Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292 (1944)

Author: Justice Frankfurter

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Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292 (1944)

MR. JUSTICE FRANKFURTER announced the conclusion and judgment of the Court.

The question before us is whether the Commerce Clause or the Due Process Clause of the Fourteenth Amendment bars the State of Minnesota from enforcing the personal property tax it has laid on the entire fleet of airplanes owned by the petitioner and operated by it in interstate transportation. The answer involves the application of settled legal principles to the precise circumstances of this case. To these, about which there is no dispute, we turn.

Northwest Airlines is a Minnesota corporation, and its principal place of business is St. Paul. It is a commercial airline carrying persons, property, and mail on regular fixed routes, with due allowance for weather, predominantly within the territory comprising Illinois, Minnesota, North Dakota, Montana, Oregon, Wisconsin, and Washington. For all the planes, St. Paul is the home port registered with the Civil Aeronautics Authority, under whose certificate of convenience and necessity Northwest operates. At six of its scheduled cities, Northwest operates maintenance bases, but the work of rebuilding and overhauling the planes is done in St. Paul. Details as to stopovers, other runs, the location of flying crew bases, and of the usual facilities for aircraft have no bearing on our problem.

The tax in controversy is for the year 1939. All of Northwest’s planes were in Minnesota from time to time during that year. All were, however, continuously engaged in flying from State to State, except when laid up for repairs and overhauling for unidentified periods. On May 1, 1939, the time fixed by Minnesota for assessing personal property subject to its tax (Minn.Stat. 1941, § 273.01), Northwest’s scheduled route mileage in Minnesota was 14% of its total scheduled route mileage, and the scheduled plane mileage was 16% of that scheduled. It based its personal property tax return for 1939 on the number of planes in Minnesota on May 1, 1939. Thereupon, the appropriate taxing authority of Minnesota assessed a tax against Northwest on the basis of the entire fleet coming into Minnesota. For that additional assessment, this suit was brought. The Supreme Court of Minnesota, with three judges dissenting, affirmed the judgment of a lower court in favor of the State. 213 Minn. 395, 7 N.W.2d 691. A new phase of an old problem led us to bring the case here. 319 U.S. 734.

The tax here assessed by Minnesota is a tax assessed upon "all personal property of persons residing therein, including the property of corporations. . . ." Minn.Stat. 1941, § 272.01. It is not a charge laid for engaging in interstate commerce or upon airlines specifically; it is not aimed by indirection against interstate commerce, or measured by such commerce. Nor is the tax assessed against planes which were "continuously without the State during the whole tax year," New York Central & H. R. Co. v. Miller, 202 U.S. 584, 594, and had thereby acquired "a permanent location elsewhere," Southern Pacific Co. v. Kentucky, 222 U.S. 63, 68, and see Cream of Wheat Co. v. Grand Forks County, 253 U.S. 325, 328-330.

Minnesota is here taxing a corporation for all its property within the State during the tax year, no part of which receives permanent protection from any other State. The benefits given to Northwest by Minnesota, and for which Minnesota taxes -- its corporate facilities and the governmental resources which Northwest enjoys in the conduct of its business in Minnesota -- are concretely symbolized by the fact that Northwest’s principal place of business is in St. Paul, and that St. Paul is the "home port" of all its planes. The relation between Northwest and Minnesota -- a relation existing between no other State and Northwest -- and the benefits which this relation affords are the constitutional foundation for the taxing power which Minnesota has asserted. See State Tax Com. v. Aldrich, 316 U.S. 174, 180. No other State can claim to tax as the the legal domicile, as well as the home State of the fleet, as a business fact. No other State is the State which gave Northwest the power to be, as well as the power to function as Northwest functions in Minnesota; no other State could impose a tax that derives from the significant legal relation of creator and creature, and the practical consequences of that relation in this case. On the basis of rights which Minnesota alone originated and Minnesota continues to safeguard, she alone can tax the personalty which is permanently attributable to Minnesota, and to no other State. It is too late to suggest that this taxing power of a State is less because the tax may be reflected in the cost of transportation. See Delaware Railroad Tax, 18 Wall. 206, 232.

