RESPONDENT: Washington State Department of Revenue
LOCATION: Bentonville, Arkansas
DOCKET NO.: 85-1963
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: Washington Supreme Court
CITATION: 483 US 232 (1987)
ARGUED: Mar 02, 1987
DECIDED: Jun 23, 1987
D. Michael Young - on behalf of Appellants in No. 85-2006
Neil J. O'Brien - on behalf of Appellant in No. 85-1963
William B. Collins - on behalf of Appellants
Facts of the case
Media for Tyler Pipe Industries, Inc. v. Washington State Department of Revenue
Audio Transcription for Oral Argument - March 02, 1987 in Tyler Pipe Industries, Inc. v. Washington State Department of Revenue
William H. Rehnquist:
You may proceed whenever you're ready, Mr. Young.
D. Michael Young:
Mr. Chief Justice and may it please the Court:
These appeals come to the Court from two decisions of the State Supreme Court of Washington.
They involve 72 Appellants, all of whom have paid certain taxes to the state of Washington and are trying to get them back because they believe that the Washington tax statutes are unconstitutional.
71 of the taxpayers were consolidated in the state courts in a case styled National Can Corporation.
These 71 Appellants challenge the Washington taxes as violating the commerce clause on two independent bases: one, that they discriminate against interstate commerce; and two, that they're not fairly apportioned.
Either one of these defects would be a sufficient basis to invalidate the taxes.
I'll address the discrimination problem, and if by any chance my limited time permits I'll also touch on the apportionment problem.
Having granted divided argument, Tyler's counsel will address the issues that are peculiar to that case, which include two commerce clause issues similar to those raised by the National Can Appellants and several other issues that aren't involved in the National Can appeal at all.
The guts or perhaps I should say heart of this case are the taxpayers' activities, the way the Washington taxes are imposed on those activities, and the constitutional problems that they create.
A very graphic picture of the hard facts are provided in the chart that was prepared by the state of Washington, the Appellee here.
And to make the most efficient use of the limited time, I'm going to ask the Court's indulgence in referring with me to the chart that the state prepared.
You'll find it in the jurisdictional statement submitted by National Can Corporation, and in particular it's appendix K to the jurisdictional statement.
So that's on the very last page of the National Can jurisdictional statement, appendix K.
Now, I want to emphasize, this was prepared by the state and not by us.
It was prepared in a context very much like the one that we're in here.
As you may know, the state participated as an amicus in the Armco versus Hardesty case that was before the Court a couple of years ago.
The state of Washington was trying to help the state of West Virginia defend its taxes, much like these here, against a challenge of unconstitutionality.
But this Court held, after listening to the arguments that the states raised, that the West Virginia taxes were unconstitutional.
And so then the Department of Revenue of Washington had the task of coming back and explaining to the executives of the state and the legislature of the state why this Court reached that conclusion with respect to West Virginia's taxes and why Washington's taxes had the same kinds of problems.
Now, the state in this chart put itself, put the state of Washington, at the top in the large rectangle at the top, and it put the state of West Virginia at the bottom.
I would like to start in the other order because I think it makes sense to start with your decision in the Armco case.
Okay, how does it depict the taxpayers here?
All of the taxpayers in National Can's appeal, like Armco, are manufacturers.
They're producing something.
Almost all of them are manufacturing, a few of them are doing some extracting.
The second thing is that they, like Armco, are selling across state lines.
Now, in each case we're talking about a manufacturer selling.
In this chart the state has chosen to illustrate each activity by one of these small boxes.
So you can see Armco down at the very bottom of the West Virginia chart, manufacturing and wholesaling.