.2824% of
all the main and branch line road (excluding secondary and side
tracks) owned, leased, or controlled by the N & W was situated
in Missouri. This percentage was applied to the equalized value of
all N & W rolling stock, and the resulting figure was
$19,981,757.
There is no suggestion in this case that the Commission failed
to follow the literal command of the statute. The problem arises
because of appellants' contention that, in mechanically applying
the statutory formula, the Commission here arrived at an
unconscionable and unconstitutional result. It is their submission
that the assessment was so far out of line with the actual facts of
record with respect to the value of taxable rolling stock in the
State as to amount to an unconstitutional attempt to exercise state
taxing power on out-of-state property.
Appellants submitted evidence based upon an inventory of all N
& W rolling stock that was actually in Missouri on tax day. The
equalized value of this rolling
Page 390 U. S. 322
stock, calculated on the same "cost less depreciation" basis
employed by the Commission, was approximately $7,600,000, as
compared with the assessed value of $19,981,000. Appellants also
submitted evidence to show that the tax day inventory was not
unusual. The evidence showed that, both before and in the months
immediately after the Wabash lease, the equalized value of the N
& W rolling stock actually in Missouri never ranged far above
the $7,600,000 figure. In the preceding year, 1964, the rolling
stock assessment against the Wabash was only $9,177,683, and
appellants demonstrated that neither the amount of rolling stock in
Missouri nor the Missouri operations of the N & W and Wabash
had materially increased in the intervening period. [
Footnote 4] The assessment of the fixed
properties (for which no mileage formula was applied) hardly
increased between 1964 and 1965. In 1964, prior to the lease, the
fixed properties in Missouri were assessed at $12,092,594; in 1965,
after the lease, the assessment was $12, 177,597.
The Supreme Court of Missouri concluded that the result reached
by the Commission was justifiable. It pointed out that the
statutory method used by the Commission proceeds on the assumption
that
"rolling stock is substantially evenly divided throughout the
railroad's entire system, and the percentage of all units which are
located in Missouri at any given time, or for any given period of
time, will be substantially the same as the percentage of all the
miles of road of the railroad located in Missouri."
It then held that the evaluation found by the Commission could
be justified on the theory of "enhancement,"
Page 390 U. S. 323
although the Commission had not referred to that principle. The
court described the theory as follows:
"The theory underlying such method of assessment is that rolling
stock regularly employed in one state has an enhanced or augmented
value when it is connected to, and because of its connection with,
an integrated operational whole, and may, therefore, be taxed
according to its value"
"as part of the system, although the other parts be outside the
State; -- in other words, the tax may be made to cover the enhanced
value which comes to the property in the State through its organic
relation to the system."
"
Pullman Co. v. Richardson, 261 U. S.
330,
261 U. S. 338."
The court correctly noted, however, that, "even if the validity
of such methods be conceded, the results, to be valid, must be free
of excessiveness and discrimination." It concluded that, in the
present case, the result reached by the Commission was justifiable.
We disagree. In our opinion, the assessment violates the Due
Process and Commerce Clauses of the Constitution.
II
Established principles are not lacking in this much discussed
area of the law. It is, of course, settled that a State may impose
a property tax upon its fair share of an interstate transportation
enterprise.
Marye v. Baltimore & Ohio R. Co.,
127 U. S. 117,
127 U. S.
123-124 (1888);
Pullman's Palace Car Co. v.
Pennsylvania, 141 U. S. 18
(1891);
Ott v. Mississippi Valley Barge Line Co.,
336 U. S. 169
(1949);
Braniff Airways, Inc. v. Nebraska State Board of
Equalization and Assessment, 347 U. S. 590
(1954). That fair share may be regarded as the value, appropriately
ascertained, of tangible assets permanently or habitually employed
in the taxing State, including a portion of the intangible, or
"going concern," value of
Page 390 U. S. 324
the enterprise.
Railway Express Agency v. Virginia,
347 U. S. 359,
347 U. S. 364
(1954);
Cudahy Packing Co. v. Minnesota, 246 U.
