James Clark McReynolds

“ A state may not tax property belonging to a foreign corporation which has never come within its borders-to do so under any formula would violate the due process clause of the Fourteenth Amendment. In so far, however, as movables are regularly and habitually used and employed therein, they may be taxed by the state according to their fair value along with other property subject to its jurisdiction, although devoted to interstate commerce. ”

“ After giving the mileage for the company everywhere and for Georgia, you then go ahead and assign 57 tank cars for this state and value them at $830 each, making the total for Georgia $47,310. This is an incorrect method. If you were to be allowed to merely assign so many cars to the state for taxation there would be no need for the mileage figures to be furnished. The valuation to be assigned to Georgia must be in the same proportion to the valuation for the entire company as the mileage in Georgia bears to the entire mileage everywhere. ”

“ Defendant in error expressly admitted that the average number of cars in Georgia during 1913 was 57, the value of each being $830-total $47,310; that the owner had paid into the state treasury as taxes the full amount required on such valuation and during that year had no other property in the state. Acting upon information contained in return above quoted, the comptroller general assessed the Tank Line's property for 1913 at $291,196, its franchise at $27,685, and demanded payment. ”

“ Union Tank Line-plaintiff in error-an equipment company incorporated in New Jersey which has never carried on business or had an office in Georgia, owns 12,000 tank cars suitable for transporting oil over railroads and rents them to shippers at agreed rates, based on size and capacity. The roads over which they move also pay therefor stipulated compensation. Under definite contract certain of these cars were furnished to the Standard Oil Company of Kentucky and all of those which came into Georgia were being operated by the Oil Company under such agreement. ”

“ All cars actually owned by the company (leased ones not included) during 1871 numbered 241, and in 1880, 472, their total value being $4,334,000 and $8,588,000 respectively; 100 cars were operated within Pennsylvania during each of the 11 years; total miles of track everywhere passed over by the company cars during 1880 amounted to 57,099; within Pennsylvania, 5,127; and these figures adequately represent the proportion for other years; total tax held due for the 11 years amounted to $16,321.89. ”

“ Argued: and Submitted Jan. 22, 1919. --- Decided: March 24, 1919
This cause requires us to consider the power of a state to lay and collect taxes upon instrumentalities of interstate commerce which move both within and without its jurisdiction. ”

“ The comptroller general followed the statute. The unit rule has been upheld by the Supreme Court of the United States, in regard to railroads, telegraph companies, and sleeping car companies. Kentucky Railroad Tax Cases, 115 U. S. 321, 6 Sup. Ct. 57, 29 L. Ed. 414; Western Union Telegraph Company v. Massachusetts, 125 U.S. 530, 8 Sup. Ct. 961, 31 L. Ed. 790; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. 876, 35 L. Ed. 613. And this principle of average has been approved in regard to refrigerator cars. American Refrigerator Transit Co. ”