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Apart from these more fundamental considerations which we think are of controlling force in the application of the commerce clause, we can find no adequate basis for distinguishing the present tax laid on the sale or purchase of goods upon their arrival at destination at the end of an interstate journey from the tax which may be laid in like fashion on the property itself. That the latter is a permissible tax has long been established by an unwavering line of authority. Brown v. Houston, supra; Coe v. Errol, 116 U. S. 517; Pittsburgh & Southern Coal Co. v. Bates, 156 U. S. 577; American Steel & Wire Co. v. Speed, supra, 520; General Oil Co. v. Crain, 209 U. S. 211; Bacon v. Illinois, 227 U. S. 504. As we have often pointed out, there is no distinction in this relationship between a tax on property, the sum of all the rights and powers incident to ownership, and the taxation of the exercise of some of its constituent elements. Nashville, C. & St. L. Ry. Co. v. Wallace, supra, 267, 268; Henneford v. Silas Mason Co., supra, 582; cf. Bromley v. McCaughn,
whether a particular exertion of taxing power by a state “so operated upon interstate commerce as to amount to a regulation thereof, in conflict with the paramount authority conferred upon Congress.” He pointed out that the Court in these cases “conceded that the goods which were taxed had not completely lost their character as interstate commerce since they had not been sold in the original package. As, however, they had arrived at their destination, were at rest in the State, were enjoying the protection which the laws of the State afforded, and were taxed without discrimination like all other property, it was held that the tax did not amount to a regulation in the sense of the Constitution, although its levy might remotely and indirectly affect interstate commerce.” Cf. Cardozo, J., in Baldwin v. Seelig, 294 U. S. 511, 526.
"The test of the ‘original package,' which came into our law with Brown v. Maryland, 12 Wheat. 419, is not inflexible and final for the transactions of interstate commerce, whatever may be its validity for commerce with other countries. Cf. Woodruff v. Parham, supra; Anglo-Chilean Nitrate Sales Corp. v. Alabama, 288 U. S. 218, 226. There are purposes for which merchandise, transported from another
Opinion of the Court.
280 U. S. 124, 136-138. If coal situated as that in the present case was, before its delivery, subject to a state property tax, see Brown v. Houston, supra; Pittsburgh & Southern Coal Co. v. Bates, supra, transfer of possession of the coal upon a sale is equally taxable, see Wiloil Corp. v. Pennsylvania, supra, 175, just as was the storage or use of the property in similar circumstances held taxable in Nashville, C. & St. L. Ry. Co.v. Wallace, supra; Henneford v. Silas Mason Co., supra.
Respondent, pointing to the course of its business and to its contracts which contemplate the shipment of the coal interstate upon orders of the New York customers, insists that a distinction is to be taken between a tax laid on sales made, without previous contract, after the merchandise has crossed the state boundary, and sales, the contracts for which when made contemplate or require the transportation of merchandise interstate to the taxing
state, will be treated as a part of the general mass of property at the state of destination though still in the original containers. This is so, for illustration, where merchandise so contained is subjected to a non-discriminatory property tax which it bears equally with other merchandise produced within the state. Sonneborn Bros. v. Cureton, 262 U. S. 506; Texas Co. v. Brown, 258 U. S. 466, 475; American Steel & Wire Co. v. Speed, 192 U. S. 500.
'A state tax upon merchandise brought in from another State, or upon its sales, whether in original packages or not, after it has reached its destination and is in a state of rest, is lawful only when the tax is not discriminating in its incidence against the merchandise because of its origin in another State.' Sonneborn Bros. v. Cureton, supra, at p. 516. Cf. Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 465, 491; * In brief, the test of the original package is not an ultimate principle. It is an illustration of a principle. Pennsylvania Gas Co. v. Public Service Comm'n, 225 N. Y. 397, 403; 122 N. E. 260. It marks a convenient boundary and one sufficiently precise save in exceptional conditions. What is ultimate is the principle that one state in its dealings with another may not place itself in a position of economic isolation. Formulas and catchwords are subordinate to this overmastering requirement."
state. Only the sales in the state of destination in the latter class of cases, it is said, are protected from taxation by the commerce clause, a qualification which respondent concedes is a salutary limitation upon the reach of the clause since its use is thus precluded as a means of avoiding state taxation of merchandise transported to the state in advance of the purchase order or contract of sale.
