Detroit International Bridge Co. v. Corporation Tax Appeal Board

Background

A Michigan corporation owns and operates the Ambassador Bridge across the Detroit River to Sandwich, Ontario. The company collects tolls from vehicles and pedestrians but does not itself carry people or goods across the border. Michigan demanded payment of a 1933 corporate "privilege" tax based on paid-up capital and surplus under a state statute that excludes property located outside the state or property used exclusively in interstate or foreign commerce. The state courts sustained the tax. Earlier the Court had affirmed a similar tax for 1930 when the company had broader powers; afterward the corporate charter was narrowed to bridge operation.

Reasoning

The central question was whether owning and operating the bridge and collecting tolls counts as foreign commerce that the Constitution protects from state taxation. The Court relied on prior precedent holding that a bridge company does not itself conduct interstate commerce and noted the business using the bridge conducts the commerce. The Court found no adequate reason to depart from that view and concluded the company’s ownership and toll collection did not make it a foreign-commerce actor, so the state tax could stand. The judgment below was therefore affirmed.

Real world impact

The ruling lets Michigan enforce the challenged 1933 corporate privilege tax against the bridge company. It means the bridge’s capital and toll operations are not automatically excluded from tax calculations as property used exclusively in foreign commerce. Owners of similar bridge enterprises face the risk of state taxation under comparable statutes. The decision follows existing precedent, not a broad new rule.

Dissents or concurrances

Justices Stone and Cardozo joined in the result by concurrence.