Washington Chocolate Co. v. King County

I dissent, upon the ground that, at the time the merchandise here in question was assessed for taxation, the property had lost its original character of a foreign import and had become a part of the general mass of property situated within the state, and as such was subject to taxation upon the same basis as similar property which had its origin within this country.

It appears from the complaint of the respondent that

"Upon arrival in Seattle, the cocoa beans are stored by plaintiff either at its plant at 528 Pontius Avenue, Seattle, or at the warehouse of Commercial Warehouse Co. at 112 Alaska Way, Seattle, where they remain until used in plaintiff's [respondent's] manufacturing business."

It thus appears from the complaint itself that at the time here involved the merchandise was no longer in transit, but had come permanently to rest and, further, that the merchandise was then being held for use by respondent in its manufacturing business. In other words, the cocoa beans were as much a part of respondent's general supplies as were any other materials on hand for use in manufacturing respondent's products. The situation is analogous to that which obtained in the case ofSpaulding v. Adams County, 79 Wn. 193, 140 P. 367, wherein a manufacturer shipped several carloads of buggies from Grinnell, Iowa, to Ritzville in this state and there stored them in a warehouse until they were sold. Upon the arrival of the shipments in Ritzville, the corporate authorities of the county caused them to be valued for assessment purposes and to be taxed in such valuations. The manufacturer brought an action against the county to recover the amount of taxes paid by it and contended, among other things, that the goods were still in transit, or at least had not become a part of the mass of property within the county. Disposing of that contention, this court said:

"The property had reached its destination. It had come to its place of rest for final disposal and use, and was to remain there until finally disposed of by the owner. As such, we think it constituted a part of the mass of the general property of the county, even while on the cars, and was thus subject to taxation under the provision of the statute quoted, since it was the intention of the owners to take it to a place of business to be temporarily occupied for its sale."

If property brought into this state and stored in a warehouse for subsequent sale by the owner is subject to taxation by the state, it would seem that property brought into the state and held by the owner for use in its own manufacturing business would for at least equal reason be also subject to state taxation.

The majority opinion holds that the property is immune from general taxation solely upon the "original package" doctrine evolved in Brown v. Maryland, 25 U.S. 419, 6 L.Ed. 678, and reiterated in a number of cases cited in the majority opinion. That doctrine, as expounded in the Brown case, is that, so long as the thing imported remains the property of the importer in his warehouse, in the original formor package in which it was imported, a tax upon it is a duty or impost violative of Art. I, § 10, clause 2, of the Federal constitution, which provides that no state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws.

The purpose of the constitutional provision was to prevent the state from interfering with or placing a disadvantage upon commerce, either interstate or foreign, through the exercise of this state's taxing powers.

It seems to me that to apply the "original package" doctrine as the sole test of taxability of property is to make a fetish of a formula. The real test of the validity of a state tax is not whether the property sought to be taxed retains its original wrappings, but whether, in fact, the tax imposed actually restrains or interferes with commerce. It seems to me that where an article of merchandise has reached its destination, has exhausted its intended mobility, is being held by the owner for actual use in his business, just as he holds other property in the same business, and when such property is under the protection of the state laws, it ceases to be an import and becomes a part of the general mass of property within the state and as such is subject to the state's taxing power.

"Where property has come to rest within a State, being held there at the pleasure of the owner, for disposal or use, so that he may dispose of it either within the State, or for shipment elsewhere, as his interest dictates, it is deemed to be a part of the general mass of property within the State and is thus subject to its taxing power." Minnesota v. Blasius, 290 U.S. 1,78 L.Ed. 131, 54 S.Ct. 34.

Without quoting from other decisions, I cite the following as authority for the view I have endeavored to express: Baldwin v.Seelig, 294 U.S. 511, 79 L.Ed. 1032, 55 S.Ct. 497, 101 A.L.R. 55; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33,84 L.Ed. 565, 60 S.Ct. 388, 128 A.L.R. 876, and cases therein cited; Bloxom v. Henneford,193 Wn. 540, 76 P.2d 586.

I do not believe that in this case the tax imposed by the state in any true sense obstructs or hampers foreign commerce directly or indirectly or that it constitutes a burden in the sense in which the Federal constitution intended to prohibit, and hence I am of the view that the property is subject to state taxation.

BLAKE, ROBINSON, and MALLERY, JJ., concur with STEINERT, J.