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trial

appellant

Related Cases

Memphis Steam Laundry Cleaner v. Stone, 342 U.S. 389, 72 S.Ct. 424, 96 L.Ed. 436

Facts

Memphis Steam Laundry Cleaner, Inc. operates a laundry in Memphis, Tennessee, and sends trucks into Mississippi to solicit business. The State Tax Commission demanded a $500 tax for the privilege of soliciting business for a laundry not licensed in Mississippi. After paying the tax to avoid penalties, the laundry sued for a refund, arguing that the tax was unconstitutional under the Commerce Clause. The trial court ruled in favor of the laundry, but the Mississippi Supreme Court reversed this decision.

Appellant operates a laundry and cleaning establishment in Memphis, Tennessee. In serving the area surrounding Memphis, appellant sends ten of its trucks into eight Mississippi counties where its drivers pick up, deliver and collect for laundry and cleaning and seek to acquire new customers.

Issue

The question before us is whether a Mississippi tax laid upon the privilege of soliciting business for a laundry not licensed in that State infringes the Commerce Clause.

Rule

If the tax is imposed upon the privilege of soliciting interstate business, it stands on no better footing than a tax upon the privilege of doing interstate business and is invalid under the Commerce Clause.

If tax was imposed upon privilege of soliciting interstate business, it stood on no better footing than tax upon privilege of doing interstate business and was invalid under commerce clause.

Analysis

The court analyzed the nature of the tax and its implications on interstate commerce. It determined that the tax was effectively a burden on the solicitation of interstate business, which is protected under the Commerce Clause. The court noted that the tax could not be justified as a local activity since it discriminated against out-of-state businesses by imposing a higher tax on them compared to local competitors.

However, the opinion below may also be read as construing the statutory term ‘soliciting’ more broadly, thereby resting the tax upon appellant's activities apart from soliciting new customers in Mississippi, namely the pick up and delivery of laundry and cleaning on regular routes within the State.

Conclusion

The U.S. Supreme Court reversed the decision of the Mississippi Supreme Court, holding that the tax imposed on the privilege of soliciting interstate business was unconstitutional under the Commerce Clause.

Reversed.

Who won?

Memphis Steam Laundry Cleaner, Inc. prevailed in the case because the U.S. Supreme Court found that the tax imposed by Mississippi violated the Commerce Clause, thus invalidating the tax.

The U.S. Supreme Court held that the tax imposed on the privilege of soliciting interstate business was unconstitutional under the Commerce Clause.

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