Page images
PDF
EPUB

tical construction put upon the law by those charged with its enforcement through many years is a circumstance sometimes entitled to considerable weight; but when a statute clearly requires the taxation of a certain class of property, it is immaterial that no tax has been levied thereon in preceding years. It is only when a statute is of doubtful import and the practice of the officers charged with the duty of assessing taxes has been long continued and acquiesced in by all parties interested that it can be resorted to in aid of the construction of the statute.

12. Limitations upon the Taxing Power of the States in the Constitution of the United States

The power of taxation of each state over persons, property, privileges, occupations and acts within its jurisdiction is limited or restricted by a number of different provisions in the constitution of the United States. The provisions which specifically limit the power of taxation in the states are as follows:

(1) No state may lay duties on exports or imports (Art. I, Section 10).

(2) No state without the consent of Congress may lay any duty of tonnage (Art. I, Section 10).

The provisions which limit the governmental powers of the states generally and are applicable to taxation as well as to other powers are as follows:

(1) No state shall pass any law impairing the obligation of contracts (Art. I, Section 10).

(2) The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states (Art. IV, Section 2). (3) All treaties made under the authority of the United States shall be the supreme law of the land (Art. VI).

(4) No state shall deprive any person of life, liberty or property without due process of the law, nor deny to any person within its jurisdiction the equal protection of the laws (Amendment 14).

7 Tyler v. Treasurer & Receiver General, 226 Mass. 306 (1917). The practice of a single year is of no materiality, Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921).

8 Attorney General v. Barney, 211 Mass. 134 (1912); A. J. Tower Co. v. Commonwealth, 223 Mass. 371, 375 (1916); Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 (1917).

The power of taxation in the several states is further restricted by implication in the constitution of the United States in the following manner:

(1) No state may tax property or agencies of the United States. (2) No state may impose a burden on foreign or interstate

commerce.

EXPRESS LIMITATIONS OF THE FEDERAL

CONSTITUTION

13. Duties on Imports and Exports

The constitution of the United States contains in Article I, Section 10, the following provision:

No State shall, without the consent of Congress, lay any imposts. or duties on imports or exports except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts, laid by any State on imports or exports, shall be for the use of the Treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.

Imports and exports within the meaning of this clause include only property arriving in the United States or sent therefrom, from or to a foreign country, and this clause accordingly does not apply to goods sent from one state to another,1 to passengers travelling from one state to another, or to passengers entering the United States. It is not competent for a state to tax imported goods until they have lost their character as imports after arriving at their destination and becoming mingled with the other property in the state. Such mingling is effected by their being taken from their original packages, sold, or of

3

5

1 Woodruff v. Parham, 8 Wall. 123 (1868); Brown v. Houston, 114 U. S. 622 (1885); Coe v. Errol, 116 U. S. 527 (1886); Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 350 (1898); American Steel etc. Co. v. Speed, 192 U. S. 500 (1904).

2 Crandall v. Nevada, 6 Wall. 40 (1867). It was held however that a tax on passengers leaving or passing through the state while not obnoxious as a tax on exports was objectionable as tending to embarrass the legitimate operations of officers of the United States.

3 People v. Compagnie Generale Transatlantique, 107 U. S. 61 (1882). Brown v. Maryland, 12 Wheat. 441 (1827); Low v. Austin, 13 Wall. 33

(1871).

5 May v. New Orleans, 178 U. S. 502 (1900). The original package is the case, box or bale in which the articles are packed for transportation, and no single article therein, though separately wrapped, is an original package. May v. New Orleans, 178 U. S. 496 (1900).

6 Waring v. Mobile, 8 Wall. 110 (1868).

fered for sale. Goods in a state being manufactured or prepared for export are subject to taxation by the state until they have started on their ultimate journey to a foreign country or have been committed to the carrier for the purpose of such a journey. Capital continuously invested in goods in export is taxable by the state if it was in the form of money on the day when the tax was assessed."

It is clearly unconstitutional for a state to require a license for the sale of imported goods,1o or to attempt to make an excise, imposed on sales generally, applicable to the sale of foreign goods in the original package by the person who imported them." A stamp tax on bills of lading so far as it applies to bills of lading upon goods sent to a foreign country is objectionable as a duty upon exports,12 but no such objection is open to a stamp tax upon bills of exchange.13 A state law imposing pilotage fees is not a duty upon imports or exports.1

15

A legitimate inspection law may be enforced by imposing a fee for inspection, and even if such charge is a duty on imports or exports it is within the exception contained in the clause of the constitution now under consideration.1 The right of inspection is not based upon the theory that the articles to be inspected are dangerous or noxious, but rests upon the power of the state to see that articles exported or imported are fit for use 16 and packed in such a way that they may be subsequently identified.1

The exception in this clause, like the rule itself, applies only to property, and a state tax upon immigrants cannot be justified as an "inspection law."18 As far as the size of the inspection fee is concerned, a state statute will not be held invalid unless the charge is so excessive as to clearly denote bad faith.1o

7 American Steel Co. v. Speed, 192 U. S. 520 (1904).

8 Coe v.

Errol, 116 U. S. 577 (1886).

• New York v. Taxes etc. Commissioners, 104 U. S. 466 (1881). 10 Brown v. Maryland, 12 Wheat, 441 (1827).

11 Cook v. Pennsylvania, 97 U. S. 573 (1878).

12 Almy v.

California, 24 How. 174 (1860).

