DOCKET NO.: 115
DECIDED BY: Warren Court (1962-1965)
CITATION: 377 US 436 (1964)
ARGUED: Feb 26, 1964
DECIDED: Jun 08, 1964
Facts of the case
Media for General Motors Corporation v. WashingtonAudio Transcription for Oral Argument - February 26, 1964 (Part 2) in General Motors Corporation v. Washington
Audio Transcription for Oral Argument - February 26, 1964 (Part 1) in General Motors Corporation v. Washington
Number 115, General Motors Corporation, Appellant, versus Washington, et al.
Mr. Barnes, you may proceed with your argument now.
Donald K. Barnes:
Mr. Chief Justice and may it please the Court.
This appeal challenges the constitutionality of unapportioned gross receipts tax assessment made by the State of Washington against General Motors Corporation with respect to exclusively interstate commerce, and it challenges that assessment on two grounds, interstate commerce and due process and two points under each.
Rather startling new law would be created by affirmance of this decision, the statute under which the assessments were made have been in effect for 20 years and have been as it's going on for longer than that before this issue was raised and there's no precedent for it anywhere.
Reversal however, requires only the application of familiar principles denied particularly extraordinary facts.
Well, the prior decisions of this Court in state tax matters indicate that there are two things that need to be kept in mind carefully, now I want to mention those before I go into the details of the facts.
The first is the nature of the tax that makes a lot of difference as we look at each precedent and each set of facts, and second, as to the facts not only what was done but where it was done.
This tax is one which is imposed specifically by the statute and directed to be a burden upon the vendor for the privilege of engaging in the business of making sales at wholesale and measured by unapportioned gross receipts derived or related to those sales.
Now, the circumstances to which a tax of that nature can constitutionally be applied are considerably narrower than the circumstances which will support any apportioned tax including, best example, and that income tax even though that's paid by the vendor also, or a consumption tax, the sales or use tax which is paid by the vendee.
Now, the facts here are that, although constitutionally from constitutional point of view very simple, they're quite detailed.
General Motors Corporation is a Delaware Corporation that's qualified to do business in Washington.
Its business is manufacturing primarily automobiles and parts and accessories therefore and some of the -- those products are involved in this suit.
There are many other products which are not involved here.
The selling which the Corporation does is incidental to and a part of its manufacturing activity.
We are not, in other words, a merchant.
The Corporation is organized into divisions and conducts its business through divisions which is still not separately incorporated are substantially independent of each other and in fact to a considerable degree in competition with each other.
This appeal involves transactions of only at Chevrolet, Oldsmobile, Pontiac, and General Motors Parts Divisions.
The first three manufacturing automobiles by that name, Chevrolet also trucks and General Motors Parts supplying parts and accessories for service requirements of dealers in the aftermarket.
You will recognize that Chevrolet and Pontiac for example are in competition with each other.
Now, in the State of Washington, there are no manufacturing facilities for any part of the corporation.
There are, however, offices of some of the other divisions which are not involved in this suit.
They either are concerned with other products or they're concerned with entirely different activities such as financing.
The tax on all of the transactions that are related in any way to those offices, has been paid without dispute and is not here involved in any way.
There is in the State, no office of any kind having any relation to any of the tax receipts in the first of two classes of transactions.
In the second class, there is a small branch which will be mentioned in a minute.
Now, the transactions which are here in -- in dispute, all concerned products which are manufactured entirely outside of the State, sold entirely outside of the State, delivered outside of the State to common carriers, paid for outside of the State, and shipped into the State.
They're all sales at wholesale to independent dealers.
Now, the sales organization, since we are talking about a tax on the business of selling is of immediate concern, and it's the same for each of these three principal divisions, although each is independent of the other, each has a national headquarters in Michigan.
Each has a -- a regional West Coast Office in California.