Such being the case, it is clearly ruled by New York Central & H. R. Co. v. Miller, supra. Here, as in that case, a corporation is taxed for all its property within the State during the tax year, none of which was "continuously without the State during the whole tax year." Therefore, the doctrine of Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194, does not come into play. The fact that Northwest paid personal property taxes for the year 1939 upon "some proportion of its full value" of its airplane fleet in some other States does not abridge the power of taxation of Minnesota as the home the fleet in the circumstances of the present case. The taxability of any part of this fleet by any other State than Minnesota, in view of the taxability of the entire fleet by that State, is not now before us. It was not shown in the Miller case, and it is not shown here, that a defined part of the domiciliary corpus has acquired a permanent location, i.e., a taxing situs, elsewhere.{1} That was the decisive feature of the Miller case, and it was deemed decisive as late as 1933 in Johnson Refining Oil Co. v. Oklahoma, 290 U.S. 158, which was strongly pressed upon us by Northwest. In that case, it was not the home State, Illinois, but a foreign State, Oklahoma, which was seeking to tax a whole fleet of tank cars used by the oil company. That case fell outside of the decision of the Miller case, and ours falls precisely within it. "Appellant had its domicile in Illinois," as Mr. Chief Justice Hughes pointed out, "and that State had jurisdiction to tax appellant’s personal property which had not acquired an actual situs elsewhere." 290 U.S. at 161.{2} This constitutional basis for what Minnesota did reflects practicalities in the relations between the States and air transportation. "It has been customary to tax operating airplanes at their overhaul base." Thompson, State and Local Taxation Affecting Air Transportation (1933) 4 J.Air L. 479, 483.

The doctrine of tax apportionment for instrumentalities engaged in interstate commerce introduced by Pullman’s Palace-Car Co. v. Pennsylvania, 141 U.S. 18, is here inapplicable. The principle of that case is that a nondomiciliary State may tax an interstate carrier

engaged in running railroad cars into, through, and out of the State, and having at all times a large number of cars within the State . . . by taking as the basis of assessment such proportion of its capital stock as the number of miles of railroad over which its cars are run within the State bears to the whole number of miles in all the States over which its cars are run.

Union Refrigerator Transit Co. v. Kentucky, supra, at 206. This principle was successively extended to the old means of transportation and communication, such as express companies and telegraph systems. But the doctrine of apportionment has neither in theory nor in practice been applied to tax units of interstate commerce visiting for fractional periods of the taxing year. (Thus, for instance, "The coaches of the company . . . are daily passing from one end of the State to the other," in Pullman’s Palace-Car Co. v. Pennsylvania, supra, at 20, citing the opinion of the court below in 107 Pa. 156, 160.) The continuous protection by a State other than the domiciliary State -- that is, protection throughout the tax year -- has furnished the constitutional basis for tax apportionment in these interstate commerce situations, and it is on that basis that the tax laws have been framed and administered.

The taxing power of the domiciliary State has a very different basis. It has power to tax because it is the domicile, and no other State is. For reasons within its own sphere of choice, Congress at one time chartered interstate carriers, and at other times has left the chartering and all that goes with it to the States. That is a practical fact of legislative choice, and a practical fact from which legal significance has always followed. That far-reaching fact was recognized, as a matter of course, by Mr. Justice Bradley in his dissent in the Pullman’s Palace-Car Co. case, supra, 141 U.S. at 32. Congress, of course, could exert its controlling authority over commerce by appropriate regulation, and exclude a domiciliary State from authority which it otherwise would have because it is the domiciliary State. But no judicial restriction has been applied against the domiciliary State except when property (or a portion of fungible units) is permanently situated in a State other than the domiciliary State.{3} And permanently means continuously throughout the year, not a fraction thereof, whether days or weeks.

