Surplus Trading Co. v. Cook
Headline: Court blocks state tax on surplus blankets held inside a federal military base, ruling property on land bought by the United States with state consent is exempt from state taxation for that assessment date.
Holding: The Court held that property physically located on land purchased by the United States with the state’s consent for a military reservation is under exclusive federal jurisdiction and cannot be taxed by the State for that assessment date.
- Stops state taxes on private property located within federal military reservations purchased with state consent.
- Leaves taxability of property stored in private warehouses to state law.
- Requires local tax officials to identify which goods were on federal land on assessment dates.
Summary
Background
This case was brought by the sheriff and tax collector of Pulaski County, Arkansas, seeking to collect 1922 and 1923 personal property taxes from the Surplus Trading Company. The company had purchased a large lot of woolen blankets from the United States at sale. Much of the blankets were stored in U.S. army storehouses at Camp Pike; 64,371 remained at Camp Pike while 21,235 were in a private Little Rock warehouse. A state chancery court ruled for the company; the Arkansas Supreme Court affirmed as to 1923 but ordered collection for 1922.
Reasoning
The core question was whether Arkansas could tax property that was on land bought by the United States with the State’s consent for a military reservation. The Court explained that the Constitution gives Congress power to exercise exclusive authority over places purchased for forts, arsenals, and similar uses, which means the State’s jurisdiction is displaced. Citing earlier cases, the Court held that the state’s tax law could not be applied to blankets that were physically inside Camp Pike on May 1, 1922, the date fixed for listing property for assessment.
Real world impact
The Court reversed the Arkansas Supreme Court’s judgment and limited its ruling to the blankets actually inside Camp Pike on the assessment date. Blankets stored in the private Little Rock warehouse may still be taxable, and the Court left questions about dividing the assessment between locations for state courts to decide. The decision requires local tax officials and businesses to distinguish goods on federal reservations from goods elsewhere when applying state tax rules.
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