Northwestern States Portland Cement Company v. Minnesota

PETITIONER: Northwestern States Portland Cement Company
LOCATION: S.S. Guadalupe

DECIDED BY: Warren Court (1958-1962)

CITATION: 358 US 450 (1959)
ARGUED: Oct 14, 1958 / Oct 15, 1958
DECIDED: Feb 24, 1959

Facts of the case


Media for Northwestern States Portland Cement Company v. Minnesota

Audio Transcription for Oral Argument - October 15, 1958 in Northwestern States Portland Cement Company v. Minnesota

Audio Transcription for Oral Argument - October 14, 1958 in Northwestern States Portland Cement Company v. Minnesota

Earl Warren:

Number 33, T.V Williams, State Revenue Commissioner, Petitioner versus Stockham Valves and Fittings Incorporated.

Mr. Johnson you may proceed?

Ben F. Johnson:

May it please the Court.

I think it might help to start here with the nature of the Georgia tax.

The Georgia tax is a -- the Georgia Income Tax Act of 1931 as amended and the Georgia statute says that the taxes, the tax on net income, I'd like to read you the precise language of the statute if I may.

The first section is the tax on individuals.

A tax is hereby, now this is in the appendix of our brief page 57, a tax on individuals, a tax is hereby imposed upon every resident in this state.

The tax can levied and collected and paid annually with respect to the entire net income of the taxpayer's (Inaudible) at the time and upon having been non-resident with respect to his entire income, not here exempted, received by such taxpayer, from a proxy owned or from business cared on in this state can use its foreign rates.

Now then the next section of that statute, which is set forth over on page three, because it's more relevant to the question here than that, Section 92 3102 says every domestic corporation and every foreign corporation, shall pay annually an income tax, (Inaudible) to five and one-half percent --

Felix Frankfurter:

I'm sorry Mr. Attorney General, what page did you read?

Ben F. Johnson:

I'm reading now, I've just read about individuals.

Felix Frankfurter:

Yes I read that --

Ben F. Johnson:

Page 57 back, and now I'm back on page three --

Felix Frankfurter:

I beg your pardon, thank you.

Ben F. Johnson:

-- dealing with the constitutional provision in the statute immediately involved, so that every domestic corporation and every foreign corporation shall pay annually an income tax equivalent to five and one-half percent of the net income from property owned or from business done in Georgia as defined in Section 92-3113.

Now I simply observe at this point, that we tax income of residents and non-residents, if it's received, derived from property owned or business done in Georgia, and we tax domestic corporations and we tax foreign corporations, on the income which is derived from property owned or business done in Georgia.

Felix Frankfurter:

Now whatever one may think about the Minnesota case that turns on the other statute as different in that Section 2 is just discussed.

Ben F. Johnson:

Clear and right to point, yes.

William O. Douglas:

Well what is -- do you have a formula for apportioning?

Ben F. Johnson:

Yes, and that's contained, I'm getting to that Your Honor.

Now then --

Charles E. Whittaker:

Well, may I ask you General, is the word is used always (Inaudible) and its stock, resident then in Georgia, how the same tax with respect to local business as to (Inaudible)

Ben F. Johnson:

I think we've got to see this, and that is that, we may have a corporation that is in engaged in exclusively interstate commerce and yet nevertheless, some of its activities have taken place locally within Georgia, that is territorial within Georgia.

Charles E. Whittaker:

That's not --

Ben F. Johnson:

Now that is -- that's not local business in the sense of your franchise tax, but that is local activity, which maybe receiving benefits and protections and opportunities from the laws of Georgia and from the Government of Georgia and the economy of Georgia, which developed.

Charles E. Whittaker:

But your own Supreme Court dealt it was not business (Inaudible), did it not?

Ben F. Johnson:

No sir, I don't think so.

Felix Frankfurter:

Before you get to that question, if I may, Mr. Attorney General, since the phrase is from business done in Georgia, what the scope of that is with due regard to the Commerce Clause is a question of each particular case, is that right?

In other words, there is no such trade exclusivity in interstate commerce or so on or domestic.

There is a generalized trade, business done in Georgia and whether for taxing purposes or other Georgia legislative purposes, it is "Business done in Georgia", involved with instruction not only of your local law, but of the limitations of your local law through the Commerce Clause, am I right about that?