National Private Truck Council v. Department of Taxation

37 Va. Cir. 334, 1995 Va. Cir. LEXIS 1105

• Court: Alexandria County Circuit Court
• Decided: November 13, 1995
• Docket: Case No. CH940330
• Status: Published

Opinion

By Judge Donald H. Kent

This matter came before the Court on cross-motions for summary judgment. The issue is whether or not Virginia Regulation § 630-3-401(G) violates 15 U.S.C. § 381 as well as the Due Process and Commerce Clauses of the United States Constitution.

The challenged regulation imposes Virginia corporate income taxes on foreign corporations which solicit orders for goods in Virginia, and the goods are shipped from outside the state in the corporation’s own private vehicles. The state imposes no tax on the seller when the goods are delivered into the state by common or contract carrier.

The Court having considered the pleadings, memoranda, and arguments of counsel finds that the clear and plain meaning of § 381 is that states may not impose a net income tax on out-of-state corporations whose only contact with the taxing state consists of soliciting orders and delivering the goods in the corporation’s own vehicles. To hold otherwise would be contrary to the intention of Congress in using the terms “shipment or delivery” and “by or on behalf of.”

Summary judgment is granted to the petitioners.