416 Opinion of the Court. York. It is urged that the case is indistinguishable from the present one on any tenable basis relating to the bearing or effect of the tax upon interstate commerce, although the opinion reviewed at some length the drummer cases, among others, and expressly distinguished them." Unless therefore this latest pronouncement upon their continuing authority is to be put aside with the cases themselves, the application made of the ordinance in this case must be stricken down. For the tax thus laid is precisely the "fixed-sum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped * Some reliance appears to be placed also upon other more recent cases, including International Harvester Co. v. Department of Treasury, 322 U. S. 340, and General Trading Co. v. State Tax Commission, 322 U. S. 335. 5 Pointing out, with a reference to the Shelby County case itself, that in some of the cases the tax appeared to be aimed at the suppression of this type of business or putting it at disadvantage with competing intrastate sales, the opinion continued: "In all [the cited cases], the statute, in its practical operation, was capable of use, through increase in the tax, and in fact operated to some extent to place the merchant thus doing business interstate at a disadvantage in competition with untaxed sales at retail stores within the state. While a state, in some circumstances, may by taxation suppress or curtail one type of intrastate business to the advantage of another type of competing business which is left untaxed, . . . it does not follow that interstate commerce may be similarly affected by the practical operation of a state taxing statute. . . . It is enough for present purposes that the rule of Robbins v. Shelby County Taxing District, supra, has been narrowly limited to fixedsum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped interstate . .; and that the actual and potential effect on the commerce of such a tax is wholly wanting in the present case." 309 U. S. at 56-57. In Best & Co. v. Maxwell the Court said: "In McGoldrick v. Berwind-White Co. . . . we pointed out that the line of decisions following Robbins v. Shelby County... rested on the actual and potential discrimination inherent in certain fixed-sum license taxes." 311 U. S. 454, 455, note 3. 691100°-47- -31 Opinion of the Court. 327 U.S. cable to appellant in the circumstances disclosed by the facts and was of the opinion that, so applied, it was not in conflict with the commerce clause. Accordingly the court found the appellant guilty and fined her five dollars and costs. The Supreme Court of Appeals of Virginia affirmed. 183 Va. 689, 33 S. E. 2d 206. From that judgment of the State's highest court the case comes here by appeal. If the matter is to be settled solely on the basis of authority, nothing more is required than bare reference to the long list of drummer decisions, which have held unvaryingly that such a tax as Richmond has exacted cannot be applied constitutionally to situations identical with or substantially similar to the facts of this case. Among the latest of these is Real Silk Hosiery Mills v. Portland, 268 U. S. 325, in which a municipal ordinance requiring solicitors to pay a license fee was held unconstitutional as a forbidden burden upon interstate commerce when applied to an out-of-state corporation whose representatives solicited orders for subsequent interstate shipment. Cf. Best & Co. v. Maxwell, 311 U. S. 454. Counsel for Richmond, however, insist that other cases decided here have seriously impaired the "drummer" line of authority, so much so that those rulings no longer can stand consistently with the later ones. Their principal reliance is on McGoldrick v. Berwind-White Co., 309 U.S. 33, in which the Court sustained the application of New York City's sales tax to the delivery there, at the end of its interstate journey, of coal shipped from Pennsylvania pursuant to contracts of sale previously made in New those Clerks orders for the sale of merchandise on behalf of the American Garment Company, and that such solicitation occurred on the 20th of January, 1944, and that she, the said Dorothy Nippert, had not there[to]fore procured a City revenue license from the City of Richmond." 416 Opinion of the Court. York. It is urged that the case is indistinguishable from the present one on any tenable basis relating to the bearing or effect of the tax upon interstate commerce, although the opinion reviewed at some length the drummer cases, among others, and expressly distinguished them.5 Unless therefore this latest pronouncement upon their continuing authority is to be put aside with the cases themselves, the application made of the ordinance in this case must be stricken down. For the tax thus laid is precisely the "fixed-sum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped * Some reliance appears to be placed also upon other more recent cases, including International Harvester Co. v. Department of Treasury, 322 U. S. 340, and General Trading Co. v. State Tax Commission, 322 U.S. 335. 