§ 8112. Taxation of Goods in Transit through the State. In like manner, goods in transit through the State from a place outside of it to another place outside of it, are not taxable by the State, even though detained within its boundaries by low water or other temporary causes. Nor are the gross receipts of a railway or other transportation company, derived from the transportation of goods thus detained, taxable by the State. But where property which is merely destined for transportation into another State, is detained by temporary causes in the State of its production while awaiting such transportation, it remains a part of the general mass of the property of the State, which is liable to taxation in the usual way in which other such property is taxed within the State. Thus, logs, cut at a place in New Hampshire, and hauled to a town on the Androscoggin river in that State, to be transported from thence down the river to Lewiston, in the State of Maine, while waiting within the limits of New Hampshire for a rise of water in the river sufficient to float them, were liable to taxation in the same way as other such property within the State.' § 8113. Immaterial how the Tax is Laid. The transportation of property is commerce, and a tax upon such property in its transit from State to State is a regulation of commerce between the States, within the meaning of the commerce clause of the Federal constitution, such as cannot be constitu 1 Coe v. Errol, 116 U. S. 517; State &c. Coal Co. v. Carrigan, 39 N. J. L. 35. Delaware &c. Canal Co. v. Com. (Pa.), 17 Atl. Rep. 175. In the application of these principles it has been held that a foreign corporation, whose business is the mining of coal in Pennsylvania, which coal is sent by railroad across the State of New Jersey to tide water for shipment, the office of the foreign corporation for receiving orders for coal and transacting its business being in New York City, -is not taxable in respect of coal lying on its dock in the State of New Jersey, where it is delayed awaiting shipment to other States, nor of its coal shipped direct from its mines and delivered in the State of New Jersey, in railway cars, to local dealers on orders transmitted from its office in New York City. State &c. Coal Co. v. Carrigan, 39 N. J. L. 35; State v. Engle, 34 N. J. L. 425. Coe v. Errol, 116 U. S. 517. • Ante, § 5562. tionally imposed by State authority.' The mode in which the tax is imposed, whether it be directly on the property in the hands of the owner, or upon the carrier as a tax on his business, is immaterial. If, for instance, as already seen, a tax directly laid upon the property in its transit across the taxing State from one State to another, is unconstitutional, then it is equally clear that a tax laid upon the carrier for transporting such property is unconstitutional, because of a substantial identity in the results. For, although such a tax is in form a tax on the business of the transportation company, it is in substance a tax on the commodities, the transportation of which constitutes the business, especially in view of the fact that the carrier must, in order to sustain his business, recoup himself to the extent of the tax by charging an increased rate for the transportation of the goods. It was upon this ground that a State law requiring an importer to take out and pay for a license, as a prerequisite to a right to sell imported goods, was held to be in conflict with the commerce clause of the Constitution of the United States; and that a stamp duty upon bills of lading for gold and silver transported to any port or place out of the State, was unconstitutional, as a tax on exports.' - § 8114. When Interstate Transit Commences so as to Exempt the Property from State Taxation. So long as the property remains a part of the common mass of property within the State, it is taxable by the State, wholly without reference to the question whether its owner is a resident or non-resident person or corporation. But when it is separated from that general mass and started upon its final transit out of the State, 1 Case of State Freight Tax, 15 Wall. (U. S.) 232; Erie R. Co. v. Pennsylvania, 15 Wall. (U.S.) 282; Erie R. Co. v. State, 31 N. J. L. 531; 8. c. 86 Am. Dec. 226; State &c. Coal Co. v. Carrigan, 39 N. J. L. 35, 37. State &c. Coal Co. v. Carrigan, 39 N. J. L. 35, 37; Erie R. Co. v. State, 31 N. J. L. 531; s. c. 86 Am. Dec. 226. Ante, § 8112. Erie R. Co. v. State, 31 N. J. L. 531; s. c. 86 Am. Dec. 226. • Ibid. Brown v. Maryland, 12 Wheat. (U. S.) 419. Almy v. California, 24 How. (U. S.) 169. it ceases to be so taxable; for a tax then laid upon it would be a regulation of commerce between the States within the meaning of the commerce clause of the Federal constitution. In respect of the point of time when this transit, and with it this exemption from taxation, begins, it has been said, in relation to the products of a State intended for transportation to another State, that such goods do not cease to be a part of the general mass of property in the State, and subject to its taxation in the usual way, until they have been shipped, or entered with a common carrier for shipment, to another State, or country, or have been started upon such transportation in a continuous route or journey. The mere fact that goods are intended for transportation out of the State is not sufficient; for "if such were the rule, in many States there would be nothing but the lands and real estate to bear the taxes. Some of the Western States produce very little except wheat and