DUTIES ON EXPORTS OR IMPORTS
Only articles imported from or exported to a foreign country, or “a place over which the Constitution has not extended its commands with respect to imports and their taxation,” are comprehended by the terms “imports” and “exports.”2230 With respect to exports, the exemption from taxation “attaches to the export and not to the article before its exportation,”2231 requiring an essentially factual inquiry into whether there have been acts of movement toward a final destination constituting sufficient entrance into the export stream as to invoke the protection of the clause.2232 To determine how long imported wares remain under the protection of this clause, the Supreme Court enunciated the original package doctrine in the leading case of Brown v. Maryland. “When the importer has so acted upon the thing imported,” wrote Chief Justice Marshall, “that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the State; but while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports, to escape the prohibition in the Constitution.”2233 A box, case, or bale in which separate parcels of goods have been placed by the foreign seller is regarded as the original package, and upon the opening of such container for the purpose of using the separate parcels, or of exposing them for sale, each loses its character as an import and becomes subject to taxation as a part of the general mass of property in the state.2234 Imports for manufacture cease to be such when the intended processing takes place,2235 or when the original packages are broken.2236 Where a manufacturer imports merchandise and stores it in his warehouse in the original packages, that merchandise does not lose its quality as an import, at least so long as it is not required to meet such immediate needs.2237 The purchaser of imported goods is deemed to be the importer if he was the efficient cause of the importation, whether the title to the goods vested in him at the time of shipment, or after its arrival in this country.2238 A state franchise tax measured by properly apportioned gross receipts may be imposed upon a railroad company in respect of the company’s receipts for services in handling imports and exports at its marine terminal.2239
A state law requiring importers to take out a license to sell imported goods amounts to an indirect tax on imports and hence is unconstitutional.2240 Likewise, a franchise tax upon foreign corporations engaged in importing nitrate and selling it in the original packages,2241 a tax on sales by brokers2242 and auctioneers2243 of imported merchandise in original packages, and a tax on the sale of goods in foreign commerce consisting of an annual license fee plus a percentage of gross sales,2244 have been held invalid. On the other hand, pilotage fees,2245 a tax upon the gross sales of a purchaser from the importer,2246 a license tax upon dealing in fish which, through processing, handling, and sale, have lost their distinctive character as imports,2247 an annual license fee imposed on persons engaged in buying and selling foreign bills of exchange,2248 and a tax upon the right of an alien to receive property as heir, legatee, or donee of a deceased person2249 have been held not to be duties on imports or exports.
Overruling a line of prior decisions that it thought misinterpreted the language of Brown v. Maryland, the Court now holds that the clause does not prevent a state from levying a nondiscriminatory, ad valorem property tax upon goods that are no longer in import transit.2250 Thus, a company’s inventory of imported tires maintained at its whole distribution warehouse could be included in the state’s tax upon the entire inventory. The clause does not prohibit every “tax” with some impact upon imports or exports but reaches rather exactions directed only at imports or exports or commercial activity therein as such.2251
Inspection laws “are confined to such particulars as, in the estimation of the legislature and according to the customs of trade, are deemed necessary to fit the inspected article for the market, by giving the purchaser public assurance that the article is in that condition, and of that quality, which makes it merchantable and fit for use or consumption.”2252 In Turner v. Maryland,2253 the Court listed as recognized elements of inspection laws, the “quality of the article, form, capacity, dimensions, and weight of package, mode of putting up, and marking and branding of various kinds . . . ”2254 It sustained as an inspection law a charge for storage and inspection imposed upon every hogshead of tobacco grown in the state and intended for export, which the law required to be brought to a state warehouse to be inspected and branded. The Court has cited this section as a recognition of a general right of the states to pass inspection laws, and to bring within their reach articles of interstate, as well as of foreign, commerce.2255 But on the ground that, “it has never been regarded as within the legitimate scope of inspection laws to forbid trade in respect to any known article of commerce, irrespective of its condition and quality, merely on account of its intrinsic nature and the injurious consequence of its use or abuse,” it held that a state law forbidding the importation of intoxicating liquors into the state could not be sustained as an inspection law.2256
- Hooven & Allison Co. v. Evatt, 324 U.S. 652, 673 (1945). Goods brought from another State are not within the clause. Woodruff v. Parham, 75 U.S. (8 Wall.) 123 (1869). Justice Thomas has called recently for reconsideration of Woodruff and the possible application of the clause to interstate imports and exports. Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 609, 621 (1997) (dissenting).