5 Pointing out, with a reference to the Shelby County case itself, that in some of the cases the tax appeared to be aimed at the suppression of this type of business or putting it at disadvantage with competing intrastate sales, the opinion continued: ... "In all [the cited cases], the statute, in its practical operation, was capable of use, through increase in the tax, and in fact operated to some extent to place the merchant thus doing business interstate at a disadvantage in competition with untaxed sales at retail stores within the state. While a state, in some circumstances, may by taxation suppress or curtail one type of intrastate business to the advantage of another type of competing business which is left untaxed, it does not follow that interstate commerce may be similarly affected by the practical operation of a state taxing statute... It is enough for present purposes that the rule of Robbins v. Shelby County Taxing District, supra, has been narrowly limited to fixedsum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped interstate . . .; and that the actual and potential effect on the commerce of such a tax is wholly wanting in the present case." 309 U. S. at 56-57. In Best & Co. v. Maxwell the Court said: "In McGoldrick v. Berwind-White Co. . . . we pointed out that the line of decisions following Robbins v. Shelby County ... rested on the actual and potential discrimination inherent in certain fixed-sum license taxes." 311 U. S. 454, 455, note 3. 691100°-47-31 327 U.S. Opinion of the Court. interstate" which the Berwind-White opinion distinguished from the New York tax." But we are told that the rationale of the decision requires the distinction to be discarded. As counsel state it, this was "that the tax was imposed upon events which occurred within the taxing jurisdiction which events are separate and distinct from the transportation or intercourse which is interstate commerce.' "The logic is completed by noting that the New York tax was upon the “local incident" of "delivery" while in this case it is on the like incident of "solicitation"; and by adding the contention, given more substance since the argument by our decision in International Shoe Co. v. Washington, 326 U. S. 310, that "mere solicitation" when it is regular, continuous and persistent, rather than merely casual, constitutes "doing business," contrary to formerly prevailing notions. Hence it is concluded, since the delivery in the Berwind-White case could be taxed, so can the solicitation in this case. 6 See note 5. Whether or not the "fixed sum" reference would apply to a tax measured in part by gross receipts (cf. the language of the ordinance in this case relating to earnings, etc., in excess of $1000), the tax as applied here presumably would not involve that feature, since by the explicit wording it applies only to earnings, etc., "for the preceding license year" and there is no showing relating to such earnings in this case. See also note 7. 7 Counsel cite the Court's statement made in differentiating Adams Mfg. Co. v. Storen, 304 U. S. 307, "The rationale of the Adams Manufacturing Co. case does not call for condemnation of the present tax. Here the tax is conditioned upon a local activity, delivery of goods within the state upon their purchase for consumption." 309 U. S. at 58. (Emphasis added.) However, the Court went on immediately to say, "It is an activity which, apart from its effect on the commerce, is subject to the state taxing power. The effect of the tax, even though measured by the sales price [cf. note 6 supra], as has been shown, neither discriminates against nor obstructs interstate commerce more than numerous other state taxes which have repeatedly been sustained as involving no prohibited regulation of interstate commerce." Ibid. 416 Opinion of the Court. Appellee's rationalization takes only partial account of the reasoning and policy underlying the Berwind-White decision and its differentiation of the drummer authorities. If the only thing necessary to sustain a state tax bearing upon interstate commerce were to discover some local incident which might be regarded as separate and distinct from "the transportation or intercourse which is" the commerce itself and then to lay the tax on that incident, all interstate commerce could be subjected to state taxation and without regard to the substantial economic effects of the tax upon the commerce. For the situation is difficult to think of in which some incident of an interstate transaction taking place within a State could not be segregated by an act of mental gymnastics and made the fulcrum of the tax. All interstate commerce takes place within the confines of the States and necessarily involves "incidents" occurring within each State through which it passes or with which it is connected in fact. And there is no known limit to the human mind's capacity to carve out from what is an entire or integral economic process particular phases or incidents, label them as "separate and distinct" or "local," and thus achieve its desired result. It has not yet been decided that every state tax bearing upon or affecting commerce becomes valid, if only some conceivably or conveniently separable "local incident" may be found and made the focus of the tax. This is not to say that the presence of so-called local incidents is irrelevant. On the contrary the absence of any connection in fact between the commerce and the state would be sufficient in itself for striking down the tax on due process grounds alone; and even substantial connections, in an economic sense, have been held inadequate to support the local tax. But beyond the presence of a sufficient con 8 The latest instance decided here being McLeod v. Dilworth Co., 322 U. S. 327. |