Department of Revenue v. James B. Beam Distilling Company

PETITIONER: Department of Revenue
RESPONDENT: James B. Beam Distilling Company
LOCATION: Alabama State Capitol

DECIDED BY: Warren Court (1962-1965)

CITATION: 377 US 341 (1964)
ARGUED: Mar 23, 1964
DECIDED: Jun 01, 1964

Facts of the case


Media for Department of Revenue v. James B. Beam Distilling Company

Audio Transcription for Oral Argument - March 23, 1964 in Department of Revenue v. James B. Beam Distilling Company

Earl Warren:

Number 389, Department of Revenue versus James B. Beam Distilling Company.

William S. Riley:

Mr. Chief Justice.

Earl Warren:

Mr. Riley.

William S. Riley:

Mr. Chief Justice, may it please the Court.

The issue in our case is fairly simple.

Can the Commonwealth of Kentucky levy an occupational or a license control tax on the business of respondent that bid is being the bringing of Scotch whisky into the Commonwealth which is complementary to a like tax on the business of distilling or manufacturing whisky in the Commonwealth without violating the Import-Export Clause of the Federal Constitution.

Now, by regulation, this tax is made payable at the time the import permits are obtained from the Commonwealth.

But the statute provides that the tax could be paid as late as 15 days after the whisky had reached the respondent's bonded warehouse, his private bonded warehouse.

But as a matter of control, it's made payable at the time of entry.

As briefly the facts in this case are that the respondent had contracted with a Scotch distiller to purchase several thousand gallons of Scotch whisky in the original casks and some in bottles, already cased for the consumer market, shipped from the port of Glasgow, Scotland moved to ports of Chicago and New Orleans.

There it was unloaded in customs bond, placed on an approved bonded carrier and transported to Louisville, Kentucky.

From there, it was picked up by another approved bonded carrier and moved to the respondent's place of business in Clermont, Kentucky, his private bonded warehouse.

Now, some of this whisky was in about 185% proof, it's not drinkable until it's removed from the cask, distilled water is added, in other word, is cut.

Some of it of course was already bottled.

As early as 1890, in the Wilson Act in 1913 and in the Webb-Kenyon Act, Congress gave its consent to state regulation of liquor regardless of whether or not it was in the original package.

And this Court affirmed that grant of power in 1913, De Bary against Louisiana.

But be that as it may, we believe that the Twenty-first Amendment has treated this type of product of -- as a unique type of product and has reserved to the States the absolute control up to the point of prohibiting it.

And as Your Honors know in many States, there is local option which absolutely prohibits liquor in many counties and that's true in Kentucky.

The only thing that Kentucky is doing here is attempting to control the entry of this whisky into the State, as this Court permitted in Gordon against Texas.

In fact, the Gordon case is absolute on all force with what Kentucky is trying to do here.

There, the State of Texas was permitted to collect its import tax on several gallons of rum in an individual's car which he was carrying across the State of Texas into his home in North Carolina.

Earl Warren:

Was it in bond?

William S. Riley:

No, sir, it was not in bond but that the principle is the same, if Your Honor please.

The individual was arrested and required to pay a fine and pay the tax as a matter of control.

That's what Kentucky is trying to do here and of course, this Court affirmed the case per curiam, citing Carter against Virginia, where this Court permitted that very same thing to take place.

The State of Virginia to seize whisky moving across that State from a point outside of Virginia to a point in North Carolina because the bonding and moving requirements had not been met with and it cited, of course, the Carter case cites Ziffrin against Reeves which arose in the Commonwealth of Kentucky where Kentucky was permitted to seize whisky that was moving on routes in the State which had been approved by Kentucky's Alcoholic Beverage Control Board.

Earl Warren:

Did the liquor leaves the private bonding warehouse of the respondent?

William S. Riley:


Earl Warren:

Does it leave in bond also?

William S. Riley:

Well, it maybe withdrawn from bond and sold.