Armour & Co. v. Virginia

Background

Armour & Company, a New Jersey packing-house corporation, sold packing-house products through agencies in Virginia. Virginia’s 1915 law (§45) required merchants to pay an annual license tax based on purchases, and it treated goods manufactured by the merchant and sold in the State as purchases. The statute carved out an exemption for manufacturers who are taxed on capital and who sell at their place of manufacture. Virginia required Armour to report purchases that included goods it shipped into Virginia for sale; Armour sued, arguing the law unfairly burdened interstate commerce and violated other constitutional protections. A trial court enjoined enforcement, the state court reversed, and the Supreme Court heard the case.

Reasoning

The Court said the relevant distinction—between a manufacturer selling at its factory and a merchant selling goods at a separate place of business—is obvious and acceptable. The Court found no unacceptable discrimination in the law as properly read. It held that taxing merchants on purchases that include goods shipped into the State does not itself create a direct burden on interstate commerce. Any disadvantage to merchants who ship goods in is an indirect result of lawful state classifications, not an unconstitutional restriction. For the same reasons, the Court rejected challenges under the national privileges-and-immunities idea and under the Fourteenth Amendment’s protections.

Real world impact

The ruling lets Virginia enforce its merchant-license tax as construed. Merchants who sell goods in Virginia must count purchases, including out-of-state-made goods, for the tax. Manufacturers who sell only at their factory and are taxed on capital may claim the statutory exemption. The decision affirms the lower court’s reversal and upholds the statute.