By the same token, local sales of goods brought into a State from another State are subject to a nondiscriminatory exercise of its taxing power. Such a tax, the Court has said, "has never been regarded as imposing a direct burden upon interstate commerce and has no greater or different effect upon that commerce than a general property tax to which all those enjoying the protection of the State may be subjected"; and this is true, even of goods immediately to be used in interstate commerce.[565] The commerce clause, therefore, does not prohibit a State from imposing special license taxes on merchants using profit sharing coupons and trading stamps although the coupons may have been inserted in retail packages by the manufacturer or shipper outside the State and are redeemable outside the State, either by such manufacturer or shipper, or by some other agency outside the State;[566] nor yet a nondiscriminatory tax upon local peddling of goods and sales thereof by peddlers even though the goods are foreign or interstate imports, since the sale occurs after foreign or interstate commerce thereof has ended.[567] And in Kehrer v. Stewart[568] it was held that a State tax upon resident managing agents of nonresident meatpacking houses did not conflict with the commerce clause, regardless of the fact that the greater portion of the business was interstate in character, the tax having been construed by the highest court of the State as applying only to the business of selling to local customers from the stock of "original packages" shipped into the State without a previous sale or contract to sell, and kept and held for sale in the ordinary course of trade. Contrariwise, a tax on sales discriminatory in its incidence against merchandise because of its origin in another State is ipso facto unconstitutional. The leading case is Welton v. Missouri,[569] decided in 1876, in which a peddler's license tax confined to the sale of goods manufactured outside the State was set aside. The doctrine of Welton v. Missouri has been reiterated many times.[570]
It also follows logically from Coe v. Errol,[571] and the cases deriving from it, that a State may impose a nondiscriminatory tax when there is a break in interstate transit, and the goods have not been restored to the current of interstate commerce. The effect of an interruption upon the continuity of an interstate movement depends upon its causes and purposes. If the delay is due to the necessities of the journey, as in the Coe case, where the logs were detained for a time within the State by low water, they are deemed "in the course of commercial transportation, and * * * clearly under the protection of the Constitution."[572] Intention thus often enters into the determination of the question whether goods from another State have come to rest sufficiently to subject them to the local taxing power. In a typical case the Court held that oil shipped from Pennsylvania and held in tanks in Memphis, Tennessee for separation, distribution and reshipment, was subject to the taxing power of the latter State.[573] The delay in transportation resulting from these proceedings on the part of the owners, the Court pointed out, was clearly designed for their own profit and convenience and was not a necessary incident to the method of transportation adopted, as had been the delay of the logs coming from Maine in Coe v. Errol. The distinction is fundamental.[574]
Applying this rule in more recent cases, the Court has upheld State taxation: on the use and storage of gasoline brought into the State by a railroad company and unloaded and stored there, to be used for its interstate trains;[575] on gasoline imported and stored by an airplane company and withdrawn to fill airplanes that use it in their interstate travel;[576] on supplies brought into the State by an interstate railroad company to be used in replacements, repairs and extensions, and installed immediately upon arrival in the taxing State;[577] on equipment brought into the State by a telephone and telegraph company for operation, maintenance, and repair of its interstate system.[578] In all these cases the Court applied the principle that "use and storage" are subject to local taxation when "there is an interval after the articles have reached the end of their interstate movement and before their consumption in interstate operation has begun."[579] On the other hand, in the absence of such an "interval," the Court declared invalid State gasoline taxes imposed per gallon of gasoline imported by interstate carriers as fuel for use in such vehicles, and used within the State as well as in their interstate travel.[580]
THE DRUMMER CASES; ROBBINS v. SHELBY COUNTY TAXING DISTRICT
But there is one situation in which goods introduced into one State from another have until recent years enjoyed a special immunity from taxation by the former, and that is when they were introduced in consequence of a contract of sale. The leading case is Robbins v. Shelby County Taxing District,[581] in which the Court, after a penetrating survey of commercial practices, ruled that "the negotiation of sales of goods"—in this instance by sample—"which are in another State, for the purpose of introducing them into the State in which the negotiation is made, is interstate commerce." In short, whereas in foreign commerce, importation is succeeded by the right to sell in the original package, in interstate commerce sale was succeeded by the right of importation, which continued until the goods reached the hands of the purchaser. The benefits of this holding were extended in a series of rulings in which it was held to apply whether solicitation of orders was or was not made with sample,[582] and to sales which were not, accurately speaking, consummated until the actual delivery of the goods, which was attended by local incidents. So, where a North Carolina agent of a Chicago firm took orders for framed pictures, which were then sent to him packed separately from the frames and then framed by him before delivery, the rule laid down in the Robbins case was held to apply throughout, with the result that North Carolina could tax or license no part of the transaction described;[583] so also as to a sewing machine ordered by a customer in North Carolina and sent to her C.O.D.;[584] so also as to brooms sent in quantity for the fulfillment of a number of orders, and subject to rejection by the purchaser if deemed by him not up to sample.