Constitutional Law – Congressional Powers – Validity of the 1951 Gamblers’ Occupation Tax Act

The Revenue Act of 1951 levied a tax on persons engaged in the business of accepting wagers, requiring such persons to register their names and places of business and residence with the Collector of Internal Revenue. The act also required the disclosure of the name and address of each person receiving wagers for the registrant, or, if the registrant himself received wagers for another, the name of that person. Violations of the act were punishable by fine and imprisonment. Defendant was indicted for willful failure to register and pay the tax. The district court granted defendant’s motion to dismiss on the ground that the pertinent sections of the act were unconstitutional as an infringement of the powers reserved to the states by the Tenth Amendment. On appeal, held, reversed, three justices dissenting. Although Congress cannot directly regulate wagering activities, these activities are a proper subject for federal excise taxation and an otherwise valid tax is not rendered invalid merely because it discourages or deters such activities. The registration provisions of the Gamblers’ Occupational Tax are adapted to the collection of the tax. United States v. Kahriger, 345 U.S. 22, 73 S. Ct. 510 (1953).