TAXATION - EXEMPTION OF STATE INSTRUMENTALITY FROM FEDERAL TAX

Authors

Francis T. Goheen, University of Michigan Law School

Abstract

A federal statute provided that "Upon all tobacco and snuff manufactured or imported into the United States, and hereafter sold by the manufacturer or importer, or removed for consumption or sale, there shall be levied, collected, and paid . . . a tax of 18 cents per pound, to be paid by the manufacturer or importer thereof." The company received an order to deliver a quantity of tobacco to a hospital owned by the State of Massachusetts; the company complied by shipping tobacco which had been previously stamped in accordance with the regulations under the above statute. The state paid for the tobacco including the sale price plus the tax laid. The state, and the company on behalf of the state, brought suit to recover the tax paid. Held (by a unanimous court) that the tax was a levy on the manufacturer of the tobacco, that the effect on the state was indirect and that therefore the statute did not violate the constitutional principle safeguarding the state government against federal taxation. Liggett & Myers Tobacco Co. v. United States, (U. S. 1937) 57 S. Ct. 239.

Recommended Citation

Francis T. Goheen, TAXATION - EXEMPTION OF STATE INSTRUMENTALITY FROM FEDERAL TAX, 35 Mich. L. Rev. 1027 (1937).
Available at: https://repository.law.umich.edu/mlr/vol35/iss6/24