Alaska Steamship Co. v. Mullaney, Commission of Taxation

The appellant operates a line of vessels for the transportation of freight and passengers between Seattle, Washington, and ports of Alaska. At the time to which this controversy relates, its 12 vessels were manned by 706 seamen all of whom were non-residents of Alaska. It also had 19 resident Alaska shore employees and some Seattle resident shore employees who made extended trips for the Company to Alaska.

On January 22, 1949, an extraordinary session of the Alaska legislature enacted a Net Income Tax Law, Laws 1949, Ex. Sess., c. 3, under the provisions of which the Steamship Company was required to withhold income tax from the wages of its employees. Because some doubt arose respecting the validity of the extraordinary session, the Alaska legislature on March 26, 1949, at its regular session, r.e-enacted the law with some changes. Laws 1949, c. 115. Section 16 of this Act purported to ratify and confirm all tax withholdings and other administrative steps taken under the former Act.

Appellant began the required withholding of the income taxes from wages paid to all its employees immediately after the enactment of the Act of January 22, 1949, the Act of the extraordinary…

concurring in the result and in part of the opinion:

I concur save as to the holding that the Commissioner’s power of apportionment, described in note 19 of the opinion, to reduce the tax if it is “larger * * * than in equity and good conscience” the taxpayer should pay, makes valid the provision of Section 5A(2) (a) that ‘Income received or derived from sales wherever made of goods, wares and merchandise manufactured or originating in the Territory shall be considered to be a part of gross receipts from sources within the Territory.”

The appellant’s complaint does not claim any amount of its income is of the kind described in the last quoted section, and it is not proved that there is such income. The constitutional question of the power of the territory to tax extraterritorial income should be decided only when that issue is before the court. Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 346 , 56 S.Ct. 466 , 80 L.Ed. 688 .

180 F.2d 805 12 Alaska 594 ALASKA STEAMSHIP CO. v. MULLANEY, Commission of Taxation. No. 12,298. United States Court of Appeals, Ninth Circuit March 1, 1950 Bogle, Bogle & Gates, Frank L. Mechem, Seattle, Wash., Faulkner, Banfield & Boochever, H. L. Faulkner, Juneau, Alaska, for appellant. J. Gerald Williams, Attorney General of Alaska, John H. Dimond, Asst. Atty. Gen., for appellee. John Geisness, Bassett & Geisness, Seattle, Wash., as amicus curiae;Sam L. Levinson, Edwin J. Friedman, Levinson & Friedman, Seattle, Wash., as amicus curiae; Francis R. Kirkham, Harry R. Horrow, Frank H. Roberts, San Francisco, Cal., for Alaska Packers Assn., as amicus curiae. (Pillsbury, Madison & Sutro, San Francisco, Cal., of counsel). Theron Lamar Caudle, Asst. Atty. Gen., Ellis N. Slack, I. Henry Kutz, Sp. Assts. to the Atty. Gen., (Mastin G. White, Solicitor, Dept. of Interior, Irwin W. Silverman, Chief Counsel, Div. of Territories & Island Possessions, Dept. of the Interior, Washington, D. c., of counsel), for United States as amicus curiae. Before DENMAN, Chief Judge, ORR and POPE, Circuit Judges. POPE, Circuit Judge. 1 The appellant operates a line of vessels for the…