United Air Lines, Inc. v. Joseph ( 1953 )

Callahan, J.

(dissenting). I disagree with the majority’s application of the de minimis rule in determining whether a privilege tax imposed by a locality unduly burdens interstate commerce. The cases applying or discussing this principle involved situations where a carrier in the course of a single trip between termini within a State departed briefly from the State and returned, and the question was considered as to whether such departure transformed an otherwise intrastate activity into an interstate transportation or commerce. (See Greyhound Lines v. Mealey, 334 U. S. 653, and Lehigh Valley Railroad v. Pennsylvania, 145 U. S. 192.) In the Greyhound case the court noted that legal fictions are hazardous especially in the disposition of constitutional issues.

The tax statute in this case provides for imposition of the tax only upon “ receipts received in and/or allocable to the city ” from the business activity carried on by the taxpayer. Its imposition is not unconstitutional simply because the taxpayer is engaged in both interstate and intrastate activities.

Assuming that the concededly intrastate activity of the taxpayer represented only a small percentage of its total business and that the balance was interstate, it seems to me that in such case there would be sufficient local activity to subject the taxpayer to a local privilege tax based on its gross receipts, including its receipts from interstate commerce, provided the tax was properly apportioned. Here we have entirely separable and distinct transactions wholly consummated within the State. We may not say that these activities afford no constitutional basis for a privilege tax nondiscriminatory and properly apportioned on the theory that the de minimis rule entitles us to disregard the local transactions as comparatively unimportant.

While the factors entering into the apportionment formula of the instant tax are relevant, I have no occasion to decide whether they have been fully and properly applied, or whether the tax regulations are in any way discriminatory or arbitrary so as to trespass on constitutional limitations.

Accordingly, I dissent from the majority holding that the tax under review is unconstitutional and void'in its application to the petitioner in this proceeding.

Dore, J. P., Cohn and Van Voorhis, JJ., concur with Breitel, J.; Callahan, J., dissents in opinion.

Determination annulled and a refund directed of the taxes paid for the years 1943, 1944 and 1945. Settle order on notice.