HENNEFORD V. SILAS MASON CO., INC., 300 U. S. 577 (1937)

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U.S. Supreme Court

Henneford v. Silas Mason Co., Inc., 300 U.S. 577 (1937)

Henneford v. Silas Mason Co., Inc.

No. 418

Argued December 14, 15, 1936

Reargued March 1, 2, 1937

Decided March 29, 1937

300 U.S. 577


1. When goods imported in interstate commerce have become part of the common mass of property within the destination, that State may subject them to a property tax, or to a tax upon their use. P. 300 U. S. 582.

The privilege of use is only one of the privileges that make up property or ownership. A State is at liberty to tax them all collectively or tax them separately, and calling a tax on the use alone an excise does not affect its validity under the commerce clause.

2. A Washington statute provides that, after May 1, 1935, every retail sale of tangible personal property made in that State (with some enumerated exceptions) shall be subject to a tax of 2% of the selling price; it also lays a tax or excise, called "compensation tax," on the privilege of using within the State any article of tangible personal property, purchased at retail after April 30, 1935 at the rate of 2% of the purchase price, including in such price the cost of transportation from the place where the article was purchased; but the compensation tax is not to apply to the use of any article the sale or use of which has already been subjected to a tax equal to or in excess of 2% whether such prior tax was under the laws of Washington or those of some other State, and if the rate of such other tax is less than 2%, the Washington use tax rate is to be measured by the difference. In practical effect, the use tax helps retail sellers in Washington to compete upon terms of equality with retail dealers in other States who are exempt from a sales tax or any corresponding burden, and tends to avoid a drain upon the revenues of the State through the placing of orders in other States to escape the taxes on local sales.

Held, as applied to machinery and other things purchased in other States but which had had continuous use in Washington long after the time when delivery there was over:

(1) That the use tax is not upon the operations of interstate commerce, but upon the privilege of use after commerce is at an end. P. 300 U. S. 582.

Page 300 U. S. 578

(2) The tax upon the use after the property is at rest is not so measured or conditioned as to hamper the transactions of interstate commerce or discriminate against them. P. 300 U. S. 583.

(3) Reading the statute as not taxing the use of articles manufactured by the users, or received as legacies, or acquired in any other way except purchase at retail does not make the tax on use in fact a tax on the foreign sales. P. 300 U. S. 587.

3. Motives leading to its adoption can seldom, if ever, invalidate a tax which, apart from motives, would be recognized as lawful. P. 300 U. S. 586.

4. A legislature has a wide range of choice in classifying and limiting the subjects of taxation. The choice is as broad where the tax is laid upon one or a few of the attributes of ownership as when laid upon them all. P. 300 U. S. 587.

15 F.Supp. 958 reversed.

Appeal from a decree of the District Court of three judges holding unconstitutional a tax on the use of chattels bought in other States and brought into the Washington and used there. The suit was by the taxpayer to enjoin the Tax Commission of Washington from collecting the tax.

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