City of Chicago v. Willett Co.

COMPANY. v. WILLETT CHICAGO OF CITY February 9, 1953. 17, 1952. Decided Argued October No. 23. With petitioner. for the cause argued Magid Arthur Louis L. Mortimer John J. were the brief on him Karton. respond- cause argued Snewind Dana

Charles J. Lunch were William brief him ent. With George J. Schaller. opinion delivered Frankfurter

Mr. validity on the pass upon arewe called more Once commerce upon measure in some which falls aof tax us, before In the situation States.” the several “among it is not a imposed on interstate commerce as such. It a tax intended to fall on business done “within the city” it, levies although part in is imposed it on car- riers of intrastate and interstate commerce inseparably commingled. The tax is on trucks and is levied ordinance of the of City Chicago, of which the relevant portions are set out in the margin.1 It graduated ac- cording to size, ranging from $8.25 on a truck noof more than two-ton capacity $16.50 to on a truck of more than four-ton capacity. Penalties provided are for failure to pay the tax.

Respondent is an Illinois corporation and has its place of business in It Chicago. owns a fleet of trucks which it employs to transport goods within Chicago, between Chicago and other points Illinois, and between Chi- cago, and points other in Illinois, points in Indiana 1 “Every . . . truck . . . which operated shall be pur ... for the pose of transporting goods . . . . . . within city the for hire or reward, shall be deemed a cart .... “Any person engaged in the business operating of a cart shall be deemed a carter. “An annual imposed license tax is upon every carter for each cart operated or controlled by him, according following to the schedule:

“Automotive vehicles— Capacity exceeding two $8.25 tons.. Capacity tons_ exceeding two but not exceeding three 11.00

Capacity exceeding three but not exceeding four tons.... 13.20 Capacity exceeding four tons. 16.50 “It shall be unlawful any person to engage in the business of a carter having without first paid such license tax. “Any person violating any of provisions the of this chapter shall be fined Municipal Code Chicago, of c. Journal of the Proceedings of City the Council of the City of Chicago, Illinois, January 14, 1949, p. 3679. respondent’s of each stipulated It Wisconsin. carries year day single every “during vehicles . . . city leaves never property with along it State outside point to some destined property

Illinois.” present pay failure respondent’s Upon Chicago City instituted were

proceedings against gone having verdict Municipal appeal, Illinois, on City, respond- holding that acquittal, the judgment affirmed it “can- because tax” license subject “not was ent part any discontinue nor can loads, separate Co., 406 Ill. Chicago Willett service.” 200. 195, E. 2d 94 N. 295, opinion court’s Illinois by the in doubt left

Being not, because ordinance that held it had whether re- to applied validly Clause, be of the Commerce as so ordinance had construed situation spondent’s cer- granted we respondent’s, like situation not to cover A S. 913. 341 U. for clarification. remanded tiorari that doubt no us in left holding of restatement aon affirmance rest its not Illinois did of excluding re- ordinance, of construction restrictive applied as found but scope, spondent the Commerce of afoul runs the ordinance respondent 101 480, Ill. Co., 409 Chicago v. Willett Clause. judg- to review certiorari granted We 205. 2dE.N. to the importance questions raises it because ment 940. S. 343 U. centers. transportation major Nation’s be, that must course admitted, being once “It States among commerce affects every law dis- sense, nice constitutional in a it regulation ais Harrisburg & Galveston, expected.” be are tinctions This 225. 217, S. Texas, 210 U. v. R. Co. Antonio San often encountered so difficulties raise does 577 when determination of the validity State action affect- ing interstate requires commerce an be- accommodation tween a State’s undoubted power over its own internal commerce and the national interest in the unrestricted flow of interstate commerce. This as it tax, falls on respondent, corporation having its place of in Chicago, is clearly unassailable under the authority New York Miller, Central R. Co. v. 202 U. S. 584, which Airlines, we reaffirmed Northwest Inc. v. Minnesota, 322 U. S. However, 292. “nice distinc- tions” have been argued they to us and be should considered.

