McCray v. United States, 195 U.S. 27; 24 S. Ct. 769; 49 L. Ed. 78 (1904)

Facts—McCray was sued by the United States for a statutory penalty of $50. He purchased for resale a fifty-pound package of oleomargarine artificially colored to look like butter, to which were affixed internal revenue stamps for uncolored oleomargarine rather than for artificially-colored oleo.

Question—Was the tax upon the colored oleomargarine an unconstitutional attempt to use the federal taxing power to regulate a matter reserved to the states?

Decision—No.

Reasons—J. White (6–3). “Undoubtedly, in determining whether a particular act is within a granted power, its scope and effect are to be considered. Apply- ing this rule to the acts assailed, it is self-evident that on their face they levy an excise tax. That being their necessary scope and operation, it follows that the acts are within the grant of power.” The Supreme Court refused to go behind the appearance of a revenue act and inquire into the motives of indirect regula- tion that might have inspired Congress. This legislation helped prevent fraud by preventing the marketing of oleomargarine colored to look like butter. The dissenting justices did not author an opinion.