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LOW V. AUSTIN, 80 U. S. 29 (1871)

U.S. Supreme Court

Low v. Austin, 80 U.S. 13 Wall. 29 29 (1871)

Low v. Austin

80 U.S. (13 Wall.) 29


1. Goods imported from a foreign country, upon which the duties and charges at the custom house have been paid are not subject to state taxation whilst remaining in the original cases, unbroken and unsold, in the hands of the importer, whether the tax be imposed upon the goods as imports or upon the goods as part of the general property of the citizens of the state which is subjected to an ad valorem tax.

2. Goods imported do not lose their character as imports and become incorporated into the mass of property of the state until they have passed from the control of the importer, or been broken up by him from their original cases.

The statutes of California in force in 1868 provided that "all property of every kind, name, and nature whatsoever within the state" (with certain exceptions) should be subject to taxation according to its value. In 1868, and for several years before and at the time of commencing this action, Low and others were importing, shipping, and commission merchants in the City of San Francisco, California. In 1868, they received on consignment from parties in France certain champagne wines upon which they paid the duties and charges of the custom house. They then stored the wines in their warehouse in San Francisco in the original cases in which the wines were imported, where they remained for sale. Whilst in this condition, they were assessed as the property of the said Low and others for state, city, and county taxes under the general revenue law of California above mentioned. Low and the others refused to

Page 80 U. S. 30

pay the tax, asserting that it was levied in contravention of that provision [Footnote 1] of the Constitution, which ordained that

"No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports"


Upon the refusal, one Austin, at the time collector of taxes for the City and County of San Francisco, levied upon the cases of wine thus stored for the amount of the tax assessed, and was about to sell them when Low and the others paid the amount and the charges incurred under protest. They then brought the present action in one of the district courts of the state to recover back the money paid, there arguing that the illegality of the tax was settled by the case of Brown v. State of Maryland, [Footnote 2] in which this Court declared an act of the State of Maryland requiring all persons who should sell imported goods by wholesale, bale, or package to take out a license from the state, for which they were required to pay $50, to be in conflict with the provision of the Constitution of the United States above quoted -- this Court there holding that the license was a tax upon the articles imported, that it intercepted the goods before they had become mingled with the mass of the property of the state, and therefore that it was a tax upon the goods as imports, and consequently within the constitutional inhibition.

The district court gave judgment for the plaintiffs, holding that the law under which the tax was levied was void.

The collector, Austin, now took the case to the Supreme Court of California. The view of that court did not coincide with the view of the district court. Referring to the case of Brown v. State of Maryland, above quoted and relied on by the importers to show the illegality of the tax, the Supreme Court of California said:

"It is contended that the property taxed in this case had not become incorporated with the mass of the general wealth of the

Page 80 U. S. 31

state, simply because it was still the property of the importer, in the original packages in which it was imported."

"We see nothing in this which even tends to show that the property had not become incorporated with the general wealth of the state. We see no reason why imported goods exposed in the store of a merchant for sale do not constitute a portion of the wealth of the state, as much as domestic goods similarly situated. Nor do we see the slightest difference whether the importer is also the merchant who sells or whether the goods are in the original packages or not. In either case, the goods are exposed for sale in the markets for the profit which may be realized from selling. They may be equally the basis of credit, and alike they require and receive the benefit of the police laws of the state, and upon every principle of equality should contribute to pay for their protection. Possibly the plaintiff, who is a commission merchant, has in his store champagne wines manufactured in Sonoma or Los Angeles, which he is offering to sell in the same market, in precisely similar packages. In what possible sense can one be said to constitute a portion of the wealth of the state in which the other does not? The object of the constitutional restriction is said to be to prevent the state from imposing a tax upon commerce to discriminate against foreign goods. It certainly cannot be intended to discriminate against domestic productions by exempting foreign goods from its share of the cost of protecting it."

"A tax which is imposed alike upon all the property of the state cannot in any sense be considered a tax upon commerce. It has no tendency to discourage importations. Exemption from the tax might encourage importations, but certainly it was not the purpose of the restriction to compel the state to offer a bounty to foreign produce over domestic. The tax prohibited must be a tax upon the character of the goods as importations, rather than upon the goods themselves as property."

The Supreme Court of California accordingly reversed the decree of the district court, and to that decree of reversal the present writ was taken.

Page 80 U. S. 32

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