United States v. Goelet

Background

These cases were brought over excise duties under section 37 of the Tariff Act of 1909 on the foreign-built yacht Nahma, for the years ending September 1, 1909 and September 1, 1910. The yacht had been out of United States jurisdiction since 1901 and was said to have a permanent situs in Great Britain. The owner was a citizen of the United States who for several years before 1909 had been permanently resident and domiciled in Paris, France. The trial court had held the tax unauthorized under the statute and certified questions about the statute’s scope and constitutionality to this Court.

Reasoning

The Court examined whether the statute’s words reach a citizen permanently living abroad or a yacht used wholly outside United States territory. The opinion emphasizes that imposing taxes on citizens domiciled abroad is exceptional and that the statute contains no clear, express statement imposing such an unusual tax. The government argued that general words like “any citizen” include those abroad, and the Court considered language about the collector “nearest the residence of the managing owner,” but concluded the statute does not clearly authorize the excise in the circumstance where the yacht was used entirely outside the United States. For those reasons the Court answered the controlling question in the negative and did not decide the other certified questions.

Real world impact

The decision prevents collection of the section 37 excise for the periods in question when the yacht was used wholly outside U.S. jurisdiction. It disposes these two cases without reaching broader questions about citizens domiciled abroad.