BROWN v. MARYLAND; THE ORIGINAL PACKAGE DOCTRINE
The leading case under this heading is Brown v. Maryland,[535] decided in 1827, the issue in which was the validity of a Maryland statute requiring "all importers of foreign articles or commodities," preparatory to selling the same, to take out a license. Holding this act to be void under both article I, sec. 10, and the commerce clause, the Court, speaking through Chief Justice Marshall, advanced the following propositions: (1) that "commerce is intercourse; one of its most ordinary ingredients is traffic"; (2) that the right to import includes the right to sell; (3) that a tax on the sale of an article is a tax on the article itself—a conception of the incidence of taxation which has at times had important repercussions in other fields of Constitutional Law; (4) that the taxing power of the State does not extend in any form to imports from abroad so long as they remain "the property of the importer, in his warehouse, in the original form or package" in which they were imported—the famous "original package doctrine"; (5) that once, however, the importer parts with his importations "or otherwise mixes them with the general property of the State by breaking up his packages," the law may treat them as part and parcel of such property; (6) that even while in the original package imports are subject to the incidental operation of police measures adopted by the State in good faith for the protection of the public against apparent dangers. Lastly, in determining whether a State law amounts to a regulation of commerce the Court would, Marshall announced, be guided by "substance" and not by "form"—a proposition which has many times opened the way to extensive inquiries by the Court into the actualities both of commercial practice and of State administration.
The decision in Brown v. Maryland, but more especially the "original package doctrine" there laid down, has been sometimes criticised as going too far. It would have been sufficient, the critics contend, for the Court to have held the Maryland act void on account of its obviously discriminatory character; and they urge that original packages receiving the protection of the State ought to be subject to nondiscriminatory taxation by it. The criticism was partially anticipated by Marshall himself in the apprehensions which he voiced that any concession to "the great importing States" might be turned by them against the rest of the country. Indeed, he is uncertain whether the original package doctrine will prove sufficient for its purposes and accordingly offers it not as a rule "universal in its application," but rather as a stop-gap principle. History has proved, however, that in this he builded better than he knew. For in the field of foreign commerce the original package doctrine has never been disturbed, and it has scarcely been added to; and so confined, it has never been surpassed by any later piece of judicial legislation, whether in point of durability or in that of definiteness and easy comprehensibility.[536]
State Taxation of the Subject Matter of Interstate Commerce
GENERAL CONSIDERATIONS
The task of drawing the line between State power and the commercial interest has proved a comparatively simple one in the field of foreign commerce, the two things being in great part territorially distinct. With "commerce among the States" it is very different. This is conducted in the interior of the country, by persons and corporations that are ordinarily engaged also in local business; its usual incidents are acts which, if unconnected with commerce among the States, would fall within the State's powers of police and taxation; while the things it deals in and the instruments by which it is carried on comprise the most ordinary subject matter of State power. In this field the Court has, consequently, been unable to rely upon sweeping solutions. To the contrary, its judgments have often been fluctuating and tentative, even contradictory; and this is particularly the case as respects the infringement of the State taxing power on interstate commerce. In the words of Justice Frankfurter: "The power of the States to tax and the limitations upon that power imposed by the Commerce Clause have necessitated a long, continuous process of judicial adjustment. The need for such adjustment is inherent in a Federal Government like ours, where the same transaction has aspects that may concern the interests and involve the authority of both the central government and the constituent States. The history of this problem is spread over hundreds of volumes of our Reports. To attempt to harmonize all that has been said in the past would neither clarify what has gone before nor guide the future. Suffice it to say that especially in this field opinions must be read in the setting of the particular cases and as the product of preoccupation with their special facts."[537]
THE STATE FREIGHT TAX CASE
The great leading case dealing with the relation of the State's taxing power to interstate commerce is that of the State Freight Tax,[538] decided in 1873. The question before the Court was the validity of a Pennsylvania statute, passed eight years earlier, which required every company transporting freight within the State, with certain exceptions, to pay a tax at specified rates on each ton of freight carried by it. Overturning the act, the Court held: "(1) The transportation of freight, or of the subjects of commerce, is a constituent part of commerce itself; (2) a tax upon freight, transported from State to State, is a regulation of commerce among the States; (3) whenever the subjects in regard to which a power to regulate commerce is asserted are in their nature National, or admit of one uniform system or plan of regulation, they are exclusively within the regulating control of Congress; (4) transportation of passengers or merchandise through a State, or from one State to another, is of this nature; (5) hence a statute of a State imposing a tax upon freight, taken up within the State and carried out of it, or taken up without the State and brought within it, is repugnant to that provision of the Constitution of the United States, which ordains that 'Congress shall have power to regulate commerce with foreign nations and among the several States, and with the Indian tribes.'"[539]
GOODS IN TRANSIT
States, therefore, may not tax property in transit in interstate commerce. A nondiscriminatory tax, however, is permitted if the goods have not yet started in interstate commerce, or have completed the interstate transit even though still in the original package, unless they are foreign imports in the original package; and States may also impose a nondiscriminatory tax when there is a break in an interstate transit, and the goods have not been restored to the current of interstate commerce. Such is the law in brief. Two questions arise, first, when do goods originating in a State pass from under its power to tax; and, second, when do goods arriving from another State lose their immunity?