Norton Company v. Department of Revenue of Illinois/Dissent Reed

Mr. Justice REED, dissenting in part.

Mr. Justice REED concurs with the Court's opinion and judgment except as it permits Illinois to use as a base for the tax computation petitioner's sales, consummated in Massachusetts by the acceptance of orders forwarded to petitioner there by its Illinois branch office, filled in Massachusetts, and shipped from Massachusetts directly, and not by transhipment through the Illinois branch, to the buyer. In those sales title passes to buyer in Massachusetts. Illinois concedes in its brief the above facts as to this class of sales. From those facts I conclude that, nothing else appearing, the shipment was at the buyer's cost and risk.

The Illinois statute recognizes that interstate business is not to be taxed. The transactions described above are interstate business.

The pull to permit each state to measure its tax by gross receipts from all sales with some slight relation to the taxing state is strong. The Constitution, however, puts the regulation of interstate commerce in the hands of the Federal Government. We have gone far in interpretation of the Constitution to allow a state to collect tax money, but in view of the delegation to the Federal Government of the power over commerce carried on in more than one state, we should preserve interstate commerce itself from taxes levied on it directly or on the unapportioned gross receipts of that commerce. Central Greyhound Lines, Inc., v. Mealey, 334 U.S. 653, 68 S.Ct. 1260, 92 L.Ed. 1633; Joseph v. Carter & Weekes Stevedoring Co., 330 U.S. 422, 67 S.Ct. 815, 91 L.Ed. 993; Interstate Oil Pipe Line Co. v. Stone, dissent, 337 U.S. 662, 676, 69 S.Ct. 1264, 1271, 93 L.Ed. 1613.

Our closest approach to the tax on the above interstate business was the tax on DuGrenier, Inc., in McGoldrick v. Felt & Tarrant Mfg. Co., 309 U.S. 70, 77, 60 S.Ct. 404, 405, 84 L.Ed. 584. Despite marked differences between the DuGrenier transactions and all others considered in McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, without analysis of the effect of those differences and in reliance upon the fact that 'possession' was transferred to New York from the transportation company to the buyer, we upheld the tax. If by the language used it was meant to say that the seller delivered the goods to the buyer, the transactions were, as we said, 'controlled' by Berwind-White.

A few years later, however, in McLeod v. J. E. Dilworth Co., 322 U.S. 327, 64 S.Ct. 1023, 88 L.Ed. 1304, an opinion in which the writer of the DuGrenier opinion, Chief Justice Stone, joined, we made it clear that a tax cannot be collected by the buyer's state on orders solicited in one state, accepted in another, and shipped at the purchaser's risk. That later clarifying holding seems to me to state the true rule applicable here. I can see no difference, constitutionally, between solicitation by salesmen in a branch office or on the road. Such sales, consummated by direct shipment to Illinois buyers from out of the state are interstate business and free of the tax Illinois has levied. So far as the Supreme Court of Illinois holds those transactions taxable, it should be reversed.