Michelin Tire Corp. v. Wages

Michelin Tire Corporation (Michelin) (plaintiff) was a New York corporation that did business in Georgia importing automobile and truck tires manufactured in France and Nova Scotia. Michelin paid a 4 percent import duty on all the goods it imported into the United States. Michelin sold its tires and tubes to franchise dealers out of a warehouse in Gwinnett County, Georgia. The tax commissioner and tax assessors of Gwinnett County, Georgia (collectively, the Gwinnett officials) (defendants) assessed ad valorem property taxes against the tires and tubes imported by Michelin. Michelin filed a lawsuit in Gwinnett County Superior Court seeking declaratory and injunctive relief and arguing that the property taxes violated the Import-Export Clause of the United States Constitution. The superior court granted the requested relief. On appeal, the Georgia Supreme Court held that some of the imported goods were immune from property taxes but that the tires, which had been mingled with other tires to be sorted and sold, were taxable because they had lost their character as imports. In making its decision, the Georgia Supreme Court relied on Low v. Austin, 80 U.S. (13 Wall.) 29 (1872), in which the United States Supreme Court held that under the Import-Export Clause, states are prohibited from imposing property taxes on imported goods until the goods lose their character as imports and are incorporated into the general property of a state. The United States Supreme Court granted certiorari to determine whether the property tax could be levied on the imported tires.