Railway Express Agency, Inc. v. Virginia

PETITIONER: Railway Express Agency, Inc.
LOCATION: United States Senate

DECIDED BY: Warren Court (1958-1962)

CITATION: 358 US 434 (1959)
ARGUED: Oct 15, 1958
DECIDED: Feb 24, 1959

Facts of the case


Media for Railway Express Agency, Inc. v. Virginia

Audio Transcription for Oral Argument - October 15, 1958 (Part 1) in Railway Express Agency, Inc. v. Virginia

Audio Transcription for Oral Argument - October 15, 1958 (Part 2) in Railway Express Agency, Inc. v. Virginia

Earl Warren:

Mr. Gray, you may proceed.

Frederick T. Gray:

Thank you, sir.

As we pause for recess, if Your Honors please, I was concluding my remark with respect to the three additional changes in the statute which we say were made and which appellants have failed to recognize as being changes in the statute.

It's been pointed out that the mileage formula which was formerly in the statute, the apportionment formula is not in this statute and that the appellant, in making its return, did not attempt to assert any value for gross receipts in Virginia at all but rather answer that it had no gross receipts in Virginia.

And the Commission had to apply the section of the law which provides that where a -- a taxpayer fails or refuses to report, they shall make the return on the best information available.

And in so doing, the Commission has reached a mileage formula to determine what gross receipts are.

Now, it seems to us, a rather strange concept that a taxpayer can thus fail to report, and then come into court and complain that I didn't know what my gross receipts were, and I didn't report any gross receipts but the method you use is wrong.

Either they did know or didn't know.

The position they take is we don't know what our receipts were but we do know that what you say our receipts were -- were not our receipts in Virginia.

Could I ask you a question at this point?

Frederick T. Gray:


Assuming we were to conclude that this was not a property tax, do you so say the tax is all right?

Frederick T. Gray:

If it were not a property tax.

If Your Honor please, if this is not a property tax, the only basis on which I say that the tax could be sustained would be that by virtue of the use of its property, the Delaware company's property by the Virginia company that that would be a sufficient basis for tax.

That is the only other basis on which it could be sustained.


Frederick T. Gray:

I believe substantially that Mr. Gay, when he stated that the noble of this case is whether a gross receipts tax can be used to measure property taxes in lieu of which the gross receipt tax is levied, that is the part of this matter.

And if -- if the decisions of the Court are such that no gross receipts tax, no matter how fairly apportioned or no matter what property it stands in lieu of, if gross receipts as such can never be used as a measure of a property tax, then I think I have very rough pleading from therein.

Do you --

Frederick T. Gray:

We do not believe that the cases of this Court are to that effect.

Charles E. Whittaker:

Even if it could be, you still have to point, is it not, Mr. Gray, in some property is subject --

Frederick T. Gray:


Charles E. Whittaker:

-- to the tax.

Frederick T. Gray:

That would go to amount.

Charles E. Whittaker:

Well, there'd be no amount involved if the record affirmatively showed there was no property.

Frederick T. Gray:

Oh, that's correct.

But I think the answer -- in answer to -- to the question that if -- if the decisions of this Court are that you can never have a gross receipts tax, if -- if the fact that it's gross receipts denotes it as a privilege tax, then I don't get to amount.

I'll stop it below.

I say, in connection with that, now, I would like to get in to what I conceived to be the nature of this tax and why I conceived it would be nature.

The Court will remember that under the prior tax, there was a decided -- a divided opinion of the Court.