Such was the unanimous decision in the Miller case, or the Miller case decided nothing. The present case is precisely the case which Mr. Justice Holmes assumed the Miller case to be. By substituting Minnesota for New York, we have inescapably the facts of the present case;

Suppose, then, that the State of Minnesota had taxed the property directly; there was nothing to hinder its taxing the whole of it. It is true that it has been decided that property, even of a domestic corporation, cannot be taxed if it is permanently out of the State. . . . But it has not been decided, and it could not be decided, that a State may not tax its own corporations for all their property within the State during the tax year, even if every item of that property should be taken successively into another State for a day, a week, or six months, and then brought back. Using the language of domicil, which now so frequently is applied to inanimate things, the State of origin remains the permanent situs of the property, notwithstanding its occasional excursions to foreign parts.

N.Y. Central & H. R.R. Co. v. Miller, supra, at 596-597.{4} Surely the power of the origin to "tax its own corporations for all their property within the State during the tax year" cannot constitutionally be affected whether the property takes fixed trips or indeterminate trips, so long as the property is not "continuously without the State during the whole tax year," N.Y. Central & H. R.R. Co. v. Miller, supra, at 594, even when, as in the Miller case, from 12% to 64% of the property was shown to have been used outside of New York during the tax year, but in no one visited State permanently -- that is, for the whole year. And that is the decisive constitutional fact about the Miller case that, although from 12% to 64% of the rolling stock of the railroad was outside of New York throughout the tax year, New York was nevertheless allowed to tax it all because no part was in any other State throughout the year.

To introduce a new doctrine of tax apportionment as a limitation upon the hitherto established taxing power of the home State is not merely to indulge in constitutional innovation. It is to introduce practical dislocation into the established taxing systems of the States. The doctrine of tax apportionment has been painfully evolved in working out the financial relations between the States and interstate transportation and communication conducted on land, and thereby forming a part of the organic life of these States. Although a part of the taxing systems of this country, the rule of apportionment is beset with friction, waste, and difficulties, but, at all events, it grew out of, and has established itself in regard to, land commerce.{5} To what extent it should be carried over to the totally new problems presented by the very different modes of transportation and communication that the airplane and the radio have already introduced, let alone the still more subtle and complicated technological facilities that are on the horizon, raises questions that we ought not to anticipate; certainly we ought not to embarrass the future by judicial answers which, at best, can deal only in a truncated way with problems sufficiently difficult even for legislative statesmanship.

The doctrine in the Miller case, which we here apply, does not subject property permanently located outside of the domiciliary State to double taxation. But not to subject property that has no locality other than the its owner’s domicile to taxation there would free such floating property from taxation everywhere. And what the Miller case decided is that neither the Commerce Clause nor the Fourteenth Amendment affords such constitutional immunity.

Each new means of interstate transportation and communication has engendered controversy regarding the taxing powers of the States inter sese, and as between the States and the Federal Government. Such controversies and some conflict and confusion are inevitable under a federal system. They have long been the source of difficulty and dissatisfaction for us, see J. B. Moore, Taxation of Movables and the Fourteenth Amendment (1907) 7 Col.L.Rev. 309; Groves, Intergovernmental Fiscal Relations, Proceedings Thirty-fifth Annual Conference, National Tax Association, p. 105, and have equally plagued the British federal systems, see Report of the [Australian] Royal Commission on the Constitution, (1929) c, XII (p. 127), c. XIX (p. 187), c. XXIII (at p. 259); Report of the [Canadian] Royal Commission on Dominion-Provincial Relations, (1940) Bk. I, c. VIII, Bk. II, § B, c, III. In response to arguments addressed also to us about the dangers of harassing State taxation affecting national transportation, the concurring judge below adverts to the power of Congress to incorporate airlines and to control their taxation. But, insofar as these are matters that go beyond the constitutional issues which dispose of this case, they are not our concern.


