U.S. Supreme Court SILAS MASON CO. v. TAX COM'N OF STATE OF WASHINGTON, 302 U.S. 186 (1937)

302 U.S. 186

SILAS MASON CO., Inc., et al. v. TAX COMMISSION OF STATE OF WASHINGTON et al.

RYAN v. STATE OF WASHINGTON et al.

Nos. 7, 8.

Reargued Oct. 12, 13, 1937. Decided Dec. 6, 1937.[ Silas Mason Co. v. Tax Com'n of State of

[Page 302 U.S. 186, 190]

on the Columbia River. [Footnote 2] The Supreme Court of the State sustained the tax and affirmed judgments dismissing the suits. Silas Mason, Inc. v. State Tax Commission, 188 Wash. 98, 61 P.2d 1269; Ryan v. State, 188 Wash. 115, 61 P.2d 1276. The cases come here on appeal.

[Page 302 U.S. 186, 199]

mation Act. That act was not intended to provide for the acquisition of exclusive federal jurisdiction. The act itself stated the contrary ( section 8, 43 U.S.C. 383). It directed the Secretary of the Interior to proceed in conformity with the state laws in carrying out the provisions of the act and provided that nothing therein contained should be construed as interfering with the laws of the State relating to the control, appropriation, use, or distribution of water used in irrigation. The act has been administered in harmony with this controlling principle that the State should not be ousted of jurisdiction. See Kansas v. Colorado, 206 U.S. 46, 92, 93 S., 27 S.Ct. 655; Nebraska v. Wyoming, 295 U.S. 40, 42, 55 S.Ct. 568: California Oregon Power Co. v. Beaver Cement Co., 295 U.S. 142, 164, 55 S.Ct. 725, 731.

The Department of the Interior expressly stated that the notice was given 'pursuant to section 3378 of Pierce's Code (1929)' with respect to examinations and surveys, and the list of state lands 'in pursuance of section 3380 of Pierce's Code (1929).' These are sections 7410 and 7412 of Remington's Revised Statutes, which with related provisions were enacted in 1905. Laws of Washington, 1905, p. 180. These provisions are set forth in the margin. [Footnote 5] They

[Page 302 U.S. 186, 210]

Appellants say that title was originally in the United States for the benefit of Indians on the Colville Reservation. Executive Order of July 2, 1872. While at a later date the lands were opened for entry (Act March 22, 1906, 34 Stat. 80; Proclamation of the President, May 3, 1916, 39 Stat. 1778), it appears that they were withdrawn before any entry was made. Appellants concede that title to these lands has always been in the United States and hence could not have been acquired by purchase or condemnation. But with respect to such lands exclusive legislative authority would be obtained by the United States only through cession by the State. Surplus Trading Co. v. Cook, supra, , at page 651, 50 S.Ct. 455, 456. If they may be deemed to be within the reference in section 8108 to 'public land' which 'may be set apart by the general government' for the purposes 'before mentioned,' we are brought back to the questions already discussed, and we need not consider the question whether these lands had in fact been set apart in the prescribed manner.

Our conclusion is that the State had territorial jurisdiction to impose the tax upon appellants' receipts and that the tax does not lay an unconstitutional burden upon the Federal Government.

The respective judgments are affirmed.

Mr. Justice McREYNOLDS, Mr. Justice SUTHERLAND, Mr. Justice BUTLER, and Mr. Justice ROBERTS dissent for the reasons stated in the dissenting opinion in James v. Dravo Contracting Company, supra. Footnotes

Footnote 1 The Act describes the tax as laid 'upon the privilege of engaging in business activities.' Section 2-a(1), as added by Laws Wash.1933, Ex. Sess., p. 157, 1 provides: '... there is hereby levied and there shall be collected from every person engaging or continuing within this state in the business of rendering or performing services ... an annual tax or excise for the privilege of engaging in such business ... equal to the gross income of the business multiplied by the rate of five-tenths of one per cent. ...'

