CONSTITUTIONAL LAW-STATE TAXATION OF INTERSTATE COMMERCE -VALIDITY OF APPORTIONED CAPITAL TAX ON CORPORATION ENGAGED SOLELY IN INTERSTATE COMMERCE

Authors

R. V. Wellman S.Ed., University of Michigan Law SchoolFollow

Abstract

Plaintiff gas company, a Delaware corporation, transported gas by pipe line across a section of Mississippi. Its activities in Mississippi admittedly did not constitute intrastate commerce and plaintiff had no agent for service of process in that state. Mississippi imposed a "franchise or excise" tax on all· corporations present in the state, measured by applying a specified rate against the value of the capital employed within its boundaries. This tax was in addition to, and independent of, the locally imposed ad valorem taxes levied against plaintiff's property. Alleging the franchise tax to be invalid under the commerce clause of the Federal Constitution, plaintiff filed its petition for review before the State Tax Commission of Mississippi. In subsequent appellate proceedings, the Supreme Court of Mississippi held that the challenged levy was not a tax on the privilege of engaging in interstate commerce, but that it was valid recompense to the state for the protection afforded plaintiff's local installations. On writ of certiorari, held, affirmed. Justice Reed, writing for the majority, found the tax to be not upon commerce but upon a taxable local event which could not be made the subject of cumulative levies by other states. Justice Rutledge concurred specially and Justice Black concurred in the judgment. Justice Frankfurter was joined in dissent by Chief Justice Vinson and by Justices Jackson and Burton. Memphis Natural Gas Co. v. Stone, 335 U.S. 80, 68 S.Ct. 1475 (1948).

Recommended Citation

R. V. Wellman S.Ed., CONSTITUTIONAL LAW-STATE TAXATION OF INTERSTATE COMMERCE -VALIDITY OF APPORTIONED CAPITAL TAX ON CORPORATION ENGAGED SOLELY IN INTERSTATE COMMERCE, 47 Mich. L. Rev. 115 (1948).
Available at: https://repository.law.umich.edu/mlr/vol47/iss1/15