HAMMOND, J., delivered the opinion of the Court.
At issue in this appeal is the right of Maryland to compel an unqualified foreign corporation to collect the use tax on goods shipped by it direct to resident purchasers on orders solicited within but accepted without the State. The lower court held that the State had this right and Topps Garment Corp., the out of state vendor, appeals.
The following provisions of the Code, 1951, Art. 81, are relevant (amendments to Sec. 368 (b) and Sec. 369 made in
The stipulations of the parties show the following facts. Topps, an Indiana corporation, manufactures uniforms that it sells in various parts of the United States. It neither owns nor rents any office, showroom, distribution center or warehouse in Maryland. It sells its products to Maryland purchasers by means of solicitors, some of whom are Maryland residents. These solicitors have been furnished with catalogs and order blanks. They are not on Topps' payroll, are not under supervision and do not account for their time or on whom they call with their catalogs. When a solicitor takes an order for goods shown in the catalog, he receives a percentage of the price as a deposit, which he retains as his commission. The order is mailed by the solicitor to Topps, which has the right to accept or reject it. When it is accepted, the goods are mailed by Topps direct to the purchaser, usually C.O.D., but in some cases on credit on open account. Solicitors come and go.
In 1954 the Comptroller of Maryland wrote several times to Topps, requesting an audit of all Maryland sales during the previous six years — the statutory period of limitations is six years — so hat he would have a basis for a use tax assessment. Receiving no reply, the Comptroller wrote that an estimated
Appellant did not below, and does not here, deny that the Maryland statute in terms imposes liability on it to collect the use tax. It concedes that the judgment against it and the judgment of condemnation must stand if the Maryland statutes are constitutional, and attacks the judgments on the ground that the statute, as applied to it in the light of the slight connection it has with Maryland, affronts both the commerce clause of the Federal Constitution and the due process clause of the Fourteenth Amendment.
In General Trading Co. v. State Tax Commission, 322 U.S. 335, 88 L.Ed. 1309, the Supreme Court held that Iowa, under her use tax law, which imposed upon "`Every retailer maintaining a place of business'" in the State the duty to collect the tax from the purchaser, could constitutionally compel an out-of-state corporate vendor to collect the tax. In that case, a Minnesota corporation which had never qualified as a foreign corporation in Iowa and which did not maintain there any office, branch or warehouse, sent salesmen into the State to solicit orders that were always subject to acceptance or rejection in Minnesota whence the goods were shipped by common carrier or the post to the Iowa buyers. The Court noted that no State could tax the privilege of doing interstate business, but that a nondiscriminatory excise tax on all personal property consumed within the State, laid against
In Miller Bros. Co. v. Maryland, 347 U.S. 340, 98 L.Ed. 744, the Supreme Court reversed a judgment of this Court and held that the due process clause of the Fourteenth Amendment prevented Maryland from making Miller Brothers Company, a Delaware corporation, the collector of use tax on goods sold directly to inhabitants of Maryland at the corporation's store in Delaware. The vendor's only connection with Maryland was advertising in Delaware papers and radio stations that reached the notice of Marylanders, the occasional mailing of notices to former customers some of whom lived in Maryland, and the delivery of some purchases in Maryland by its own truck. Mr. Justice Jackson, who wrote the opinion of the majority of five Justices, noted that he had dissented in the General Trading Co. case and that whether or not in so doing "he made a correct application of principles of jurisdiction to the particular facts, it is clear that circumstances absent here were there present to justify the Court's approval of liability for collecting the tax." He continued: "That was the case of an out-of-state merchant entering the taxing state through traveling sales agents to conduct continuous local solicitation followed by delivery of ordered goods to the customers, the only nonlocal phase of the total sale being acceptance of the order. Probably, except for credit reasons, acceptance was a mere formality, since one hardly incurs the cost of soliciting orders to reject. The Court could properly approve the State's decision to regard such a rivalry with its local merchants as equivalent to being a local merchant."
In Thompson v. Rhodes-Jennings Furn. Co., 268 S.W.2d 376, the Supreme Court of Arkansas followed the General Trading Co. case on analogous facts, having concluded that Miller Brothers had in no way impaired its validity and authority. The Supreme Court denied certiorari under the
The fact that the solicitors in the present case were agents who were independent contractors, rather than agents who were servants makes no difference. It is beyond question that they were agents of Topps for the purpose of displaying its products by means of its catalogs, for the taking of orders for those products, for the forwarding of the orders to headquarters and for the purpose of accepting deposits on the sales. The activities of the individual solicitors may have been intermittent but in total their activities were regular, systematic and productive of a substantial flow of goods into Maryland. The Supreme Court made it plain in International Shoe Co. v. Washington, 326 U.S. 310, 90 L.Ed. 95, that an unqualified foreign corporation could be made subject to jurisdiction and compelled to make contributions required of local employers to the state unemployment compensation fund where its presence was evidenced only by regular and systematic solicitation of orders in the state by salesmen on commission, resulting in a continuous interstate flow of the corporation's products to resident buyers (the only additional activity was the display of samples). Mr. Justice Stone said inter alia that the presence of a corporation without, as well
The Supreme Court gave indication of this in the General Trading Co. case, when it pointed out that Felt & Tarrant Mfg. Co. v. Gallagher, 306 U.S. 62, 83 L.Ed. 488, and Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 85 L.Ed. 888, were controlling although in the Gallagher case there were far more elaborate arrangements for soliciting orders (two exclusive distributors), and in the Sears case, the vendor had retail stores in the State, and said: "All these differentiations are without constitutional significance." In Travelers Health Asso. v. Virginia, 339 U.S. 643, 94 L.Ed. 1154, the foreign company was a non-profit membership association incorporated in Nebraska, where its only office was located. It conducted a mail order health insurance business, systematically soliciting new members, usually through the unpaid activities of Virginia residents who were already members. Virginia enjoined it from further solicitation of sales in the State. The Court held that its contacts with Virginia were sufficient to sustain jurisdiction, relying in part on the International Shoe Co. case. In McGoldrick v. Berwind-White Coal Min. Co., 309 U.S. 33, 49, 84 L.Ed. 565, 572, the Supreme Court equated the New York City tax on sales for consumption in the City with the ordinary use tax, such as is before us, that the Court had previously sustained as constitutional. In McGoldrick v. DuGrenier, Inc., 309 U.S. 70, 84
We think it clear from the authorities cited that appellant is not helped by the fact that its soliciting agents in Maryland were independent contractors, and that its activities in and in relation to Maryland clearly accord with the "traditional notions
Judgments affirmed, with costs.