Footnote 2 Appellant David H. Ryan, in No. 8, also brought an action to obtain a refund of occupation taxes which he had paid. That action was consolidated for hearing in the state courts with the suit for injunction to restrain further collection.

[Footnote *] For opinion on appeal, see (C.C.A.) 88 F.2d 104.

Footnote 3 For administrative purposes and to avoid confusion with business operations of the contractors elsewhere, the contractors organized the appellant Mason-Walsh-Atkinson-Kier Company, and to avoid objections to an assignment of the contract they entered into an agreement with the United States in September, 1934, by which the new company was constituted the agent of the contractors for the prosecution of the work without relinquishment of their obligations.

Footnote 4 'United States Department of the Interior'Office of the Secretary, Washington'Jan - 4 1934'Bureau of Reclamation'Mails and Files, Jan 5 1934'Washington, D.C.'State Commissioner of Public Lands,'Olympia, Washington.'Dear Sir:'Please take notice that pursuant to the Act of Congress of June 17, 1902 (32 Stat. 388) and acts amendatory thereof or supplementary thereto, the United States intends to make examinations and surveys for the utilization of the waters of Columbia River and its tributaries in the development of the proposed Columbia Basin Project.'The foregoing notice is given pursuant to Section 3378 of Pierce's Code (1929).'Please take further notice that attached hereto, identified as 'Exhibit A' and made a part hereof is a list of lands owned by the

State of Washington, over and upon which the United States requires rights of way for canals, ditches, laterals and sites for reservoirs and structures appurtenant thereto; and such additional rights of way and quantities of land as may be required for the operation and maintenance of the completed works for the said proposed Columbia Basin Project. Please file this notice, together with the attached list, in your office, as a reservation from sale or other disposition of such lands, so described, by the State of Washington.'The notice last herein given is in pursuance of Section 3380 of Pierce's Code (1929).'Very truly yours,'(Signed) T. A. Walters,'First Assistant Secretary.'

Footnote 5 ' 7410. Exemptions pending federal investigation. Whenever the secretary of the interior of the United States, or any officer of the United States duly authorized, shall notify the commissioner of

Footnote 6 ' 8108. Consent to acquisition of certain rights by United States, etc. The consent of the state of Washington be and the same is hereby given to the acquisition by purchase or by condemnation, under the laws of this state relating to the appropriation of private property to public uses, by the United States of America, or under the authority of the same, of any tract, piece, or parcel of land, from any individual or individuals, bodies politic or corporate, within the boundaries or limits of this state, for the sites of locks, dams, piers, breakwaters, keepers' dwellings, and other necessary structures and purposes required in the improvement of the rivers and harbors of this state, or bordering thereon, or for the sites of forts, magazines, arsenals, docks, navy-yards, naval stations, or other needful buildings authorized by any act of congress, and all deeds, conveyances of title papers for the same shall be recorded as in other cases, upon the land records of the county in which the land so acquired may lie; and in like manner may be recorded a sufficient description by metes and bounds, courses and distances, of any tract or tracts, legal divisions or subdivisions of any public land belonging to the United States, which may be set apart by the general government for any or either of the purposes before mentioned by an order, patent, or other official document or papers describing such lands; the consent herein and hereby given being in accordance with the seventeenth clause of the eighth section of the first article of the Constitution of the United States, and with the acts of congress in such cases made and provided; and the jurisdiction of this state is hereby ceded to the United States of America over all such land or lands as may have been or may be hereafter acquired by purchase or by condemnation, or set apart by the general government for any or either of the purposes before mentioned: Provided, that this state shall retain a concurrent jurisdiction with the United States in and over all tracts so acquired or set apart as aforesaid, so far as that all civil and criminal process that may issue under the authority of this state against any person or persons charged with crimes committed, or for any cause of action or suit accruing without the bounds of any such tract, may be executed therein, in the same manner and with like effect as though this assent and cession had not been granted.'