ROBERTS, J., dissenting.

312 U.S.

as assumed losses on tax collections are concerned, respondent is in no position to found a constitutional right on the practical opportunities for tax avoidance which its method of doing business affords Iowa residents, or to claim a constitutional immunity because it may elect to deliver the goods before the tax is paid.

Prohibited discriminatory burdens on interstate commerce are not to be determined by abstractions. Particular facts of specific cases determine whether a given tax prohibitively discriminates against interstate commerce. Hence a review of prior adjudications based on widely disparate facts, howsoever embedded in general propositions, does not facilitate an answer to the present problem.

The judgment is reversed and the cause is remanded to the Iowa Supreme Court for proceedings not inconsistent with this opinion.

Reversed.

MR. JUSTICE STONE took no part in the consideration or disposition of this case.

MR. JUSTICE ROBERTS, dissenting.

I think that the judgment should be affirmed. The respondent, a New York corporation, conducts an interstate mail order business. It has also established retail stores throughout the country. In 1928, to secure the privilege of conducting stores in Iowa as a foreign corporation, it obtained a permit which has been kept in force by payment of the fees prescribed by the State. No question arises with respect to the collection by the respondent of the tax on sales made-in stores in Iowa or on sales based upon orders taken in those stores but filled by forwarding articles from a warehouse in another state.

The controversy arises only over pure mail order sales. These are consummated in the following manner: The respondent forwards to persons in Iowa catalogues de

359

ROBERTS, J., dissenting.

tailing the articles it has for sale, the prices, and the cost of transporting them. A person in Iowa forwards his written order to one of the respondent's mail order houses located outside Iowa for the purchase of tangible personal property as listed and priced in respondent's catalogue, the order being accompanied by a remittance of the purchase price, plus transportation charges, and usually specifying the method of transportation desired by the purchaser. The order is accepted or rejected at the place where it is received and, if accepted, is filled by delivery to the post office or to a carrier for direct shipment from the extra-state mail order house to the purchaser in Iowa.

This mail order branch of respondent's business is separate and distinct from any activity conducted at its stores in Iowa. In conducting it the respondent is in direct competition with other mail order houses which conduct their business in exactly similar fashion but have no stores in Iowa and are not therein registered as foreign corporations.

The method necessarily pursued in the respondent's mail order business makes it a certainty that it will be unable, by whatever practical efforts it may put forth, to collect the amount of the use tax on all its mail order sales made to persons in Iowa. In 1937 the number of its mail order transactions with some 300,000 persons in Iowa was approximately 1,200,000. Under the statute as attempted to be enforced against its mail order business, if, in 1937, the respondent had failed to collect from each customer the sum involved as tax, it would have been liable to Iowa in the aggregate for two per cent. on approximately $5,400,000,-the volume of its Iowa mail order business in that year. If it had made the effort to collect the tax, the cost of so doing would have been approximately eighteen per cent. of the total tax on the mail order sales made to persons in Iowa and, in addition to that cost, the respondent would have been liable

ROBERTS, J., dissenting.

312 U.S.

for approximately $38,000 of tax uncollected from purchasers. In addition, as a result of the exaction, the respondent's mail order business will be placed at a serious disadvantage in competition with other mail order concerns which have no retail stores in Iowa and so have a price advantage of two per cent. of sales price as against respondent.

The penalty for failing to collect the tax as agent for the State, or to pay the sum not susceptible of collection from purchasers, as required by the State, will be the revocation of respondent's permit for the conduct of its stores in Iowa, which represent a large expenditure for furniture, fixtures, appliances, and stock, and will entail loss of rental values under long term leases.

I am of opinion that the attempted enforcement of the statute in the manner proposed by the taxing authorities of the State violates both the commerce clause and the Fourteenth Amendment of the Constitution.

First. The respondent's mail order business is interstate commerce,' and Iowa may not prohibit the respondent from conducting that business with her citizens. To attempt so to do would be a violation of the commerce clause of the Constitution.

Not only so, but Iowa may not directly burden such commerce. Therefore she may not tax the privilege of engaging in it; regulate or license its pursuit, or tax the

'Heyman v. Hayes, 236 U. S. 178, 186.