S. 450,
246 U. S. 455
(1918);
Adams Express Co. v. Ohio State Auditor,
166 U. S. 185,
166 U. S.
218-225 (1897). The value may be ascertained by
reference to the total system of which the intrastate assets are a
part. As the Court has stated the rule,
"the tax may be made to cover the enhanced value which comes to
the [tangible] property in the State through its organic relation
to the [interstate] system."
Pullman Co. v. Richardson, 261 U.
S. 330,
261 U. S. 338
(1923). Going concern value, of course, is an elusive concept not
susceptible of exact measurement.
Rowley v. Chicago & N.W.
R. Co., 293 U. S. 102,
293 U. S. 109
(1934);
Nashville, C. & St. L.R. Co. v. Browning,
310 U. S. 362,
310 U. S.
365-366 (1940). As a consequence, the States have been
permitted considerable latitude in devising formulas to measure the
value of tangible property located within their borders.
Union
Tank Line Co. v. Wright, 249 U. S. 275,
249 U. S. 282
(1919). Such formulas usually involve a determination of the
percentage of the taxpayer's tangible assets situated in the taxing
State and the application of this percentage to a figure
representing the total going concern value of the enterprise.
See, e.g., Rowley v. Chicago & N.W. R. Co.,
293 U. S. 102
(1934);
Pittsburgh, C., C. & St. L.R. Co. v. Backus,
154 U. S. 421
(1894). A number of such formulas have been sustained by the Court,
even though it could not be demonstrated that the results they
yielded were precise evaluations of assets located within the
taxing State.
See, e.g., Nashville, C. & St. L.R. Co. v.
Browning, 310 U. S. 362,
310 U. S.
365-366 (1940).
On the other hand, the Court has insisted for many years that a
State is not entitled to tax tangible or intangible property that
is unconnected with the State.
The Delaware Railroad
Tax, 18 Wall. 206,
85 U. S. 229
(1874);
Fargo v. Hart, 193 U. S. 490,
193 U. S. 499
(1904). In some cases,
Page 390 U. S. 325
the Court has concluded that States have, in fact, cast their
tax burden upon property located beyond their borders.
Fargo v.
Hart, 193 U. S. 490,
193 U. S.
499-503 (1904);
Union Tank Line Co. v. Wright,
249 U. S. 275,
249 U. S.
283-286 (1919);
Wallace v. Hines, 253 U. S.
66,
253 U. S. 69-70
(1920);
Southern R. Co. v. Kentucky, 274 U. S.
76,
274 U. S. 81-84
(1927). The taxation of property not located in the taxing State is
constitutionally invalid, both because it imposes an illegitimate
restraint on interstate commerce and because it denies to the
taxpayer the process that is his due. [
Footnote 5] A State will not be permitted, under the
shelter of an imprecise allocation formula or by ignoring the
peculiarities of a given enterprise, to "project the taxing power
of the state plainly beyond its borders."
Nashville, C. &
St. L.R. Co. v. Browning, 310 U. S. 362,
310 U. S. 365
(1940). Any formula used must bear a rational relationship, both on
its face and in its application, to property values connected with
the taxing State.
Fargo v. Hart, 193 U.
S. 490,
193 U. S.
499-500 (1904). [
Footnote 6]
Page 390 U. S. 326
III
Applying these principles to the facts of the case now before
us, we conclude that Missouri's assessment of N & W's rolling
stock cannot be sustained. This Court has, in various contexts,
permitted mileage formulas as a basis for taxation.
See, e.g.,
Pittsburgh, C., C. St. L.R. Co. v. Backus, 154 U.
S. 421 (1894). A railroad challenging the result reached
by the application of such a formula has a heavy burden.
See
Butler Brothers v. McColgan, 315 U. S. 501,
315 U. S. 507
(1942);
Norfolk & Western R. Co. v. North Carolina,
297 U. S. 682,
297 U. S. 688
(1936). It is confronted by the vastness of the State's taxing
power and the latitude that the exercise of that power must be
given before it encounters constitutional restraints. Its task is
to show that application of the mileage method in its case has
resulted in such gross overreaching, beyond the values represented
by the intrastate assets purported to be taxed, as to violate the
Due Process and Commerce Clauses of the Constitution.
