Michelin Tire Corp. v. Wages

Background

A New York tire importer and wholesale distributor stored automobile and truck tires and tubes from France and Nova Scotia in a Georgia distribution warehouse. Local tax officials assessed annual ad valorem property taxes on that inventory. The importer sued, and Georgia courts held tubes in original cartons exempt but said the tires had lost import status and could be taxed. The Supreme Court reviewed whether a nondiscriminatory property tax on imported goods violates the Constitution’s ban on state imposts or duties.

Reasoning

The Court asked whether a uniform ad valorem property tax on imported goods in local inventory is the kind of “impost” the Constitution forbids. It held that such nondiscriminatory property taxes are not the kind of tariffs or transit fees the Framers meant to forbid. The opinion explains that the historic danger addressed by the Import-Export Clause was discriminatory or transit-based charges by port States, not routine local property taxes that fund services like police or fire protection. The Court concluded that Low v. Austin had misread Brown v. Maryland and overruled Low to the extent it barred these uniform property taxes.

Real world impact

The ruling affirms that states and localities can levy ordinary, nondiscriminatory property taxes on imported goods held in local warehouses. Importers who keep inventory in state distribution centers may face regular local tax assessments. The decision shifts disputes about import taxation toward whether taxes discriminate or function like transit imposts, not toward a blanket immunity for goods still owned by importers.

Dissents or concurrances

Justice White concurred in the judgment but said he would affirm on the ground that the tires had ceased to be imports and declined to join overruling Low v. Austin because the parties had not argued that issue.