[585] Said Justice Holmes in the case last referred to: "'Commerce among the States' is a practical conception not drawn from the 'witty diversities' * * * of the law of sales. * * * The brooms were specifically appropriated to specific contracts, in a practical, if not in a technical, sense. Under such circumstances it is plain that, wherever might have been the title, the transport of the brooms for the purpose of fulfilling the contracts was protected commerce."[586] Nor did it make any difference that the solicitor received his compensation in form of down payment by the purchaser.[587] Moreover, sales under a mail order business, with delivery taking place within the State to a carrier for through shipment to another State to fill orders, was held to be beyond the taxing power of the first State.[588] The fact that a concern doing a strictly interstate business had goods on hand within the State which were capable of being used in intrastate commerce, did not, the Court declared, take the business out of the protection of the commerce clause and allow the State to impose a privilege tax on such concern.
LIMITATION OF THE ROBBINS CASE
On the other hand, it was early held that the rule laid down in the Robbins case did not prevent a State from taxing a resident citizen who engaged in a general commission business, on the profits thereof, although the business consisted "for the time being, wholly or partially in negotiating sales between resident and nonresident merchants, of goods situated in another State."[589] Also, it has been held that a stamp tax on transfers of corporate stock, as applied to a sale between two nonresidents, of the stock of foreign railway corporations, was not an interference with interstate commerce.[590] Likewise, the business of taking orders on commission for the purchase and sale of grain and cotton for future delivery not necessitating interstate shipment was ruled not to be interstate commerce, and as such exempt from taxation, although deliveries were sometimes made by interstate shipment.[591] And in Banker Bros. Co. v. Pennsylvania[592] it was held that a tax upon a domestic corporation selling automobiles built by a foreign corporation under an arrangement by which the latter agreed to build for and sell to the former, for cash, at a specified price less than list price, was not a tax on interstate transactions, there being nothing which connected the ultimate buyer with the manufacturer but a warranty and the buyer's agreement to pay the list price f.o.b. factory. Similarly, in Browning v. Waycross[593] it was held that the business of erecting lightning rods within the limits of a town by the agent of a nonresident manufacturer on whose behalf such agent had solicited orders for the sale of the rods, and from whom he had received them when shipped into the State, was validly subjected to a municipal license tax. "It was not," said the Court, "within the power of the parties by the form of their contract to convert what was exclusively a local business, * * *, into an interstate commerce business * * *"[594] Also, a municipal license tax upon persons engaged in the business of buying or selling cotton for themselves was found not to impose a forbidden burden upon interstate commerce even though the cotton was purchased with a view to ultimate shipment in some other State or country.[595] Nor was a gallonage tax imposed by a State upon a distributor of liquid fuel rendered repugnant to the commerce clause by the fact that the distributor caused fuel sold to customers in the State to be shipped from another State for delivery in tank cars—"deemed original packages"—on purchaser's siding, as agreed. Said the Court: "The contracts were executory and related to unascertained goods. * * * It does not appear that when they were made appellant had any fuels of the kinds covered, or that those to be delivered were then in existence. There was no selection of goods by purchasers. Appellant was not required by the contracts to obtain the fuels at Wilmington but was free to effect performance by shipping from, any place within or without Pennsylvania."[596]
In the cases reviewed in the preceding paragraph protestants against local taxation appealed, but unavailingly, to the Robbins case. So it would seem that the generative powers of that prolific precedent had begun to wane somewhat even before the Depression, an event which rendered judicial reaction against it still more pronounced. Indeed, by the Court's decision in McGoldrick v. Berwind-White Co.,[597] in 1940, the authority of the entire line of cases descending from Robbins v. Shelby County Taxing District was seriously impaired, for the time being, while a second holding the same year seemed to reduce the significance of the Robbins case itself to that of a reassertion of the elementary rule against discrimination. "The commerce clause," Justice Reed remarked sententiously, "forbids discrimination, whether forthright or ingenious."[598]