West Point Wholesale Grocery Company v. City of Opelika/Opinion of the Court

This is a suit to recover taxes paid by the appellant to the City of Opelika, Alabama, on the ground that the taxes in question imposed a discriminatory burden on interstate commerce. The state court sustained a demurrer to the complaint, 38 Ala.App. 444, 87 So.2d 661, rejecting the appellant's federal contention, and we noted probable jurisdiction. 352 U.S. 924, 77 S.Ct. 225, 1 L.Ed.2d 159.

Section 130(a), of Ordinance No. 101-53 of the City of Opelika, as amended by Ordinance No. 103-53, provides that an annual privilege tax of $250 must be paid by any firm engaged in the wholesale grocery business which delivers, at wholesale, groceries in the City from points without the city. Appellant is a Georgia corporation engaged in the wholesale grocery business in West Point, Georgia. It solicits business in the City of Opelika through salesmen; orders are transmitted to appellant's place of business in Georgia, where they are accepted and the groceries thereupon loaded on trucks and delivered to the City. Appellant has no place of business, office, or inventory in Opelika, its only contact with that City being the solicitation of orders and the delivery of goods.

We held in Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 96 L.Ed. 760, and in Memphis Steam Laundry Cleaner, Inc. v. Stone, 342 U.S. 389, 72 S.Ct. 424, 96 L.Ed. 436, that a municipality may not impose a flat-sum privilege tax on an interstate enterprise whose only contact with the municipality is the solicitation of orders and the subsequent delivery of goods at the end of an uninterrupted movement in interstate commerce, such a tax having a substantial exclusory effect on interstate commerce. In our opinion the tax here in question falls squarely within the ban of those cases. This is particularly so in that Opelika places no comparable flat-sum tax on local merchants. Wholesale grocers whose deliveries originate in Opelika, instead of paying $250 annually, are taxed a sum graduated according to their gross receipts. Such an Opelika wholesaler would have to gross the sum of $280,000 in sales in one year before his tax would reach the flat $250 amount imposed on all foreign grocers before they may set foot in the City. The Commerce Clause forbids any such discrimination against the free flow of trade over state boundaries.

Since the present tax cannot constitutionally be applied to the appellant, the judgment must be reversed and the case remanded for proceedings not inconsistent with this opinion.

Reversed.

Mr. Justice BLACK dissents.