Railway Express Agency v. Virginia (358 U.S. 434)/Concurrence Brennan

Mr. Justice BRENNAN, concurring.

While I join the opinion and judgment of the Court, I must admit to some reservations whether the tax at bar can fairly be thought of as a property tax. The discussion of the Court in this case's predecessor, Railway Express Agency, Inc., v. Commonwealth of Virginia, 347 U.S. 359, 364-367, 74 S.Ct. 558, 561-563, 98 L.Ed. 337, cast serious doubt on the propriety of viewing Virginia's former tax as a property tax, and I share that doubt. The only modification in the mathematical demonstration of the prior decision necessitated by the revision of the tax statute is brought about by the new statute's provision that the tax is in lieu of other taxes on the appellant's intangible property and rolling stock. In practical effect, this means that payment of this $139,739.66 tax is 'in lieu' of a 1/5% tax on $120,110.70 of cash, amounting to $240.22; a tax, amounting to $427.56, on the value, apportioned to the State, of the appellant's refrigerator cars; and a 2 1/2% tax on its trucks, valued at $262,719, amounting to $6,567.98. These taxes, in lieu of which the $139,739.66 tax at bar is payable, aggregate $7,235.76. It seems to me doubtful whether this makes a significant alteration in the demonstration the Court made on the prior appeal with respect to the status as a property tax of the gross receipts tax on express companies. While the tax may be a rough equivalent of some sort of property tax that Virginia might conceivably levy on express companies, I do not see that it has been made clear that it bears any equivalence to any sort of property tax that she in fact levies on other sorts of businesses or has in fact previously levied on express companies. Cf. Pullman Co. v. Richardson, 261 U.S. 330, 339, 43 S.Ct. 366, 368, 67 L.Ed. 682. On the other hand, I cannot deny that this Court has, in decisions cited by the Court's opinion, frequently admitted gross receipts taxes to the characterization of 'property taxes' in situations where their equivalence with any actual property tax was somewhat tenuous. See, e.g., Illinois Central R. Co. v. State of Minnesota, 309 U.S. 157, 60 S.Ct. 419, 84 L.Ed. 670.

To me, the more realistic way of viewing the tax and evaluating its constitutional validity is to take it as what it is in substance, a levy on gross receipts fairly apportionable to the taxing State. Virginia has a comprehensive scheme of state income and gross receipts taxes on business corporations, with net income taxes the standard in the case of ordinary businesses and gross receipts taxes in the case of most categories of utility or 'public service' corporations. The gross receipts taxing structure does not single out this interstate transportation company, or discriminate against it, but rather requires it only to pay its share, at a tax rate comparable to the rates on the gross receipts of other categories of public service corporations, and in fact lower than those an many important ones. To restrict the gross receipts subject to the tax to an amount representing that part of appellant's interstate movements which takes place within the State, the State has employed an apportionment formula. That formula is not on its face unfair or discriminatory toward interstate commerce or indicative of an imposition on out-of-state activities, and the opinion of the Court amply demonstrates that this appellant cannot maintain a challenge to the details of its application here. The label of the tax as a 'privilege' or 'license' tax, proscribed by this case's predecessor, has been eliminated, as the Court's opinion shows. This Court's decisions sustain the application of a fairly apportioned general gross receipts tax to an interstate transportation company. Canton R. Co. v. Rogan, 340 U.S. 511, 515-516, 71 S.Ct. 447, 449, 95 L.Ed. 488; Central Greyhound Lines, Inc., of New York v. Mealey, 334 U.S. 653, 663-664, 68 S.Ct. 1260, 1266-1267, 92 L.Ed. 1633. Cf. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 256, 58 S.Ct. 546, 549, 82 L.Ed. 823. In my view, the most compelling reason for affirming the judgment of the Supreme Court of Appeals of Virginia is the application of the principles of these cases here.

Mr. Justice WHITTAKER, with whom Mr. Justice STEWART joins, dissenting.