Railway Express Agency v. Virginia (358 U.S. 434)/Dissent Whittaker

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

I cannot agree. Let me very briefly put the case in perspective, as I see it. Taxation of the property of appellant's Virginia subsidiary, which does an intrastate business in Virginia, is not at all involved here. The Court properly observes the fact that 'Appellant's Virginia business is * *  * of an exclusively interstate nature.' In the year involved it owned in Virginia tangible real and personal property which was taxed by Virginia under other statutes and is not involved in this case. Virginia also claims that appellant had intangible property in Virginia. It is upon those intangibles, so claimed to have been present in the State, that Virginia sought to lay its 'franchise tax,' said by it to be a 'property tax' measured by appellant's gross receipts, allocable to Virginia, from 'exclusively' interstate commerce. Admittedly appellant had a bank account and some 'rolling stock' in Virginia, upon which, doubtless, Virginia validly could lay an ad valorem tax. But the dispute is over the following. Virginia claims that appellant should be deemed to have had in Virginia, and subject to the taxing statute here involved, substantially that percentage of the value of its national 'good will,' and of its exclusive express carriage contract with the railroads, which the ratio of the mileage of carriers which it uses in interstate commerce in Virginia bears to the total mileage of the same carriers which it uses everywhere in such commerce. Appellant contends that Virginia's claim in these respects is unconstitutional. Which of them is right? I think it is appellant. I think so for two reasons. First, the exclusive carriage contract which appellant has with the railroads requires it, as the Court observes, to pay 'all of its net income' to the railroads. Therefore, as a matter of both fact and law, that contract can have no dollar value to appellant, distinguished from the railroads, to be taxed to it anywhere. Second, appellant's 'good will,' if any, does not consist of anything localized in Virginia, but inheres solely in its 'exclusively' interstate business-a business that Virginia cannot reach or regulate, by direct taxation or otherwise, because it is prohibited from doing so by the Commerce Clause of the Constitution, Art. I, § 8, cl. 3. My views on that subject are fully stated in my dissenting opinion in No. 12, Northwestern States Portland Cement Co. v. State of Minnesota, and No. 33, Williams v. Stockham Valves & Fittings, Inc., 358 U.S. 450, 79 S.Ct. 357. I would therefore reverse the judgment of the Supreme Court of Appeals of Virginia.