13 Nathan v. Louisiana, 8 How. 81 (1850).

14 Cooley v. Board of Wardens, 12 How. 313 (1851).

15 Turner v. Maryland, 107 U. S. 38, 57 (1882).

16 Bowman v. Chicago, etc.. R. R. Co., 125 U. S. 488 (1887).

17 Turner v. Maryland, 107 U. S. 38 (1882).

18 People v. Compagnie Generale Transatlantique, 107 U. S. 63 (1882).

19 Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 350 (1898).

14. Duties of Tonnage

The constitution of the United States contains in Article I, Section 10, the following provision:

"No state shall, without the consent of Congress, lay any duty of tonnage. . . .

[ocr errors]

A duty of tonnage is a charge upon a vessel according to its size or capacity, for the privilege of navigating the waters of a state or of entering or leaving a port therein, and any such charge is forbidden by this clause of the constitution,1 even if the vessel so taxed belongs to citizens of the state imposing the tax,2 and plies only within the waters of the state.3

A tax upon vessels as property imposed by the state in which they belong and based upon their value as property and not upon their capacity is not a duty of tonnage and is not obnoxious to this clause of the constitution. So also a municipal ferry license fee not graduated by the size of the ferry boats is not a duty of tonnage. On the other hand a fee for the use of services furnished to vessels by the public authorities, though graded in accordance with the capacity of the vessel, is not a duty of tonnage, because it is not a tax of any description; but a tonnage tax cannot be imposed under the guise of such a charge. Thus a fee for the use of a wharf proportioned to the size of the vessel using it is a wharfage charge, not a tonnage tax, and it is not made a tax by the circumstance that the wharf used belongs to a municipality, or even that the municipality has the exclusive right to erect wharves within its limits. A charge imposed whether a vessel ties up to a wharf or not cannot however be sustained as a wharfage charge. A pilotage fee is not a tonnage tax, but a state

8

1 Southern Steamship Co. v. Portwardens, 6 Wall. 31 (1867); State Tonnage Tax Cases, 12 Wall, 210 (1870); Inman Steamship Co. v. Tinker, 94 U. S. 243 (1876); Huse v. Glover, 119 U. S. 549 (1886).

2 State Tonnage Tax Cases, 12 Wall. 210 (1870); Wheeling etc. Transportation Co. v. Wheeling, 99 U. S. 273 (1878).

3 State Tonnage Tax Cases, 12 Wall, 210 (1870).

• Wheeling Transportation Co. v. Wheeling, 99 U. S. 283 (1878).

5 Wiggins Ferry Co. v. St. Louis, 107 U. S. 365 (1882).

• Northwestern Union Packet Co. v. St. Louis, 100 U. S. 427 (1879); Parkersburg, etc., Transportation Co. v. Parkersburg, 107 U. S. 696 (1882); Onachita Packet Co. v. Aiken, 121 U. S. 448 (1886).

? Keokuk Northern Line Packet Co. v. Keokuk, 95 U. S. 84 (1877).

8 Cannon v. New Orleans, 20 Wall. 580 (1874).

• Cooley v. Board of Wardens, 12 How. 313 (1851).

10

statute imposing a harbor master's fee on every vessel entering a port whether the harbor master performs any service or not is void as a tonnage tax.1o A toll exacted by the state upon vessels in proportion to tonnage for passing through waterways made navigable by the state is not a tonnage tax," and the same is true of the quarantine fee imposed as a charge for actual service;12 but a tonnage tax imposed to pay the expenses of the quarantine system of a state is not valid.13

15. Impairment of the Obligation of Contracts

The constitution of the United States provides in Article I, Section 10, that no state shall pass any law impairing the obligation of contracts. This provision affects and limits the taxing powers of the states in a number of different ways. Thus while it is generally considered that there is nothing in this provision which prohibits a state from taxing its own bonds as property in the hands of individual owners of the bonds, where the bonds were not declared to be tax exempt when issued, yet it is well settled that such a tax cannot be enforced by withholding the amount of the tax from the interest paid on the bonds. When it is provided in a statute under authority of which the bonds of a state are issued that the coupons or interest warrants on the bonds shall be received at their face value in the payment of all taxes due to the state, such a provision cannot be constitutionally repealed after the bonds are issued.2

A tax itself is not a contractual obligation and a state by assessing and collecting a tax which under the laws then in force is imposed annually does not impliedly contract with the tax

10 Southern Steamship Co. v. Portwardens, 6 Wall. 31 (1867).

11 Huse v. Glover, 119 U. S. 547 (1886).

12 Morgan's Steamship Co. v. Louisiana, 118 U. S. 463 (1885).

13 Peette v. Morgan, 19 Wall. 582 (1873).

1 Murray v. Charleston, 96 U. S. 432 (1877); Hartman v. Greenhow, 102 U. S. 672 (1880).

2 Woodruff v. Trapnall, 10 How. 190 (1850); Furman v. Nichol, 8 Wall. 44 (1868); State v. Stoll, 17 Wall. 425 (1873); Hartman v. Greenhow, 102 U. S. 672 (1880); Poindexter v. Greenhow, 114 U. S. 270 (1884); McGahey v. Virginia, 172 U. S. 102 (1890). A bond-holder cannot by writ of mandamus compel the state authorities to accept the coupons, Antoni v. Greenhow, 107 U. S. 769 (1882), but he may tender the coupons in payment of his tax and subsequently resist in court any proceedings to collect the tax in money, and if the officers of the state attempt to enforce payment of the tax by summary proceedings he may recover damages from them as tortfeasors. Poindexter v. Greenhow, 114 U. S. 270 (1884); McGahey v. Virginia, 172 U. S. 102 (1890).

« PreviousContinue »