Crenshaw v. Arkansas
Headline: Arkansas law requiring $200 peddler licenses and fines is struck down, as the Court reversed convictions and barred state taxation of traveling salesmen taking orders for out-of-state goods, protecting interstate sales.
Holding: The judgments of the Supreme Court of Arkansas are reversed and the cases remanded.
- Prevents states from taxing sellers who take orders fulfilled by shipments from another State.
- Protects out-of-state manufacturers’ traveling agents from local peddler license fees.
- Allows states to regulate only sellers who carry and sell goods they have with them.
Summary
Background
A Missouri company manufactured steel ranges in St. Louis and sold them through traveling salesmen and separate delivery employees in several Arkansas counties. Salesmen carried sample ranges and solicited orders; buyers signed notes that were forwarded to the company for credit checks. Approved orders were filled by shipping full ranges in carloads from St. Louis to Arkansas, consigned to the company’s local superintendent, then unloaded and delivered by company delivery men in the same packages received from the carrier. Salesmen did not sell the sample ranges or make deliveries, and delivery men did not solicit orders.
Reasoning
The Court considered whether a state law requiring a license and fee for anyone who traveled and sold or took orders for certain goods placed a direct burden on interstate commerce. Citing prior decisions, the Court explained that taking orders in one State for goods manufactured and shipped from another State is interstate commerce and cannot be directly taxed by a State. The opinion distinguished true local peddlers—who sell and deliver the goods they carry—from agents who merely solicit orders to be filled by shipments, and concluded the Arkansas law targeted the latter.
Real world impact
The Court reversed the convictions and held that the licensing requirement could not be applied to these sales practices. Manufacturers and their traveling agents who solicit orders in other States and have goods shipped in to fill those orders are protected from this kind of state license tax. States may still regulate and tax sellers who physically carry and sell their own goods in-state, but not interstate order-taking.
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