Philadelphia & Southern Mail Steamship Co. v. Commonwealth

Chief Justice Mercur delivered the opinion of the court, October 1st 1883. The plaintiff in error is a corporation of this state. Its principal place of business is in Philadelphia. It is a transportation company. It owns sea-going steamships which it employs in the coasting trade between the port of Philadelphia and the ports of cities in other states and in other countries. The voyages are made on the navigable waters of the United States and on the ocean. Its vessels are enrolled and registered under the navigation laws of the United States. Its gross receipts were received for the transportation of freight and passengers between the different ports named. The tax in question was imposed on gross receipts under the Acts of 20th March 1877, and of 7th June 1879. It was urged that the Acts imposing taxation do not apply to a corpoi’ation of the class of the plaintiff in error. Wo think this position clearly untenable. Whether it be a steamship company or a steamboat company is wholly unimportant. It is clearly a transportation company engaged in the business of transporting both freight and passengers. It is thus brought clearly within the letter of the statute imposing the taxes. It is further contended that if the Acts are held to apply to this corporation, they are in conflict with that clause of the Constitution of the United States which confers upon Congress the power “ to regulate commerce with foreign nations, and among the several states.” If a tax on gross receipts were the same as a tax on tonnage, there would be force in this position. The laying of a tax on tonnage is an attempt to regulate commerce. It bears directly on the owners of the goods who are having them transported. A tax on gross receipts is a tax on the money of the carrier after it has reached the treasury of the corporation. The fact that it may have been derived from transportation of freight between states or between the home port and a foreign port, matters not. It has, nevertheless, become subject to legitimate taxation. The statute does not [116] look beyond the corporation to those whose business have furnished the money which passed into its treasury. It looks no further than to determine whether the business of the corporation brings it within the statute for purposes of taxation. Whenever the fruits of the transportation have become mingled with its general property in the treasury, then the fund is subject to taxation by state authority : The Tax on Gross Receipts, 15 Wall. 284; Osborne v. Mobile, 16 Id. 481. A tax on gross receipts is in the nature of a tax on the franchise. It is solely by the exercise of the franchise granted by the Commonwealth that the corporation obtains the money on which this tax is imposed. It matters not where the money is gathered. The corporation obtained all its powers here. Its principal office is here. The Commonwealth which breathed into this corporation the breath of life, has power to impose taxes on the product of its own creation’: Insurance Company of North Amerca v. Commonwealth, 6 Norris 173; Commonwealth v. Gloucester Ferry Co., 2 Out. 105. We do not deem it necessary to refer to, and answer seriatim, the numerous cases cited by the plaintiff in error. We do not think they controvert the cases we have cited and the reason on which they rest. The learned judge arrived at a conclusion with which we are entirely satisfied. Judgment affirmed. Green, J., dissented.