It is said the one hand that Florida, Osborne v. 164 U. S. 650, Pullman Adams, Co. v. 420, U. S. Pacific Telephone Co. v. Commission, Tax S. 403, U. decide this case, and on the other that it is controlled cases such as Adams Express York, v.Co. New U. S. Bowman v. Co., Continental Oil 642, Sprout U. S. South Bend, 277 U. S. Cooney v. Mountain States Co., Telephone 294 U. S. 384. As was true Telephone Co. v. Tax Commission, supra, the tax- payer’s principal argument in this case has been that the tax is necessarily void because the taxpayer is not free to withdraw from the local business, which alone the statute purports to tax, without discontinuing in- terstate business well. Respondent as relies on heavily Sprout v. South supra. But Mr. Brandéis, who wrote for the Court in Sprout, pointed in out the Telephone case that in Sprout taxpayer the could Pacific not avoid the tax by restricting himself to interstate busi- ness only and withdrawing from local business, because the tax, by its terms, fell on exclusively interstate, as well as intrastate, business conducted from the City of South Bend. 297 S.,U. at 416-417. That was the controlling in fact Sprout, which was absent the Telephone Pacific the also, since case this is absent and case, ordinance Chicago the us has told Court do which trucks on a tax imposing as be read not to v. Chicago City. the within carry goods at 2d, E.N. 289-290, at Ill., Co., supra, Willett re- pressed point main the regards Thus, 197-198. bare laid infirmity the avoids tax Chicago the spondent, v. Osborne facts the meets and case, Sprout the did Adams, supra, as v.Co. Pullman Florida, supra, Tele- inas Again, case. Telephone Pacific the Pacific tax, the showing no makes here taxpayer the phone, bur- in fact only, intrastate at though directed taxpayer for the This is commerce. interstate dens attempt no made has respondent affirmatively show do so. basis the upon to decide necessary it were But, if not rest us, we upon urged “nice distinctions” Telephone. authority on more without by percentage measured was in that the tax For business. intrastate solely drawn income gross activi interstate intrastate taxpayer’s Although inseparably not laid was the tax inseparable, ties were case. in this not true That at 414. S., 297 U. both. called been have on what inseparably falls Here at are commerce, interstate instrumentalities in Whatever commerce. of intrastate those also once sit in other may have difference this significance trinsic controlled, as in a case irrelevant uations, becomes Central York of New principles governing one, by Miller, supra.2 v. R. Co. in Adams not considered was Miller Co., Oil v. Continental York, supra; Bowman

Express New Co. supra; Co., Telephone Cooney States v. Mountain supra; first facts of the inapplicable to Bend, supra. was It v. South surrounding im- Express, circumstances In Adams three cases. In the Miller case, the a taxpayer, railroad company, was “a York New corporation owning or hiring lines without as well as within the State . . . and sending its cars to points without as well as within the State, and over other lines as well own.” its S.,U. at 593. The cars were often not in the company’s possession for some time. The State of York New levied a tax com puted on the basis of the amount of capital stock employed within the State. The Court held that railroad’s property could constitutionally be subjected to this New York, as that State was its permanent situs, “notwithstanding its occasional excur to foreign sions parts.” S.,U. at 597; see Northwest Minnesota, Airlines v. supra, 322 U. atS., 299, n. 4. In the Northwest Airlines case, the a taxpayer, Minnesota corporation, used St. Paul as the home port for all its planes. The rebuilding and overhauling of planes was done St. Paul. Minnesota assessed a tax against the airline on the basis of the entire coming fleet into the State. held, We on the authority of the Miller case, that given “[t]he benefits to Northwest by Minnesota and for which Minnesota taxes —its corporate facilities and the governmental resources which Northwest enjoys conduct of its business in Minnesota —are concretely symbolized by the fact that Northwest’s principal place of business is in St. Paul .... The relation between position and enforcement tax indicated attempt to exert control over interstate commerce for reasons purposes not sanc- tioned the Commerce Clause. In the Bowman taxpayer case the foreign corporation. was Cooney In fact is recited In Sprout, however, taxpayer resident, was a and it appear would that South Bend place was his of business. The rests, as is true of all field, decisions in this pre- on the cise surrounding facts challenged scope, tax —its its relation to the taxing scheme City, of State or amount, practical consequences, and other relevant factors.

