Memphis Natural Gas Company v. Stone/Concurrence Rutledge

by Wiley Blount Rutledge

United States Supreme Court

335 U.S. 80

Memphis Natural Gas Company  v.  Stone

 Argued: Dec. 8, 1947. --- Decided: June 21, 1948

Mr. Justice RUTLEDGE, concurring.

In accordance with views which I have heretofore expressed, ^[1] it is enough for me to sustain the tax imposed in this case that it is one clearly within the state's power to lay insofar as any limitation of due process or 'jurisdiction to tax' in that sense is concerned; ^[2] it is nondiscriminatory, that is, places no greater burden upon interstate commerce than the state places upon competing intrastate commerce of like character; ^[3] is duly apportioned, that is, does not undertake to tax any interstate activities carried on outside the state's borders; ^[4] and cannot be repeated by any other state. ^[5]

In this view the tax is not different in any substantial respect, for purposes of the commerce clause's prohibitive application, from the apportioned tax upon grss receipts from interstate transportation levied by New York and sustained by the decision recently rendered in Central Greyhound Lines v. Mealey, 334 U.S. 653, 68 S.Ct. 1260. ^[6] That tax is nonetheless one upon the commerce, although it is apportioned. The apportionment, however, guards it from the vice of taxing commerce done in other states and thus also from multiplication by them. ^[7] In my view the same consequence follows here, in practical effect, both for the bearing of the tax and for saving its validity.

It may be that for the pr poses of this case there is little more than a verbal difference in so regarding the tax and in looking at it as one not 'upon' the commerce, although affecting it, but as being laid upon 'incidents of the commerce' or 'taxable events' taking place in Mississippi which are regarded as being 'sufficiently separate from' the commerce, whether by reason of the pportionment of otherwise, to sustain the tax. To the extent that no greater difference is presently involved, I accept the Court's conclusions and its reasoning.

But the difference conceivably may be of large, indeed of controlling, importance for other cases. And, so far as this may be true, I am unable to revert to rationalizations which make merely verbal formulae without reflection of differences in substantive effects controlling in these matters.

The New York legs of the journey involved in the Central Greyhound case, supra, are interstate commerce, as much as those in New Jersey and Pennsylvania. They do not lose that character merely because an apportioned tax may be levied upon the gross receipts from them. The incidence of that tax is flatly on the commerce, though only on the local portion of it. So here I do not think that the local activities for the protection of which the Mississippi tax purports in terms to be laid become separate from the interstate business which petitioner conducts in Mississippi, either by reason of the apportionment or otherwise. But they are incidents of carrying on that business taking place in Mississippi and only there, for which Mississippi affords protection received from no other state or the United States. Nor can any other state give that protection. For that portion of the business and the protection given it, I think the state is entitled to levy such a tax as has been placed here. Nothing in the commerce clause or its great purposes forbids such an exaction. Nor is the state limited to a single exaction for different or indeed like protections afforded, so long as each is safeguarded against prohibited effects upon commerce, as are those laid by Mississippi, and their aggregate cannot be shown to contravene the clause's purpose.

Accordingly, I concur in the Court's judgment.

Mr. Justice FRANKFURTER, with whom The CHIEF JUSTICE, Mr. Justice JACKSON, and Mr. Justice BURTON concur, dissenting.

Notes

1. See McLeod v. Dilworth Co., 322 U.S. 327, 64 S.Ct. 1023, 88 L.Ed. 1304; General Trading Co. v. Tax Comm'n, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309; International Harvester Co. v. Dept. of Treasury, 322 U.S. 340, separate opinion, id. 349, 64 S.Ct. 1019, 1023, 88 L.Ed. 1313; Freeman v. Hewit, 329 U.S. 249, concurring opinion at 259, 67 S.Ct. 274, 280, 91 L.Ed. 265.
2. See 322 U.S. at 352, 353, 64 S.Ct. 1032, 88 L.Ed. 1309; Nippert v. Richmond, 327 U.S. 416, 423, 424, 66 S.Ct. 586, 589, 590, 90 L.Ed. 760, 162 A.L.R. 844.
3. See Miss.Code § 9313 (1942), imposing a comparable tax, of identical amount, upon companies organized under Mississippi laws. Intrastate business done in the state obviously would be subject to one tax or the other, depending on whether the company doing it were organized under the state's laws or those of another state.
4. The statute, Miss.Code §§ 9313 and 9314 (1942), expressly measures and limits the tax by an amount 'equal to $1.50 of each $1,000.00 or fraction thereof of the value of capital used, invested or employed within this state * * *.' (Emphasis added.)
5. Cf. note 4. Apportionment in itself prevents taxation of extrastate 'events' or portions of the business done, unless the apportionment is itself constitutionally invalid as not reflecting a sufficient approximation to what the state may be entitled, on the facts, to tax. Cf. Stone, C.J., dissenting in Northwest Airlines v. Minnesota, 322 U.S. 292, 315, 316, 64 S.Ct. 950, 961, 962, 88 L.Ed. 1283, 153 A.L.R. 245, and authorities cited.
6. It is, of course, for New York to say whether its tax will be applied upon the apportioned basis permitted by the Court's opinion. There would seem to be little doubt that such an application will be made, in view of the state's alternative argument here for sustaining the tax to that extent in the event its unapportioned application should be found invalid.
7. See Freeman v. Hewit, 329 U.S. 249, 266, 67 S.Ct. 274, 283, 91 L.Ed. 265 (concurring opinion) and authorities cited.

That the apportionment in the one case is made in relation to mileage and in the other to the value of capital 'used, invested or employed within this state' is of no significance, since the states have considerable latitude in the selection of fair methods of making apportionment. Cf. note 5.