Cf.
Capitol Greyhound Lines v. Brice, 339 U.
S. 542,
339 U. S. 547
(1950). But here the appellants have borne that burden, and the
State has made no effort to offset the convincing case that they
have made.
Here, the record shows that rigid application of the mileage
formula led to a grossly distorted result. The rolling stock in
Missouri was assessed to N & W at $19,981,757. It was
practically the same property that had been assessed the preceding
year at $9,177,683 to the Wabash. Appellants introduced evidence of
the results of an actual count of the rolling stock in
Missouri.
Page 390 U. S. 327
On the basis of this actual count, the equalized assessment
would have been less than half of the value assessed by the State
Commission. The Commission's mileage formula resulted in
postulating that N & W's rolling stock in Missouri constituted
8.2824% of its rolling stock. But appellants showed that the
rolling stock usually employed in the State comprised only about
2.71% by number of units (and only 3.16% by "cost less
depreciation" value) of the total N & W fleet.
Our decisions recognize the practical difficulties involved, and
do not require any close correspondence between the result of
computations using the mileage formula and the value of property
actually located in the State, but our cases certainly forbid an
unexplained discrepancy as gross as that in this case. [
Footnote 7] Such discrepancy certainly
means that the impact of the state tax is not confined to
intrastate property even within the broad tolerance permitted. The
facts of life do not neatly lend themselves to the niceties of
constitutionalism; but neither does the Constitution tolerate any
result, however distorted, just because it is the product of a
convenient mathematical formula which, in most situations, may
produce a tolerable product.
The basic difficulty here is that the record is totally barren
of any evidence relating to enhancement or to going concern or
intangible value, or to any other factor which might offset the
devastating effect of the demonstrated discrepancy. The Missouri
Supreme Court attempted to justify the result by reference to
"enhanced"
Page 390 U. S. 328
value, but the Missouri Commission made no effort to show such
value or to measure the extent to which it might be attributed to
the rolling stock in the State. In fact, N & W showed that it
is chiefly a coal-carrying railroad, 70% of whose 1964 revenue was
derived from coal traffic. It demonstrated that its coal operations
require a great deal of specialized equipment, scarcely any of
which ever enters Missouri. It showed that traffic density on its
Missouri tracks was only 54% of traffic density on the N & W
system as a whole. Finally, it proved that the overwhelming
majority of its rolling stock regularly present in Missouri was
rolling stock it had leased from the Wabash. As long ago as
Pittsburgh, C., C. & St. L.R. Co. v. Backus,
154 U. S. 421
(1894), we indicated that an otherwise valid mileage formula might
not be validly applied to ascertain the value of tangible assets
within the taxing State in exceptional situations, for example,
"where, in certain localities, the company is engaged in a
particular kind of business requiring for sole use in such
localities an extra amount of rolling stock."
Id. at
154 U. S.
431.
The Missouri Supreme Court did not challenge the factual data
submitted by the N & W. Its decision that these data did not
place this case within the realm of "exceptional situations"
recognized by this Court was apparently based on the conclusion
that the lease transaction between Wabash and the N & W had
increased the value of tangible assets formerly belonging to the
two separate lines. This may be true, but it does not follow that
the Constitution permits us, without evidence as to the amount of
enhancement that may be assumed, to bridge the chasm between the
formula and the facts of record. The difference between the
assessed value and the actual value as shown by the evidence to
which we have referred is too great to be explained by the mere
assertion, without more, that it is due to an assumed and
Page 390 U. S. 329
nonparticularized increase in intangible value.
See Wallace
v. Hines, 253 U. S. 66,
253 U. S. 69
(1920).
As the Court recognized in
Fargo v. Hart, 193 U.
