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defendantattorneyregulation

defendantattorneyappellant

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Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643, 67 L.Ed. 1095

Facts

Sonneborn Bros. is a New York-based firm that opened an office in Dallas, Texas, in January 1910. They sold petroleum products, with total sales receipts amounting to $860,801.50 from January 1910 to April 1919. The sales included oil that was not in Texas at the time of sale, oil to be delivered out of state, and oil sold from their Texas warehouse. The tax in question was on oil sold from unbroken packages after arriving in Texas, amounting to $4,674.58.

Sonneborn Bros. is a firm of nonresident merchants selling petroleum products, with its principal place of business in New York City.

Issue

The main issue is whether the occupation tax imposed by Texas on oil sold from unbroken packages in the state constitutes a regulation of or a burden upon interstate commerce.

The question we have to decide is whether oil transported by appellants from New York or elsewhere outside of Texas to their warerooms or warehouse in Texas, there held for sales in Texas in original packages of transportation, and subsequently sold and delivered in Texas in such original packages, may be made the basis of an occupation tax upon appellants, when the state tax applies to all wholesale dealers in oil engaged in making sales and delivery in Texas.

Rule

The court applied the principle that a state tax on merchandise brought in from another state or upon its sales is lawful only when the tax does not discriminate against the merchandise because of its origin.

A state tax upon merchandise brought in from another state or upon its sales, whether in original packages or not, after it has reached its destination and is in a state of rest, is lawful only when the tax is not discriminating in its incidence against the merchandise because of its origin in another state.

Analysis

The court determined that the oil had reached a state of rest in the warehouse and was part of Sonneborn Bros.' stock for business as wholesale dealers in Texas. The tax applied equally to all wholesale dealers in oil, regardless of the origin of the oil, and thus did not constitute a burden on interstate commerce. The court referenced previous cases that established the validity of such taxes when they do not discriminate against interstate commerce.

The oil had come to a state of rest in the warehouse of the appellants, and had become a part of their stock, with which they proposed to do business as wholesale dealers in the state.

Conclusion

The Supreme Court affirmed the decree of the District Court, ruling that the Texas occupation tax on oil sold from unbroken packages was valid and did not violate the Constitution.

The decree of the District Court is Affirmed.

Who won?

The defendants, represented by the Attorney General of Texas, prevailed because the court found that the tax did not impose a burden on interstate commerce and was applied uniformly to all dealers.

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