Montana Attorney General Opinion 15-294

Opinion No. 294 Whoiesalers--Licenses--Illterstate Commerce. HELD: Chapter 164, Laws of 1933, applies to dealers in wholesale who have place of business in state. A law a ttplllpting to license dealer in whole- ;.;ale who has place of business out of state, receh'es order and ships merchan- dise into another state would be uncon- stitutional, as such business constitute;.; interstate commerce. August 8, 1933. You have submitted this question: '''l'he question has arisen regarding" Chapter 164 of the 1933 Session Laws known as the Wholesalers Lic('nse Law. One party is taking the stand that be CIlIl come into Montana, take orders and then bring the goods into l\Iontanll. ill interstate traffic and not be in con- flict with the law and without the 1H'l::cssity of taking .the license." Cha pteI' 164, to which you refer, pro- \'ides for the licensing of dealers at wholesale. Section 1 defines who is a dealer at wholesale. Section 4 pro- "i(les: "Licenses to engage in the busi- ness of a dealer at wholesale within the State of Montana shall be issued by the COlllmissioner - - -" Paragraph c under Section 4 provides: "'l'he license. or a certified copy thereof, shall he kept posted in the office of the li- censee at each place within the state where he transacts husiness: the fec for each license shall be One Hundred Dollars ($100.00) * * *." There is nothing in the act to indi- cate an intention on the part of· the legislature to require a license from n dealer at wholesale who maintains a Vi ace of business outside of the State of l\fontana and who accepts orders from within the state and ships mer- chandise into the state. In fact, it is clear from the wording of the statute that it was the intention of the legis- lature to require a license from It dealer at wholesale within the State of Montana, who maintains a place of business within the State of Montana. Dnder this construction and interpre- tation of the act, it is not necessary to consider the question further. Assuming, however, that it was the intention of the legislature to impose II license upon a dealer at wholesale outside of the State of Montana, who accepts orders from within the state and. who ships merchandise into the state, it is my opinion that such stat- ute would be inoperative and UIlCOIlSti- 200 OPIXIOXS OF THE ATTORXEY GENERAL tutional for the reason that husiness of this character constitutes interstate ('ommerce and that privilege cannot be taxed by the state. Section 147 of 12 C .. J., p. 106: "Statutes and ordinances n re unconstitutional, or at least inoper- ative, when they attempt to impose a tax on canyasser~, solicitors, traveling salesmen, or other agents soliciting or- ders for nonresident' principal~, the goods being without the state at the time of sale and the contract of sale heing accepted or approved in the state of the principaL" Many cases are eit- I'd under footnote 91. A leading case is Robbins v. Shelhy County Taxing Dist., 120 U. S. 4R!l, 7 So Ct. 592. 30 L. Ed. 694. In thi>; ease the State of Tennessee sought to im- pose a license tax upon drummers and persons not having a regular licensed house of business in the taxing district. who offered to sell or who sold goods. wares and merchandise by sample. The merchandise was manufactured and shipped from tlie State of Ohio. In that case, while the court recognized the power of' the state to pass inspec- tion laws to secure the due quality and measure of products and commodities and laws to regulate or restrict the sale of articles deemed injurious to the health or morals, the principle of law was stated on page 497 that "the nego- tiation of sales of goods which are in another state, for the purpose of intro- ducing them into the state in which the negotiation is made, is interstate commerce." It wag held in that ca~e to be beyond the power of the state to impose a license tax upon the privilege of conducting such business. (See also : Crenshaw v. Arkansas, 227 U. So 3SB. 395, 33 S. Ct. 294, 57 L. Ed. 565; Looney \". Crane Co .. 245 U. S. 178, 188 62 L. Ed. 230, 38 Sup. Ct. Rep. 85; Chicago pte. R. R. Co. v. Harmon, 89 Mont. 1; 295 Pac. 762; 61 C. J. 338, sec. 326 et seq.: 37 C. J. 206, sec. 57 et seq.; id. 173, sec. 13.) It is my opinion that the construc- tion given this act herein is the only one possible, but if it is possible to give it two different constructions, one of which would render the act consti- tutional and the other of which would render it unconstitutional, that con- >;truction which would render the act constitutionlll must be adopted.