Virtue Bros. v. County of Los Angeles

All plaintiffs are manufacturers. Virtue Bros. (Virtue), imported plywood from Finland; Clayton Manufacturing Company (Clayton), imported steel tubing from the British Isles; and Anchor Post Products, Inc. of California (Anchor), imported wire from Australia. Taxes were levied by the County of Los Angeles and the City of Los Angeles (defendants) upon the assessed valuation of full inventories of import materials in the possession of plaintiffs on the first Monday in March 1960, the taxing date. Plaintiffs paid under protest and sued for a refund.

These cases present the constitutional question of when and the extent to which a local nondiseriminatory property tax may be levied upon materials imported for use by local manufacturers.

Article I, section 10, clause 2, of the United States Constitution provides: “No State shall . . . lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection laws: . . . ”

Plaintiffs contend that only so much of the imported materials which are removed from their respective warehouses and specifically set aside for manufacture pursuant to a production schedule are taxable.

The trial court…