1. In the Miller case, the New York Central Railroad introduced evidence that, during the taxable years in question, a proportion of its cars, ranging from about 12% to 64%, was used outside of New York. This figure was arrived at by using the ratio between Central’s mileage outside of New York and its total mileage. The comptroller nevertheless ruled that all of Central’s cars were taxable in New York, the domicile. On review of this ruling as applied in the first tax year involved, the New York Court of Appeals remitted the proceedings to the comptroller to determine whether any of the rolling stock was used exclusively out of the State. 173 N.Y. 255, 65 N.E. 1102. No such evidence was introduced for any tax year, although there was evidence to show "that a certain proportion of cars, although not the same cars, was continuously without the State during the whole tax year." 202 U.S. 584, 594. The comptroller made no reduction in the tax, and this action was affirmed by the Appellate Division (89 App.Div. 127, 84 N.Y.S. 1088), the Court of Appeals (177 N.Y. 584, 69 N.E. 1129), and on review here.

2. In the Johnson Oil Refining Co. case, supra, this Court reaffirmed not less than three times that the domicile has jurisdiction to tax the personal property of its corporation unless such property has acquired an "actual situs" in another State. And, by "actual situs," it meant, as its references to Union Refrigerator Transit Co. v. Kentucky, supra, and the Miller case indicate, what those cases required for "actual situs" before the constitutional power of the domiciliary State to tax could be curtailed -- namely continuous presence in another State which thereby supplants the home State and acquires the taxing power over personalty that has become a permanent part of the foreign State. Surely the situs which personal property may acquire for tax purposes in a State other than that of the owner’s domicile cannot be made to depend on some undefined concept of "permanence" short of a tax year, leaving the adequate size of the fraction of the tax year for judicial determination in each year. Such a doctrine would play havoc with the tax laws of the forty-eight States. It would multiply manifold the recognized difficulties of ascertaining the domicile of individuals. See Texas v. Florida, 306 U.S. 398; District of Columbia v. Murphy, 314 U.S. 441.

3. In the most recent apportionment case to come before this Court, Nashville, C. & St.L. Ry. v. Browning, 310 U.S. 362, we merely sustained the application by the Tennessee Railroad Commission and the Tennessee Supreme Court of a "familiar and frequently sanctioned formula" for apportionment on a mileage basis against the claim of the inapplicability of this formula in the circumstances of that case because of the disparity in the revenue-producing capacity between the lines in and out of Tennessee. Mathematical exactitude in making the apportionment has never been a constitutional requirement. That is the essence of the Browning holding. No suggestion can be found at any stage of that litigation in any wise touching the present problem -- namely, whether the domiciliary State is constitutionally limited in taxing all the movables that come within it except by the Union Transit doctrine -- that a proportion which had, during the entire tax year, been within another State cannot be taxed in the domiciliary State.

4. In speaking of "occasional excursions to foreign parts" and "random excursions" (202 U.S. at 597), Mr. Justice Holmes merely put colloquially the legally significant fact that neither any specific cars nor any average of cars was so continuously in any other State as to have been withdrawn from the home State and to have established for tax purposes an adopted home State.

5. And that the constitutional power of the domiciliary State to tax vessels is precisely the same as its power to tax rolling stock is conclusively shown by the Court’s reliance in the Miller case on a case decided a week before -- namely, Ayer & Lord Tie Co. v. Kentucky, 202 U.S. 409.


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Chicago: Frankfurter, "Frankfurter, J., Lead Opinion," Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292 (1944) in 322 U.S. 292 322 U.S. 293–322 U.S. 301. Original Sources, accessed January 31, 2023,

MLA: Frankfurter. "Frankfurter, J., Lead Opinion." Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292 (1944), in 322 U.S. 292, pp. 322 U.S. 293–322 U.S. 301. Original Sources. 31 Jan. 2023.

Harvard: Frankfurter, 'Frankfurter, J., Lead Opinion' in Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292 (1944). cited in 1944, 322 U.S. 292, pp.322 U.S. 293–322 U.S. 301. Original Sources, retrieved 31 January 2023, from