United States v. Constantine (United States v Constantine)

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1935 United States Supreme Court case

United States v. Constantine, 296 U.S. 287 (1935), was a case before the United States Supreme Court that concerned liquor laws and taxation . Congress placed a tax on liquor dealers who violate state liquor laws. The Court struck down the relevant portion of the Revenue Act of 1926 as an attempt to punish a state violation through taxation.

Background

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A Prohibition era federal law required that sellers of alcohol obtain a federal excise license which costs $25 if the holder was in compliance with state law but $1,000 if they were not. The appellee had paid the lower fee but was found to be in violation of Alabama law by selling malt liquor in a Birmingham restaurant that exceeded the strength allowed by state law. The federal government then pursued Constantine for the $975 difference even though the violation occurred after the repeal of Prohibition .

Opinion of the court

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The court ruled that the primary purpose of the tax law was to enforce police powers not to raise revenue. Since the repeal of the Eighteenth Amendment , the federal law was no longer enforceable.

Dissents

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Justice Cardozo, in an opinion joined by Justices Brandeis and Stone, dissented, arguing that Congress could have had any one of several non-punitive justifications for the statute.

Subsequent history

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_National Federation of Independent Business v. Sebelius _ referenced the logic in this decision to determine whether the Affordable Care Act was a penalty or tax in terms of the Constitution. The Court held that it was a tax by "[d]isregarding the designation of the exaction, and viewing its substance and application."