National Cash Register Co. v. Kosydar

Per Curiam. Section 10, Clause 2 of Article T of the United States Constitution provides: “No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports * :!f This case requires us to determine whether the machines in NCR’s international inventory. which were assessed by the Tax Commissioner, were “exports” within the meaning of that clause. In answering that question, the Board of Tax Appeals applied a mechanistic, two-fold formula which it culled from phrases found in the leading “export” cases. Coe v. Errol (1886), 116 U. S. 517; A. G. Spalding & Bros. v. Edwards (1923), 262 U. S. 66; Richfield Oil Corp. v. State Board of Equalization (1946), 329 U. S. 69; Joy Oil Co. v. State Tax Commission (1949), 337 U. S. 286; Empresa Siderurgica v. County of Merced (1949), 337 U. S. 154; Hugo Neu Corp. v. County of Los Angeles (1970), 7 Cal. App. 3d 21, 86 Cal. Rptr. 332; Rice Growers’ Assn. of California v. County of Yolo (1971), 17 Cal. App. 3d 227, 94 Cal. Rptr. 847; Cargill of California v. County of Yolo (1972), 26 Cal. App. 3d 704, 103 Cal. Rptr. 257. A majority of this court, however, is of the opinion that the instant case is particularly ill-fitted for a mechanical disposition. The cases from which the two criteria for immunity from taxation were extrapolated by the board embraced products which were completely fungible or were viewed as such. In that situation, we can agree that nothing less than delivery to a carrier, marking the commencement of move171 merit in the export stream, will suffice to guarantee that the process of exportation has been irreversibly initiated. This case, on the other hand, involves cash registers, accounting machines, and electronic data processing systems which have been ordered, designed and built exclusively to serve the peculiar needs of specific foreign consumers. It is uncontradicted on the record that, in every material respect, the machines involved herein are useless in the domestic market and never find their way there. Of all the cases examined, we were unable to find any situation where the “certainty of export” has been more clearly demonstrated than in this case*; the degree of certainty here exemplified is fully equivalent to that which attends the delivery of fungible goods to a carrier for the start of a journey to a foreign destination. The decision of the Board of Tax Appeals is reversed, except as to that portion of the assessment which relates to items destined for sale in the possessions or territories of the United States. As to such latter assessment, the decision of the board is affirmed. Decision reversed in part and affirmed in part. Herbert, Corrigan, Stern, Celebrezze and W. Brown; JJ., concur. O’Neill, C. J., and P. Brown, J., dissent. Footnotes [*] Of perhaps equal certainty was the DDT in Montrose Chemical Corp. v. County of Los Angeles (1966), 243 Cal. App. 2d 300, 52 Cal. Rptr. 209 (cert. den. 386 U. S. 1004). But, see, Rice Growers’ Assn. of California v. County of Yolo (1971), 17 Cal. App. 3d 227, 94 Cal. Rptr. 847.