C. W. Cornell v. F. E. Coyne

Background

A group of manufacturers made “filled cheese” under contracts to supply buyers in Liverpool and London. After making the cheese and preparing it for immediate shipment, the manufacturers were charged one cent per pound by the federal collector under an 1896 law. The manufacturers argued the tax was barred by the Constitution’s ban on taxes on articles exported from a State and that the statute, or earlier laws, should exempt exports.

Reasoning

The Court examined the statute’s text and earlier laws and concluded section 9 plainly imposed a one-cent manufacturing tax on all filled cheese, paid by the maker. The majority said the constitutional export clause prevents taxes on exportation itself but does not free goods from ordinary manufacturing taxes assessed before export. The Court rejected arguments that the statute’s title or references to existing stamp laws incorporated a clear exemption like the one for exported tobacco, and it said any doubtful grant of privilege must be read against the claimant and for the government. The Circuit Court’s judgment was therefore affirmed.

Real world impact

Manufacturers who make filled cheese for foreign buyers cannot automatically avoid the federal manufacturing tax, nor demand refunds, simply because the goods are exported. The decision treats the levy as a general manufacturing tax, not a prohibited duty on exportation, and leaves any statutory exemption to Congress, not the courts.

Dissents or concurrances

Justice Harlan (joined by Chief Justice Fuller) dissented, arguing that cheese manufactured and immediately prepared for export should be treated as in the process of exportation and therefore exempt from the tax.