- Cornell v. Coyne, 192 U.S. 418, 427 (1904).
- Richfield Oil Corp. v. State Bd. of Equalization, 329 U.S. 69 (1946); Empress Siderurgica v. County of Merced, 337 U.S. 154 (1947); Kosydar v. National Cash Register Co., 417 U.S. 62 (1974).
- 25 U.S. (12 Wheat.) 419, 441–42 (1827).
- May v. New Orleans, 178 U.S. 496, 502 (1900).
- 178 U.S. at 501; Gulf Fisheries Co. v. MacInerney, 276 U.S. 124 (1928); McGoldrick v. Gulf Oil Corp., 309 U.S. 414 (1940).
- Low v. Austin, 80 U.S. (13 Wall.) 29 (1872); May v. New Orleans, 178 U.S. 496 (1900).
- Hooven & Allison Co. v. Evatt, 324 U.S. 652, 667 (1945). But see Limbach v. Hooven & Allison Co., 466 U.S. 353 (1984) (overruling the earlier decision).
- 324 U.S. at 664.
- Canton R.R. v. Regan, 340 U.S. 511 (1951).
- Brown v. Maryland, 25 U.S. (12 Wheat.) 419, 447 (1827).
- Anglo-Chilean Corp. v. Alabama, 288 U.S. 218 (1933).
- Low v. Austin, 80 U.S. (13 Wall.) 29, 33 (1872).
- Cook v. Pennsylvania, 97 U.S. 566, 573 (1878).
- Crew Levick Co. v. Pennsylvania, 245 U.S. 292 (1917).
- Cooley v. Board of Wardens, 53 U.S. (12 How.) 299, 313 (1851).
- Waring v. The Mayor, 75 U.S. (8 Wall.) 110, 122 (1869). See also Pervear v. Massachusetts. 72 U.S. (5 Wall.) 475, 478 (1867); Schollenberger v. Pennsylvania, 171 U.S. 1, 24 (1898).
- Gulf Fisheries Co. v. MacInerney, 276 U.S. 124 (1928).
- Nathan v. Louisiana, 49 U.S. (8 How.) 73, 81 (1850).
- Mager v. Grima, 49 U.S. (8 How.) 490 (1850).
- Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976), overruling Low v. Austin, 80 U.S. (13 Wall.) 29 (1872), expressly, and, necessarily, Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945), among others. The latter case was expressly overruled in Limbach v. Hooven & Allison Co., 466 U.S. 353 (1984), involving the same tax and the same parties. In Youngstown Sheet & Tube Co. v. Bowers, 358 U.S. 534 (1959), property taxes were sustained on the basis that the materials taxed had lost their character as imports. On exports, see Selliger v. Kentucky, 213 U.S. 200 (1909) (property tax levied on warehouse receipts for whiskey exported to Germany invalid). See also Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 76–78 (1993), and see id. at 81–82 (Justice Scalia concurring).
- Michelin Tire Corp. v. Wages, 423 U.S. 276, 290–94 (1976). Accord, R. J. Reynolds Tobacco Co. v. Durham County, 479 U.S. 130 (1986) (tax on imported tobacco stored for aging in customs-bonded warehouse and destined for domestic manufacture and sale); but cf. Xerox Corp. v. County of Harris, 459 U.S. 145, 154 (1982) (similar tax on goods stored in customs-bonded warehouse is preempted “by Congress’s comprehensive regulation of customs duties;” case, however, dealt with goods stored for export).
- Bowman v. Chicago & Nw. Ry., 125 U.S. 465, 488 (1888).
- 107 U.S. 38 (1883).
- 107 U.S. at 55.
- Patapsco Guano Co. v. North Carolina, 171 U.S. 345, 361 (1898).
- Bowman v. Chicago & Nw. Ry., 125 U.S. 465 (1888). The Twenty-first Amendment has had no effect on this principle. Department of Revenue v. Beam Distillers, 377 U.S. 341 (1964).