S. 490,
193 U. S.
499-500 (1904), care must be exercised lest the mileage
formula
"be made a means of unlawfully taxing the privilege, or property
outside the State, under the name of enhanced value or goodwill, if
it is not closely confined to its true meaning. So long as it
fairly may be assumed that the different parts of a line are about
equal in value, a division by mileage is justifiable. But it is
recognized in the cases that if, for instance, a railroad company
had terminals in one State equal in value to all the rest of the
line through another, the latter State could not make use of the
unity of the road to equalize the value of every mile. That would
be taxing property outside of the State under a pretense."
We repeat that it is not necessary that a State demonstrate that
its use of the mileage formula has resulted in an exact measure of
value. But when a taxpayer comes forward with strong evidence
tending to prove that the mileage formula will yield a grossly
distorted result in its particular case, the State is obliged to
counter that evidence or to make the accommodations necessary to
assure that its taxing power is confined to its constitutional
limits. If it fails to do so, and if the record shows that the
taxpayer has sustained the burden of proof to show that the tax is
so excessive as to burden interstate commerce, the taxpayer must
prevail.
IV
Accordingly, we conclude that, on the present record, Missouri
has in this case exceeded the limits of her constitutional power to
tax, as defined by the Due Process
Page 390 U. S. 330
and Commerce Clauses. It will be open to the Missouri Supreme
Court, so far as our action today is concerned, to remand the case
to the appropriate tribunal to reopen the record for additional
evidence to support the assessment. We vacate the judgment of the
Supreme Court of Missouri and remand the cause to it for further
proceedings not inconsistent with our decision.
Vacated and remanded.
[
Footnote 1]
The tax in question applies to "all real property . . . [and]
tangible personal property . . . owned, hired or leased by any
railroad company . . . in this state." Intangible personal property
is explicitly exempted from this tax. Mo.Rev.Stat. § 151.010
(1959).
[
Footnote 2]
As of January 1, 1966, the N & W purchased the Wabash
rolling stock that it had previously leased, while continuing to
lease Wabash fixed property. This change in the relationship
between N & W and the Wabash has no effect on the issues
presented to us. Our analysis would apply both before and after the
purchase of the Wabash rolling stock.
[
Footnote 3]
The Commission deducted from the sum of these two figures
$860,415, representing an "economic factor" which is allowed to all
railroads in varying amounts. Exactly the same deduction had been
allowed the Wabash in each of the three preceding years.
[
Footnote 4]
Appellants further argue that the arbitrariness of the result
reached here is shown by the fact that, if the rolling stock in
Missouri had been taxable to the Wabash in 1965, rather than to N
& W, the application of the formula to the same rolling stock
would have resulted in an assessment of little more than half of
that which was actually levied ($10,103,340).
[
Footnote 5]
We have said:
"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."
Ott v. Mississippi Valley Barge Line Co., 336 U.
S. 169,
336 U. S. 174
(1949). Neither appellants nor appellees contend that these two
analyses bear different implications insofar as our present case is
concerned.
[
Footnote 6]
As the Court stated in
Wallace v. Hines, 253 U.S. at
253 U. S.
69:
"The only reason for allowing a State to look beyond its borders
when it taxes the property of foreign corporations is that it may
get the true value of the things within it, when they are part of
an organic system of wide extent, that gives them a value above
what they otherwise would possess. The purpose is not . . . to open
to taxation what is not within the State. Therefore no property of
. . . an interstate road situated elsewhere can be taken into
account unless it can be seen in some plain and fairly intelligible
way that it adds to the value of the road and the rights exercised
in the State."
[
Footnote 7]
"[I]f the ratio of the value of the property in [the State] to
the value of the whole property of the company be less than that
which the length of the road in [the State] bears to its entire
length, . . . a tax imposed upon the property in [the State]
according to the ratio of the length of its road to the length of
the whole road must necessarily fall upon property out of the
State."
The Delaware Railroad
Tax, 18 Wall. 206,
85 U. S.
230-231 (1874).
MR. JUSTICE BLACK, dissenting.
It is established law, as the Court apparently recognizes in its
opinion, that an interstate company challenging a state
apportionment of the company's property taxable in the State has
the heavy burden of proving by "clear and cogent evidence" that the
apportionment is grossly and flagrantly excessive.
See, e.g.,
Railway Express Agency v. Virginia, 358 U.
