Heyman v. Hays

Background

A wholesale liquor firm that kept a stock of alcohol in Tennessee stopped selling inside the State and ran a mail-order business instead. The firm solicited and received orders from buyers in other States, filled those orders by delivering the goods to a carrier in Tennessee for through shipment out of State, and paid a county privilege tax on its wholesale business. The firm sued in 1912 to recover a tax paid and to stop collection of another tax, arguing the mail-order business was interstate commerce and could not be taxed by the State or county.

Reasoning

The central question was whether Tennessee (and its county) could impose a privilege tax on a business that took mail orders from other States and shipped the goods out of State. The Court said the in‑State acts described—keeping stock in a warehouse, packing goods, hiring clerical workers, and delivering to a carrier—were merely accessory to interstate shipments. Allowing those facts to justify a tax would let the State directly burden interstate commerce. The Court reversed the state court’s decision upholding the tax and protected the mail-order business from that local tax.

Real world impact

The ruling bars State and local authorities from using in‑State storage, packing, or clerical work as a basis to tax businesses that only sell by mail and ship products out of State. It reinforces that the right to engage in interstate commerce cannot be directly burdened by privilege taxes tied to ordinary steps needed to ship goods between States.