Miller Brothers Co. v. Maryland

Miller Brothers Co. v. Maryland
Supreme Court of the United States
Argued January 5, 1954 Decided April 5, 1954
Full case name	Miller Brothers Co. v. Maryland
Holding
Court membership
Chief Justice Earl Warren Associate Justices Hugo Black · Stanley F. Reed Felix Frankfurter · William O. Douglas Robert H. Jackson · Harold H. Burton Tom C. Clark · Sherman Minton
Case opinions
Majority	Jackson, joined by Reed, Frankfurter, Minton, Burton
Dissent	Douglas, joined by Warren, Black, Clark

In Miller Brothers Co. v. Maryland, 347 U.S. 340 (1954), the Supreme Court ruled 5-4 that a mail order reseller was not required to collect sales tax unless it had sufficient contact with the state.

Background

Miller Brothers Co. was a store in the state of Delaware that sold merchandise to consumers. It did not accept phone or mail orders, although it did solicit and advertise via newspaper, mail, or radio in Delaware. Some of these advertisements would reach Maryland residents and they would sometimes come to the store, make purchases and then return to Maryland. These customers would either take their purchases with them or have them delivered by a common carrier or by a truck owned and operated by Miller Brothers Co.

Maryland levied a tax on its residents on "the use, storage, or consumption" of articles within the state. Maryland also required all vendors -- regardless of where they were -- who sold goods to Maryland residents to collect this use tax. Miller Brothers Co. did not collect this tax and when the Miller Brothers Co. truck crossed in to Maryland to make a delivery, the state of Maryland seized it

The Court of Appeals of Maryland found the law valid and that Miller Brothers Co. was liable for the tax. Miller Brothers Co. appealed.

Maryland's tax here was a use tax. The 1944 Supreme Court case of McLeod v. J.E. Dilworth Co. (322 U.S. 327) dealt with whether state A could levy a sales tax on sales made by a merchant in state B to residents of state A.

Supreme Court ruling

The Supreme Court held that imposing tax collection duties on Miller Brothers Co. violated the Due Process Clause of the 14th Amendment. The Due Process Clause requires some "definite link, some minimum connection, between a state and the person, property, or transaction it seeks to tax." Residence within the state, the doing of business or the hiring of employees within the state, or the owning of property within the state would all qualify as such a connection.

Here, none of Miller Brothers' activities rose to that level. Maryland residents had to affirmatively come to the Delaware store. Miller Brothers' only contact with Maryland was through "the incidental effects of general advertising". As a result, "the burden of collecting or paying their tax cannot be shifted to a foreign merchant in the absence of some jurisdictional basis not present here." The residents of Maryland are, however, still liable for the use tax. It is only that Miller Brothers Co. was not responsible for collecting it.