Cook v. Marshall County

Background

A retail cigar and tobacco shopkeeper in Iowa bought cigarettes from a manufacturer in St. Louis. The cigarettes arrived in small sealed pasteboard boxes holding ten cigarettes each, delivered loose by an express company to the retailer’s store. Iowa law (section 5007) imposed a $300 yearly tax on places where cigarettes are sold or kept for sale, but excluded sales by jobbers and wholesalers doing interstate business with customers outside the State. The retailer challenged the law on two grounds: that interstate commerce rules protected the imported packages, and that the law treated sellers unfairly.

Reasoning

The Court asked whether the tiny sealed packets were “original packages” that state law could not touch. Relying on prior decisions, the Court said an original-package rule only protects goods when the shipment is a bona fide interstate transaction in the ordinary form used by shippers. The Court found these small boxes were used as a subterfuge to evade state law, so they were not protected. The Court also held the statute’s exemption for wholesalers selling to out-of-state customers was a permissible classification for taxation and did not violate equal treatment principles.

Real world impact

The ruling allows Iowa to enforce the $300 tax against retail shops that sell or keep cigarettes in the described manner. Retail tobacco sellers who import many small stamped packets cannot rely on an “original package” immunity where the shipment appears designed to evade state rules. Wholesalers genuinely doing interstate business remain excluded under the statute.

Dissents or concurrances

One Justice wrote separately to note the factual similarity to a prior case, and three Justices dissented from the judgment.