580 existing between relation Minnesota —a and

Northwest which benefits the Northwest —and State no other for foundation constitutional are the affords relation this asserted.” has Minnesota which power taxing the in the opinions concurring two the And 294. at S.,U. we result the with harmonize Airlines Northwest favored theory port” “home Indeed, the here. reach a fleet fits at S., Jackson, U. Justice Mr. airliners. fleet a it does as well as least at trucks re- is that this case fact and decisive The central transportation any as much has, as business spondent’s To Chicago. home That home. a have, can business confined respondent’s that extent the City. around it revolves limits, City’s within transportation sea rail for terminals is fed It con- more much receives, It City provides. Airlines Northwest in the the airline did tinuously than City’s protec- case, the the Miller railroad or the In services. City’s public it benefits tion, and such proportions tax of reasonable circumstances, a be burden in fact to not shown question, one in Com- with not inconsistent commerce, interstate Clause. merce is re- Court judgment

The pro- Court that remanded the cause versed opinion. this with inconsistent ceedings ordered.

It is so Chief Reed, whom with Mr. Justice judgment. in the concurring joins, In the Court. reached the conclusion with agree I Commission, v. Tax Co. Telegraph Telephone & “No decision held 403, it was 297 U. S. occupation an proposition support lends upon local business, valid, otherwise must be held void merely because the local and interstate branches are for some inseparable.” reason Page 415. Cf.

South 277 U. S. 163, 171; Pullman Adams, Co. v. 189 U. S. 420.

The Chicago “carters tax” is strictly occupational tax for carrying goods within the City. City Chicago v. Willett Co., 406 Ill. 286, 290, N. E. 2d 195, 198. I do not think that New York Central Miller, R. Co. v. 202 S. 584, U. is a precedent to uphold such a tax this on ground that the taxpayer is a corporation of the tax ing state and doing business in Chicago. The in tax Miller case was measured the capital employed in the state. All railroad cars of taxpayer except those out side the state “during the whole tax year” were included in the measure. 595. Page The validity to so tax turned on the railroad’s failure to show, by some form appor tionment, in taxability other states. Page 597. I find in nothing the conclusion judgment of the in Court Northwest Airlines v. Minnesota, 322 S. 292, U. would make the Miller applicable to this situation, if even the “conclusion” opinion were an of this If I understand the Court’s present opinion correctly, de cides that this occupation tax is valid merely because the taxpayer is an Illinois corporation with its business home in Chicago, the taxing body. The facts that it an Illi corporation nois and that its trucks are out of sometimes the state are not controlling. The corporation is taxable because it does intrastate business on the streets of Chicago.

Whether the tax is expressly declared be for the use of the highways or for other state protection services or rendered interstate business is immaterial. This is a charge obviously for the use of the highways of by the carters and therefore valid. Union See Broker-

582 Southern 211-212; 202, U. S. Jensen, v.

age Co. Caskey 153; 148, U. S. Alabama, v. Corp. Gas 119. 117, S. 313 U. Virginia, v. Baking Co. dissenting. Douglas, Mr. in exclusively engaged one trucks, two had

If a carrier exclusively engaged other commerce intrastate consti- not could tax I think commerce, in interstate Sprout tax Like the latter. be levied tutionally designed it is 170, S. Bend, U. v. South high- the use value cost measure a “as said, it theAs ways.” 195, 198. 2dE.N. 290, 94 Ill. tax. occupational en- privilege for the exacted not be It therefore South v. commerce. in interstate gaging O’Connor, 340 Motor Service Spector 171; p. supra, 602. S.U. dif- nois present incidence does Respondent truck. per flat fee It is

ferent. nor business; interstate intrastate segregate continue respondent nor so; do it to for possible is 291- 286, Ill. segregation. awere if there in business makes often truck One 198-199. 2dE. 293, 94 N. interstate deliveries. interstate intrastate both operated of trucks number increasing the business, by tax. amount increases therefore respondent, an unconstitutional establish enough to me is That therefore This commerce. interstate burden Comm’n, 297 Tax Tel. Co. not controlled in- did interstate 414, where U. S. tax. amount crease whether great is as on commerce The burden of its state by the imposed carrier interstate on the implicit That state. another incorporation it seems supra, v. South scheme. to the constitutional is faithful me

Case Details

Case Name: City of Chicago v. Willett Co.

Court Name: Supreme Court of the United States

Date Published: Feb 9, 1953

Citation: 344 U.S. 574

Docket Number: 23

Court Abbreviation: SCOTUS