But we think this distinction is without the support of reason or authority. A very large part, if not most of the merchandise sold in New York City, is shipped interstate to that market. In the case of products like cotton, citrus fruits and coal, not to mention many others which are consumed there in vast quantities, all have crossed the state line to seek a market, whether in fulfillment of a contract or not. That is equally the case with other goods sent from without the state to the New York market, whether they are brought into competition with like goods produced within the state or not. We are unable to say that the present tax, laid generally upon all sales to consumers within the state, subjects the commerce involved where the goods sold are brought from other states, to any greater burden or affects it more, in any economic or practical way, whether the purchase order or contract precedes or follows the interstate shipment. Since the tax applies only if a sale is made, and in either case the object of interstate shipment is a sale at destination, the deterrent effect of the tax would seem to be the same on both. Restriction of the scope of the commerce clause so as to prevent recourse to it as a means of curtailing state taxing power seems as salutary in the one case as in the other.
True, the distinction has the support of a statement obiter in Sonneborn Bros. v. Cureton, supra, 515, and seems to have been tacitly recognized in Ware & Leland v. Mobile County, 209 U. S. 405, 412, and Banker Bros.
Opinion of the Court.
Co. v. Pennsylvania, supra, although in each case a tax on the sale of goods brought into the state for sale was upheld. But we have sustained the tax where the course of business and the agreement for sale plainly contemplated the shipment interstate in fulfilment of the contract. Wiloil Corporation v. Pennsylvania, supra, 173; Graybar Electric Co. v. Curry, supra. In the same circumstances the Court has upheld a property tax on the merchandise transported, American Steel & Wire Co. v. Speed, supra; General Oil Co. v. Crain, supra; see Bacon v. Illinois, supra, 515, 516; upon its use, Monamotor Oil Co. v. Johnson, supra; Felt & Tarrant Co. v. Gallagher, supra, and upon its storage; cf. Gregg Dyeing Co. v. Query, supra; Nashville, C. & St. L. Ry. Co. v. Wallace, supra. Taxation of property or the exercise of a power over it immediately preceding its previously contemplated shipment interstate has been similarly sustained. Coe v. Errol, supra; Bacon v. Illinois, supra; Federal Compress & Warehouse Co. v. McLean, 291 U. S. 17. For reasons already indicated all such taxes upon property or the exercise of the powers of ownership stand in no different relation to interstate commerce and have no different effect upon it than has the present sales tax upon goods whose shipment interstate into the taxing state was contemplated when the contract was entered into.
It is also urged that the conclusion which we reach is inconsistent with the long line of decisions of this Court following Robbins v. Shelby County Taxing District, 120 U. S. 489, which have held invalid, license taxes to the extent that they have sought to tax the occupation of soliciting orders for the purchase of goods to be shipped into the taxing state. In some instances the tax appeared to be aimed at suppression or placing at a disadvantage this type of business when brought into competition with competing intrastate sales. See Robbins v. Shelby County
Taxing District, supra, 498; Caldwell v. North Carolina, 187 U. S. 622, 632.11 In all, 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, see Puget Sound Power & Light Co. v. Seattle, 291 U. S. 619, 625, and cases cited, it does not follow that interstate commerce may be similarly affected by the practical operation of a state taxing statute. Compare Hammond Packing Co. v. Montana, 233 U. S. 331, Magnano Co. v. Hamilton, 292 U. S. 40, with Schollenberger v. Pennsylvania, 171 U. S. 1; Robbins v. Shelby County Taxing District, supra; Sprout v. South Bend, 277 U. S. 163. It is enough for present pur
11. When the Robbins case was decided, sixteen states required the payment of license taxes by some kinds of drummers. For citations of the statutes, see, Lockhart, Sales Tax in Interstate Commerce, 52 Harv. L. Rev. 617, 621. More recently it has been estimated that almost 800 municipal ordinances directed at drummers were adopted for the purpose of embarrassing this competition with local merchants. Hemphill, the House to House Canvasser in Interstate Commerce, 60 Am. L. Rev. 641. The court was cognizant of this trend, see Robbins v. Shelby County Taxing District, 120 U. S. 489, 498. Following this decision 19 such taxes were declared invalid. Carson v. Maryland, 120 U. S. 502; Asher v. Texas, 128 U. S. 129; Stoutenburgh v. Hennick, 129 U. S. 141; Brennan v. Titusville, 153 U. S. 289; Stockard v. Morgan, 185 U. S. 27; Caldwell v. North Carolina, 187 U. S. 622; Crenshaw v. Arkansas, 227 U. S. 389; Rogers v. Arkansas, 227 U. S. 401; Stewart v. Michigan, 232 U. S. 665; Davis v. Virginia, 236 U. S. 697; Real Silk Hosiery Mills v. Portland, 268 U. S. 325. Read in their proper historical setting these cases may be said to support the view that this kind of a tax is likely to be used "as an instrument of discrimination against interstate or foreign commerce," see DiSanto v. Pennsylvania, 273 U. S. 34, 39.