ArtI.S10.C2.1.1.2 Privilege Taxes

Article I, Section 10, Clause 2:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

A state law requiring importers to take out a license to sell imported goods amounts to an indirect tax on imports and hence is unconstitutional. 1 Likewise, a franchise tax upon foreign corporations engaged in importing nitrate and selling it in the original packages, 2 a tax on sales by brokers 3 and auctioneers 4 of imported merchandise in original packages, and a tax on the sale of goods in foreign commerce consisting of an annual license fee plus a percentage of gross sales, 5 have been held invalid. On the other hand, pilotage fees, 6 a tax upon the gross sales of a purchaser from the importer, 7 a license tax upon dealing in fish which, through processing, handling, and sale, have lost their distinctive character as imports, 8 an annual license fee imposed on persons engaged in buying and selling foreign bills of exchange, 9 and a tax upon the right of an alien to receive property as heir, legatee, or donee of a deceased person 10 have been held not to be duties on imports or exports.

Footnotes

  1.  Jump to essay-1Brown v. Maryland, 25 U.S. (12 Wheat.) 419, 447 (1827).
  2.  Jump to essay-2Anglo-Chilean Corp. v. Alabama, 288 U.S. 218 (1933).
  3.  Jump to essay-3Low v. Austin, 80 U.S. (13 Wall.) 29, 33 (1872).
  4.  Jump to essay-4Cook v. Pennsylvania, 97 U.S. 566, 573 (1878).
  5.  Jump to essay-5Crew Levick Co. v. Pennsylvania, 245 U.S. 292 (1917).
  6.  Jump to essay-6Cooley v. Board of Wardens, 53 U.S. (12 How.) 299, 313 (1851).
  7.  Jump to essay-7Waring v. The Mayor, 75 U.S. (8 Wall.) 110, 122 (1869). See also Pervear v. Massachusetts. 72 U.S. (5 Wall.) 475, 478 (1867); Schollenberger v. Pennsylvania, 171 U.S. 1, 24 (1898).
  8.  Jump to essay-8Gulf Fisheries Co. v. MacInerney, 276 U.S. 124 (1928).
  9.  Jump to essay-9Nathan v. Louisiana, 49 U.S. (8 How.) 73, 81 (1850).
  10.  Jump to essay-10Mager v. Grima, 49 U.S. (8 How.) 490 (1850).