S. 434,
358 U. S. 444,
and cases cited. I agree with the Supreme Court of Missouri that
appellant railroad failed to meet that burden, and would therefore
affirm its judgment.
See its opinion at 426 S.W.2d
362.
It is true that most of the cars used in Missouri by N & W
were owned by the Wabash Railroad, and that, before transfer to N
& W, they had been assessed at $9,177,683, as against the
assessment here of $19,981,757.
But this, of course, does not prove that the higher assessment
was too much. For, as the Supreme Court of Missouri pointed out,
this Court has held that
"a mere increase in the assessment does not prove that the last
assessment is wrong. Something more is necessary before it can be
adjudged that the assessment is illegal and excessive. . . ."
Pittsburgh, C., C. & St. L.R. Co. v. Backus,
154 U. S. 421,
154 U. S. 432.
The court below held, and this Court agrees, that, in pricing the
value of the rolling stock, the Commission was authorized to
consider
Page 390 U. S. 331
intangible values, such as goodwill and values added because of
the enhancement to the property in Missouri brought about by being
merged into the entire N & W system. This consideration of
enhanced value is not new (
see, e.g., Pullman Co. v.
Richardson, 261 U. S. 330,
261 U. S.
338), and, as the Court points out, it is because of
this intangible factor of enhancement that States are allowed wide
discretion in determining the value of tangible property located
within their borders. Thus, mileage, formulas such as the one used
here, have generally been upheld. As this Court said in
Nashville, C. & St. L. R. Co. v. Browning,
310 U. S. 362, "In
basing its apportionment on mileage, the Tennessee Commission
adopted a familiar and frequently sanctioned formula [cases
cited]." 310 U.S. at
310 U. S. 365.
It has never been contended that mileage formulas are completely
accurate, but because States must consider such intangibles as
enhancement value, these formulas are allowed except where the
taxpayer can show, as the Court puts it,
"that application of the mileage method in its case has resulted
in such gross overreaching, beyond the values represented by the
intrastate assets purported to be taxed, as to violate the Due
Process and Commerce Clauses of the Constitution."
I do not believe that appellants have made such a showing here.
The fatal flaw with the appellants' case is that they have not
proved that the tax is excessive when possible enhancement of value
due to the merger is considered. The Court's opinion admits as much
when it says that "the record is totally barren of any evidence
relating to enhancement or to going concern or intangible value, or
to any other factor. . . ." Where I differ with the Court is that I
believe the burden of proof is on the railroad to show that the tax
is excessive under all considerations, rather than on the
Commission to show sufficient enhancement of value to justify the
tax.
Page 390 U. S. 332
This Court has recognized before, and indeed the majority pays
lip service to the fact today, that it is impossible for a State to
develop tax statutes with mathematical perfection. Indeed, as was
stated in
International Harvester Co. v. Evatt,
329 U. S. 416:
"Unless a palpably disproportionate result comes from an
apportionment, a result which makes it patent that the tax is
levied upon interstate commerce, rather than upon an intrastate
privilege, this Court has not been willing to nullify honest state
efforts to make apportionments."
329 U.S. at
329 U. S.
422-423. And the "burden is on the taxpayer to make
oppression manifest by clear and cogent evidence."
Norfolk
Western R. Co. v. North Carolina, 297 U.
S. 682,
297 U. S. 688.
Since appellants here did not prove that the enhanced value
* of the rolling
stock was less than the tax assessment, or that the State was
imposing on N & W taxes that were exorbitant on the full value
of all its property,
cf. Capitol Greyhound Lines v. Brice,
339 U. S. 542, I
would affirm the decision of the Missouri Supreme Court.
* This is a familiar principle of valuation in such tax cases.
See Fargo v. Hart, 193 U. S. 490,
193 U. S. 499;
Galveston, H. & S.A. R. Co. v. Texas, 210 U.
S. 217,
210 U. S. 225;
United States Express Co. v. Minnesota, 223 U.
S. 335,
223 U. S. 347;
Union Tank Line Co. v. Wright, 249 U.
S. 275,
249 U. S.
282.