U.S. Supreme Court ANGLO-CHILEAN NITRATE SALES CORP. v. STATE OF ALABAMA, 288 U.S. 218 (1933)

[Page 288 U.S. 218, 226]

would take from appellant the very rights in respect of importation that are conferred by the Constitution and laws of the United States. Alabama was powerless, without the consent of Congress, to tax the nitrate before such sales or to require appellant by the payment of occupation or franchise tax or otherwise to purchase from it the privilege of selling goods so imported and handled. Brown v. Maryland, 12 Wheat. 419, 436, 442- 444. In that case a state license fee imposed on an importer selling imported goods in the original bales or packages was condemned as repugnant to the imports and commerce clauses. Chief Justice Marshall said ( page 444 of 12 Wheat.): 'All must perceive, that a tax on the sale of an article, imported only for sale, is a tax on the article itself . ... A tax on the occupation of an importer is ... a tax on importation. It must add to the price of the article, and be paid by the consumer, or by the importer himself, in like manner as a direct duty on the article itself would be made. This the state has not a right to do, because it is prohibited by the constitution.'

In Cook v. Pennsylvania, , the court held offensive to the same provisions a tax on the amount of the sales of imported goods in the original packages made by an auctioneer for the importer. In May & Co. v. New Orleans, 178 U.S. 496, the court, at page 507, 20 S.Ct. 976, formally reaffirmed and succinctly stated the propositions established in Brown v. Maryland, but held that the city tax there involved did not violate the imports or commerce clause because the imported goods were not sold in the original package. [Footnote 2] And recently in Willcuts v. Bunn, 282 U.S. 216, we said, at page 228, 51 S.Ct. 125, 128: 'When the Constitution prohibits States from laying duties on imports, the prohibition not

[Page 288 U.S. 218, 238]

form from this, and interpreted as one laid directly upon the operations of the business. Cf. Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 5 S.Ct. 826. No license or franchise to engage in a local business had been granted by the state.

Brown v. Maryland, 12 Wheat. 419, was a case of a discriminatory tax upon the business of importers, and Cook v. Pennsylvania, 97 U.S. 566, a case of a discriminatory tax upon an auctioneer selling for importers. In neither was there a franchise, or a tax upon a franchise, or a reference to capital as a standard of measurement. In each the presence of imported packages to be subjected to a burden was an event considered and intended, not an adventitious circumstance developing unexpectedly in the application of the tax to one taxpayer out of many.

The tax imposed by this statute does not discriminate between domestic and foreign corporations to the prejudice of the latter. Domestic corporations pay a franchise tax that is measured by their whole capital; foreign corporations one that is measured by 'the actual amount of capital employed' within the state. It does not discriminate between foreign corporations engaged in interstate or foreign commerce and other foreign corporations. It lays a burden on all impartially. Finally, it is not oppressive in amount, nor framed in such a form as to suggest a furtive purpose to stifle activities not covered by its terms. The tax is $2 per thousand dollars until 1932, and $1 per thousand afterwards. General Acts of Alabama, 1927, 56, p. 177.

The appellant is in the enjoyment of a privilege of value which it solicited and received from the state of Alabama, and for that privilege it should pay.

Mr. Justice BRANDEIS and Mr. Justice STONE join in this dissent. Footnotes

Footnote 1 Section 54 of Act No. 163, Alabama General Acts 1927, p. 176, provides: 'That every corporation organized under the laws of any other state, nation, or territory, and doing business in this State, except strictly benevolent, educational or religious corporations, shall pay annually to the State an annual franchise tax of Two Dollars ($2.00) on each One Thousand Dollars of the actual amount of capital employed in this State. In ascertaining the annual franchise tax which shall be paid by any foreign corporation doing business in this State under this section, there shall be deducted from the amount of the capital employed by such corporation in this State the aggregate amount of loans of money made by such corporations in this State, and which shall be secured by existing mortgage or mortgages to it on real estate in this State, and upon which mortgages there shall have been paid the recording privilege tax provided by law.'

For the derivation of this section, see section 16 of Act No. 464, General Acts 1915, p. 397; section 16 of Act No. 328, General Acts 1919, p. 291; section 11 of Act No. 172, General Acts 1923, p. 164, as ameded by Act No. 263, General Acts 1923, p. 267.

Footnote 2 Cf. Austin v. Tennessee, 179 U.S. 343, 359, 21 S.Ct. 132; Cook v. Marshall County, Iowa, 196 U.S. 261, 270, 25 S.Ct. 233; Kirmeyer v. Kansas, 236 U.S. 568, 573, 35 S.Ct. 419; Price v. Illinois, 238 U.S. 446, 454, 35 S.Ct. 892; Hebe Co. v. Shaw, 248 U.S. 297, 304, 39 S.Ct. 125.