Kansas City, F.S. & Memphis Ry. Co. v. Botkin, 240 U.S. 227 (1916)

Please note: this case begins in mid-page. It therefore shares a citation with the last page of the previous case. If you are attempting to follow a link to the last page of 240 U.S. 214, click here.

Kansas City, Fort Scott & Memphis Railway Company v. Botkin

No. 450

Submitted January 7, 1916
Decided February 21, 1916
240 U.S. 227

ERROR TO THE SUPREME COURT

OF THE STATE OF KANSAS

Syllabus

The state cannot lay a tax on interstate commerce in any form by imposing it either upon business constituting such commerce or on the privilege of engaging in it, or upon the receipts as such derived therefrom.

Whether a state tax has such a direct relation to interstate commerce as to be an exercise of power prohibited by the commerce clause depends upon the operation and effect of the tax as enforced, and not upon the manner in which the taxing scheme has been characterized.

The state has authority to tax a domestic corporation for the privilege of being a corporation, and such a tax is not necessarily invalid because measured by the capital stock, part of which may represent capital not subject to the taxing power of the state.

A state is not debarred from imposing a tax upon the granted privilege of being a corporation, because the corporation may be engaged in interstate commerce.

The validity of each tax must be decided upon its own facts, and a tax within the taxing power of the state will not be condemned as repugnant to the federal Constitution unless its natural operation and effect render it a prohibited exaction.

The tax imposed by Chapter 135, Kansas Laws of 1913, on the privilege of being a corporation is not laid upon interstate commerce or receipts therefrom or fluctuating with the volume of interstate business, but is simply graduated according to paid up capital, with a reasonable maximum, and it is not, as to a domestic corporation engaged in both interstate and intrastate commerce, invalid either as a violation of the commerce clause as taxing interstate commerce or of the due process clause of the Fourteenth Amendment as taxing property beyond the jurisdiction of the state.

95 Kan. 261 affirmed.

The facts, which involve the constitutionality under the commerce and due process clauses of the federal Constitution and the construction of the statute of Kansas of 1913 imposing annual taxes on corporations, are stated in the opinion.