The State of Georgia chartered a company to transact a general
forwarding and express business. The company had a business office
at Mobile, in Alabama, and there did an express business which
extended within and beyond the limits of Alabama, or rather there
made contracts for transportation of that sort.
An ordinance of the City of Mobile was then in force requiring
that every express company or railroad company doing business in
that city and having a business extending beyond the limits of the
state should pay an annual license of $500, which should be deemed
a first-grade license; that every express or railroad company doing
business within the limits of the state should take out a license
called a second-grade license and pay therefor $100; and that every
such company doing business within the city should take out a
third-grade license, paying therefor $50. And it subjected any
person or incorporated company who should violate any of its
provisions to a fine not exceeding $50 for each day of such
violation.
Held that the ordinance, in requiring payment for a
license to transact in Mobile a business extending beyond the
limits of the State of Alabama, was not repugnant to the provision
of the Constitution, vesting in the Congress of the United States
the power "to regulate commerce among the several states."
Osborne was the agent, at Mobile, Alabama, of the Southern
Page 83 U. S. 480
Express Company, incorporated by the State of Georgia, and as
such transacted a general forwarding and express business within
and extending beyond the limits of Alabama.
An ordinance of the City of Mobile was then in force, requiring
that every express company or railroad company doing business in
that city and having a business extending beyond the limits of the
state should pay an annual license of $500, which should be deemed
a first-grade license; that every express or railroad company doing
business within the limits of the state should take out a license
called a second-grade license, and pay therefor $100; and that
every such company doing business within the city should take out a
third-grade license, paying therefor $50. It subjected any person
or incorporated company who should violate any of its provisions to
a fine not exceeding $50 for each day of such violation.
On the 10th of February, 1869, Osborne was fined by the Mayor of
Mobile for violating that ordinance in conducting the business of
his agency without having paid the $500 and obtained the license
required. He appealed to the circuit court of the state, which
affirmed the judgment of the mayor. He then appealed to the Supreme
Court of Alabama, and that court affirmed the judgment of the
circuit court. A writ of error brought the case here.
The question was whether the ordinance, in requiring payment for
a license to transact in Mobile a business extending beyond the
limits of the State of Alabama, was repugnant to the provision of
the Constitution vesting in the Congress of the United States the
power "to regulate commerce among the several states."
THE CHIEF JUSTICE delivered the opinion of the Court.
In several cases decided at this term, we have had occasion to
consider questions of state taxation as affected by this
Page 83 U. S. 481
clause of the Constitution. In one, [
Footnote 1] we held that the state could not
constitutionally impose and collect a tax upon the tonnage of
freight taken up within its limits and carried beyond them, or
taken up beyond its limits and brought within them; that is to say,
in other words, upon interstate transportation. In another,
[
Footnote 2] we held that a tax
upon the gross receipts for transportation by railroad and canal
companies, chartered by the state, is not obnoxious to the
objection of repugnancy to the constitutional provision.
The tax on tonnage was held to be unconstitutional be cause it
was in effect a restriction upon interstate commerce, which by the
Constitution was designed to be entirely free. The tax on gross
receipts was held not to be repugnant to the Constitution, because
imposed on the railroad companies in the nature of a general income
tax, and incapable of being transferred as a burden upon the
property carried from one state to another.
The difficulty of drawing the line between constitutional and
unconstitutional taxation by the state was acknowledged, and has
always been acknowledged, by this Court; but that there is such a
line is clear, and the court can best discharge its duty by
determining in each case on which side the tax complained of is. It
is as important to leave the rightful powers of the state in
respect to taxation unimpaired as to maintain the powers of the
federal government in their integrity.
In the second of the cases recently decided, the whole court
agreed that a tax on business carried on within the state and
without discrimination between its citizens and the citizens of
other states, might be constitutionally imposed and collected.
The case now before us seems to come within this principle.
The Southern Express Company was a Georgia corporation carrying
on business in Mobile. There was no discrimination in the taxation
of Alabama between it and the
Page 83 U. S. 482
corporations and citizens of that state. The tax for license was
the same by whomsoever the business was transacted. There is
nothing in the case, therefore, which brings it within the case of
Ward v. Maryland. [
Footnote 3] It seems rather to be governed by the
principles settled in
Woodruff v. Parham. [
Footnote 4]
Indeed, no objection to the license tax was taken at the bar
upon the ground of discrimination. Its validity was assailed for
the reason that it imposed a burden upon interstate commerce, and
was therefore repugnant to the clause of the Constitution which
confers upon Congress the power to regulate commerce among the
several states.
It is to be observed that Congress has never undertaken to
exercise this power in any manner inconsistent with the municipal
ordinance under consideration, and there are several cases in which
the court has asserted the right of the state to legislate, in the
absence of legislation by Congress, upon subjects over which the
Constitution has clothed that body with legislative authority.
[
Footnote 5]
But it is not necessary to resort to the principles maintained
in these cases for the decision of the case now before us. It comes
directly within the rules laid down in the case relating to the tax
upon the gross receipts of railroads. In that case we said: "It is
not everything that affects commerce that amounts to a regulation
of it within the meaning of the Constitution." We admitted that
"the ultimate effect" of the tax on the gross receipts might "be to
increase the cost of transportation," but we held that the right to
tax gross receipts, though derived in part from interstate
transportation, was within the general "authority of the states to
tax persons, property, business, or occupations within their
limits."
The license tax in the present case was upon a business carried
on within the City of Mobile. The business licensed included
transportation beyond the limits of the state, or rather the making
of contracts, within the state, for such
Page 83 U. S. 483
transportation beyond it. It was with reference to this feature
of the business that the tax was in part imposed, but it was no
more a tax upon interstate commerce than a general tax on drayage
would be because the licensed drayman might sometimes be employed
in hauling goods to vessels to be transported beyond the limits of
the state.
We think it would be going too far so to narrow the limits of
state taxation.
The judgment of the Supreme Court of Alabama is therefore
Affirmed.
[
Footnote 1]
Case of the State Freight
Tax, 15 Wall. 232.
[
Footnote 2]
Case of the State Tax on
Railway Gross Receipts, 15 Wall. 284.
[
Footnote 3]
79 U. S. 12
Wall. 423.
[
Footnote 4]
75 U. S. 8 Wall.
123.
[
Footnote 5]
License Cases,
5 How. 504;
Willson v. Blackbird Creek
Marsh Co., 2 Pet. 245;
Cooley
v. Board of Wardens, 12 How. 315.