corn, most of which is intended for export; and so of cotton in the Southern States. Certainly, as long as these products are on the lands which produce them, they are part of the general property of the State." Nor does an interstate transit, and with it an exemption from taxation, commence, until the goods have entered upon their final journey to a place outside of the State. It is true that it was said in one case that "whenever a commodity has begun to move as an article of trade from one State to another, commerce in that commodity between the States has. commenced." But in a later decision this statement was qualified by saying that "this movement does not begin until the articles have been shipped or started for transportation from the one State to the other. The carrying of them in carts or other vehicles, or even floating them, to the depot where the journey is to commence, is not part of that journey. That is all preliminary work, performed for the purpose of putting the property in a state of preparation and readiness for transportation. Until actually launched on its way to 1 Coe v. Errol, 116 U. S. 517, 527. 557, The Daniel Ball, 10 Wall. (U. S.) 565. another State, or committed to a common carrier for transportation to such State, its destination is not fixed and certain. It may be sold or otherwise disposed of within the State, and never put in course of transportation out of the State. Carrying it from the farm, or the forest, to the depot, is only an interior movement of the property, entirely within the State, for the purpose, it is true, but only for the purpose, of putting it into a course of exportation; it is no part of the exportation itself. Until shipped or started on its final journey out of the State, its exportation is a matter altogether in fieri, and not at all a fixed and certain thing."1 § 8115. Taxing Sales Made within the State by Non-resident Corporations. It is competent for a State to lay a uniform tax upon all sales of goods made within its limits, whether by its own citizens or corporations, or by persons or corporations of other States, and whether the goods sold are the products of the domestic State or of some other State; since the prohibition of the Federal constitution that "no State shall levy any imposts or duties on imports or exports," does not refer to articles imported from one State into another, but only to goods imported from foreign countries into the United States. So, it has been held that coal mined in Pennsylvania, and sent by water to New Orleans, in Louisiana, there to be sold in open market, for account of the owners in Pennsylvania, becomes, in theory of law, intermingled, on its arrival there, with the general mass of property subject to taxation in the State of Louisiana under its laws, although it may be, after its arrival, sold from the vessel in which it was transported thither, and without being landed, and for the purpose of being taken out of the country on a vessel bound for a foreign port. But a statute prohibiting, under a penal sanction, any person from dealing as a peddler without a license, and defining such person to be one dealing in goods or wares "not the growth, produce, or manufacture of this State, Coe v. Errol, 116 U. S. 517, 528. Woodruff v. Parham, 8 Wall. (U. S.) 123. Compare Brown v. Houston, 114 U. S. 622, where this decision is "affirmed and applied." Brown v. Houston, 114 U. S. 622. by going from place to place to sell the same," — intended obviously to exclude drummers and commercial travelers from other States, was held unconstitutional as an attempt to regulate interstate commerce.1 § 8116. Taxation of Gross Receipts.-A favorite mode of taxation, resorted to by State legislatures dominated by the agricultural influence, has been to lay taxes upon merchants and common carriers, in the form of requiring them to pay as taxes a certain percentage of their gross receipts. In some cases these taxes have been imposed in the form of license taxes, and the payment of such a tax for a stated period has been made a condition precedent to a renewal of the license, without which the merchant was prohibited from carrying on his business. This form of taxation is subject to the same objections, on the grounds of expediency and policy, as the taxation of incomes. The methods of collection are necessarily inquisitorial. They require the merchant to lay bare the volume and extent of his business to the inspection. of his competitors and his creditors, and often in either case to his detriment. This fact, however, does not constitute a valid constitutional objection to this mode of taxation unless there is a constitutional prohibition restraining the subjects of taxation to property, real and personal. Such a tax is in no sense a tax upon property, but it is, in substance and effect, a tax upon the operations of trade, the effect of which is that whenever a merchant sells a piece of goods, he must divide the money which he receives from his customer, between himself and the State. It is therefore a tax upon the very fact of selling, and upon the very operation and amount of trade itself. It follows, on a principle of undeniable logic, that whenever such a tax is laid upon the gross receipts of an interstate carrier, it is a tax upon interstate commerce itself, and, as such, is unconstitutional under the interpretation of the interstate commerce clause of the Federal constitution already referred to." 1 Welton v. Missouri, 91 U. S. 275, 282; reversing s. c. State v. Welton, 55 Mo. 288. 2 Post, § 8118. |