Capitol Greyhound Lines v. Brice

Background

Two interstate bus companies challenged a Maryland law that charges a 2% “titling” tax based on a vehicle’s fair market value when a certificate of title is issued. The tax applies to both interstate and intrastate vehicles and the proceeds are used for road purposes. The carriers bought buses, refused to pay, and Maryland courts upheld the tax. The companies appealed to the Supreme Court.

Reasoning

The central question was whether the State may lawfully collect this value-based tax from carriers who cross its roads without violating the Constitution’s rule against undue state burdens on interstate trade. The Court relied on prior decisions allowing states to exact reasonable payments for the privilege of using highways so long as a tax does not formally discriminate and its proceeds fund road purposes. Because the title tax treats interstate and intrastate traffic alike, supports road work, and the carriers offered no proof that the total charge was excessive, the Court upheld the law and said carriers can still challenge specific applications if they prove excessiveness. The Court added that Congress, rather than the Court, should change the general rule if a new national standard is desired.

Real world impact

The decision means states may include a vehicle’s value in fees tied to using state roads when the tax is non-discriminatory and devoted to road purposes. Interstate carriers that can show the tax’s amount exceeds fair compensation may still obtain relief in court. The title tax also combines with mileage taxes to determine the total charge carriers pay in Maryland.

Dissents or concurrances

Mr. Justice Frankfurter dissented, arguing the tax formula bears no fair relation to road use and that the large dollar amounts could unduly burden interstate carriers; he would have reversed or remanded for further factfinding.