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Home > Journals > Michigan Law Review > MLR > Volume 49 > Issue 8 (1951)

 

Abstract

Appellant, a Missouri corporation, was domiciled in Illinois and engaged in interstate trucking of commodities to and from Connecticut. The appellant had twenty-seven employees, office equipment, pick-up trucks and two terminals within Connecticut. Approximately one-third to one-half of appellant's business originated in Connecticut, but a very small percentage of the total mileage traveled by its trucks lay within the state. Appellant was not engaged in intrastate commerce, nor had it been authorized to transact such business. Under the Connecticut Corporation Business Tax Act of 1935 appellant was assessed for taxes and penalties. The statute imposed a franchise tax upon certain corporations for the privilege of carrying on business within the state. The tax was computed by taking a percentage of the entire net income of the corporation, but detailed apportionment provisions related the amount collected to that part of a corporation's business which was attributable to the taxing state. Appellant sought to enjoin collection of the tax. The state court found that the tax applied to the appellant although it was engaged exclusively in interstate business. The federal district court held the enactment unconstitutional. On appeal, the court of appeals reversed, holding that interstate commerce can be required to pay its share of ordinary governmental expense incurred in guaranteeing the privilege and protection which the state affords. The Supreme Court reversed. Held, the privilege of engaging in purely interstate commerce cannot be taxed by a state in the absence of Congressional consent. Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602, 71 S.Ct. 508 (1951).

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