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Caskey Baking Co. v. Virginia
Citations: 313 U.S. 117; 61 S. Ct. 881; 85 L. Ed. 1223; 1941 U.S. LEXIS 704Docket: 676
Court: Supreme Court of the United States; April 28, 1941; Federal Supreme Court; Federal Appellate Court
Caskey Baking Co., Inc., a West Virginia corporation, was involved in a legal case after being convicted for selling bread in Virginia without a required state license, resulting in a fine. The company operates by delivering bread regularly to customers in Virginia, although it has no permanent property or business location in the state, except for maintaining an office for claims as mandated for registered foreign corporations. The relevant Virginia statute imposes an annual license tax on entities selling goods at locations other than a fixed business site, with specific exemptions for manufacturers and licensed wholesale dealers, which the appellant does not qualify for. Caskey Baking Co. challenged the statute, arguing it violated the commerce clause and equal protection clause of the Federal Constitution, asserting either that it was engaged in interstate commerce that should not be taxed by the state or that the tax discriminated against its intrastate business. The Supreme Court ruled against the appellant, stating that while transporting goods across state lines constitutes interstate commerce, the activity being taxed is the local business of peddling, which does not violate any constitutional protections. The court dismissed the claim of discrimination against interstate commerce, noting that all peddlers, regardless of their sourcing, face the same tax obligations under the law. The Tax Code of Virginia outlines a structured taxation scheme for various types of sellers. Manufacturers are taxed on capital, which covers all activities, including selling their products. Wholesale merchants with a fixed business location are subject to a license tax based on their purchases and can operate statewide without additional license taxes if they are also licensed by their local jurisdiction. Distributing houses, whether run by manufacturers or wholesalers, are treated as wholesalers for taxation purposes. Retail merchants and peddlers must also obtain licenses and pay taxes—retail merchants based on purchase value and peddlers on a fixed annual fee. Notably, peddlers without a fixed location who sell only to licensed retailers fall outside these classifications, and, without § 192b, would be the only vendors in Virginia potentially exempt from taxation. Peddlers at wholesale are not eligible for the same licensing and taxation as other vendors. The court emphasizes that the equal protection clause of the Fourteenth Amendment allows states to classify businesses for taxation, meaning some may be taxed differently while maintaining equality within classifications. The judgment was affirmed.