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U.S. Supreme Court

Quaker City Cab Co. v. Commonwealth, 277 U.S. 389 (1928)

Quaker City Cab Co. v. Commonwealth of Pennsylvania

No. 139

Argued April 20, 1928

Decided May 28, 1928

277 U.S. 389


A law of Pennsylvania (Pa. L. 1889, 420, 431; Pa.St., 1920, 20,388) provides that a tax be laid on the gross receipts derived by foreign or domestic corporations from their operation of taxicabs in intrastate transportation of passengers, but does not tax the like receipts of individuals and partnerships in the same kind of business.


1. The equal protection clause of the Fourteenth Amendment extends to foreign corporations within the jurisdiction of the state, and chanroblesvirtualawlibrary

Page 277 U. S. 390

safeguards to them protection of laws applied equally to all in the same situation. P. 277 U. S. 400.

2. The equal protection clause does not detract from the right of the state justly to exert its taxing power or prevent it from adjusting its legislation to differences in situation or forbid classification in that connection, but it does require that the classification be not arbitrary, but based on a real and substantial difference having a reasonable relation to the subject of the particular legislation. Id.

3. The right to withhold from a foreign corporation permission to do local business therein does not enable the state to require such a corporation to surrender the protection of the federal Constitution. Id.

4. Characterization of a tax by the state court is not binding here. P. 277 U. S. 401.

5. The practical operation of the taxing provision is to be regarded, and it is to be dealt with, according to its effect. Id.

6. The tax is not of a kind peculiarly applicable to corporations, as are taxes on their capital stock or franchises, nor a tax taken in lieu of any other tax or used as a measure of one intended to fall elsewhere, but is specifically and solely a tax on gross receipts, which could be laid on receipts belonging to natural persons quite as conveniently as on those of corporations. The discrimination, made to depend entirely upon the fact that the receipts taxed belong to corporations, and not justified by any difference in the source of the receipts or in the situation or character of the property employed, rests on a purely arbitrary basis. P. 277 U. S. 402.

7. The provision of the state enactment violates the equal protection clause of the Fourteenth Amendment. Id.

287 Pa 161 reversed.

Error to a judgment of the Supreme Court of Pennsylvania, affirming a judgment of the Court of Common Pleas, 29 Dauphin Co.Rep. 90, against the cab company and in favor of the state, on the cab company's appeal from a settlement of gross receipts taxes made by the Auditor General and approved by the Treasurer of the state. chanroblesvirtualawlibrary

Page 277 U. S. 398

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