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CANTON RAILROAD CO. v. ROGAN ET AL.

decided: February 26, 1951.

CANTON RAILROAD CO
v.
ROGAN ET AL., CONSTITUTING THE STATE TAX COMMISSION OF MARYLAND



APPEAL FROM THE COURT OF APPEALS OF MARYLAND.

Black, Reed, Frankfurter, Douglas, Jackson, Burton, Clark, Minton; Chief Justice Vinson took no part in the consideration or decision of this case

Author: Douglas

[ 340 U.S. Page 512]

 MR. JUSTICE DOUGLAS delivered the opinion of the Court.

The State of Maryland imposes on steam railroad companies a franchise tax, measured by gross receipts, apportioned to the length of their lines within the State.*fn1 Appellant Canton Railroad Company, a Maryland corporation, challenges the validity of the tax under the Import-Export Clause of the Constitution, Art. I, ยง 10, cl. 2, insofar as the gross income by which the tax is measured includes revenues derived from the handling of goods moving in foreign trade.

Canton is a common carrier of freight operating entirely within the City of Baltimore, Maryland. It maintains a marine terminal in the port of Baltimore and railroad lines connecting this terminal with the lines of major trunk-line railroads. Its operating revenues are derived from services which fall into the following classifications:

Switching freight cars from the piers to the lines of connecting railroads.

Storage pending forwarding, for which a charge is made for each day beyond a free period.

Wharfage, or the privilege of using Canton's piers for the transfer of cargo to lighters or to trucks.

[ 340 U.S. Page 513]

     Weighing of loaded freight cars.

Furnishing a crane for use in unloading vessels. This crane is operated by a stevedoring company, which pays Canton a set charge per ton for the "crane privilege."

A substantial proportion of the freight moved to and from the port consists of exports from and imports into the United States. In its report to the State Tax Commission for 1946, Canton showed gross receipts from its railroad business in Maryland of $1,588,744.48, of which it claimed $705,957.21 to be exempt from taxation because derived from operations in foreign commerce. After a hearing, the Commission rejected Canton's contention that a part of its gross receipts was constitutionally exempt from the tax, assessed its gross receipts at the higher figure, and imposed a tax of $39,092.34. The ...


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