3

"Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 465; Leisy v. Hardin, 135 U. S. 100; Schollenberger v. Pennsylvania, 171 U. S. 1; West v. Kansas Natural Gas Co., 221 U. S. 229, 250, 262; Louisville & Nashville R. Co. v. Cook Brewing Co., 223 U. S. 70, 82; Minnesota Rate Cases, 230 U. S. 352, 401.

'International Text Book Co. v. Pigg, 217 U. S. 91, 105, 108; Buck Stove Co. v. Vickers, 226 U. S. 205, 215; Sault Ste. Marie v. International Transit Co., 234 U. S. 333, 340; Lemke v. Farmers Grain

Co., 258 U. S. 50; Puget Sound Stevedoring Co. v. Tax Commission, 302 U. S. 90, 94.

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ROBERTS, J., dissenting.

gross income derived from it. And even if the respondent maintained a force of agents in Iowa soliciting orders to be shipped in interstate commerce that fact would not render it amenable to the regulation or taxation of its mail order business."

7

Thus Iowa may not lawfully license or regulate the business of agents soliciting orders to be shipped in interstate commerce; or limit or condition the right to enforce mail order contracts in Iowa courts. The power to exclude foreign corporations altogether from doing a local business does not enable the State to impose burdens upon the transaction of interstate commerce by a foreign corporation registered in the State; and registration by a foreign corporation in order to do business within the State does not constitute a waiver of the corporation's right to transact interstate business free from the burdens of state regulation or taxation.8

Iowa may not abuse its conceded power to tax or regulate the respondent's activities within the State by attempting to compel compliance by the respondent with unconstitutional efforts to tax or burden its interstate commerce." And Iowa may not forfeit, as it proposes to do, the right to conduct a domestic business by reason of the refusal of the respondent to submit to a burden upon its interstate business.1

4

10

Fisher's Blend Station v. Tax Commission, 297 U. S. 650, 655; Adams Manufacturing Co. v. Storen, 304 U. S. 307.

"Crutcher v. Kentucky, 141 U. S. 47; International Text Book Co. v. Pigg, supra.

"Brennan v. Titusville, 153 U. S. 289; Crenshaw v. Arkansas, 227 U. S. 389.

7

Sioux Remedy Co. v. Cope, 235 U. S. 197, 201; Furst & Thomas v. Brewster, 282 U. S. 493.

8

Fidelity & Deposit Co. v. Tafoya, 270 U. S. 426, 434; Hanover Fire Ins. Co. v. Harding, 272 U. S. 494, 507, 517.

'Looney v. Crane Co., 245 U. S. 178, 187.

10 Western Union Telegraph Co. v. Kansas, 216 U. S. 1, 34; Pullman Co. v. Kansas, 216 U. S. 56; Atchison, T. & S. F. Ry. Co. v.

ROBERTS, J., dissenting.

312 U.S.

Clearly in this instance the effort is directly and substantially to burden the transaction of an interstate business with the state's citizens, in violation of the commerce clause, by the threat of penalizing disobedience by the forfeiture of the right to transact, within Iowa, an independent business which the respondent conducts in accordance with all existing laws, including the law requiring it to deduct and pay over the amount of the Iowa sales tax. Upon reason, as well as upon the unbroken current of authority in this court, Iowa has no such power to burden interstate commerce.

Monamotor Oil Co. v. Johnson, 292 U. S. 86, and Felt & Tarrant Mfg. Co. v. Gallagher, 306 U. S. 62, relied upon by the petitioners, are not in point.

The first is not apposite because there the company was engaged in the distribution of gasoline in the State of Iowa. This was the only activity drawn in question. The statute merely required the company, in distributing gasoline to users, to add the tax to its sales price and report and return the amount of tax thus withheld. In the second, the collection of the use tax was imposed with respect to property sold by the corporation through its general agents who were doing business in the State of California and were handling articles sold for delivery in that State. As an incident of such sales, the seller was required to add the tax and make return of it to the State.11

In justification of the exaction it is said that the purchaser is in Iowa and the tax is on the purchaser's use in that State. But if these facts were determinative they would justify the imposition of a tax or burden, by the

O'Connor, 223 U. S. 280, 285; Western Union Tel. Co. v. Foster, 247 U. S. 105, 114; Frost Trucking Co. v. Railroad Commission, 271 U. S. 583, 593.

"Compare Wiloil Corporation v. Pennsylvania, 294 U. S. 169; Graybar Electric Co. v. Curry, 308 U. S. 513.