Here is an excellent article on licensing
from the Oregon Law Review, 1953.

Thanks to Frank Taucher for forwarding it; he evidently received it from Pamela Gaston.

tnx and kudos to pamela gaston for sharing this

regards
ft

Public Licenses and Private Rights, 33 Oregon Law Review 1 (Barnett, 1953)

Because of the rapidly increasing application of the license system to more and more activities by the Federal, state, and local governments, the further consideration of the relation of public licenses to private rights becomes more and more important. The popular understanding of the word "license" [required by government for the performance of various activities] undoubtedly is a permission to do something which, without the license, would not be allowable. The object of the license is to confer a right that does not exist without the license. Standard Oil Co. v. Commonwealth, 119 Ky. 75, 82 S.W. 1020, 1021 (1904); Hackett v. Wilson, 12 Or. 25, 37, 6 Pac. 652 (1885), Reser v. Umatilla Co, 48 Or. 326, 327, 86 Pac. 595 (1906); State v. Martin, 180 Or. 459, 474, 176 P.2d 636, 643 (1947); [33 Or. L. Rev. 3, Fn. 2].

But, in fact, there is no grant of "privilege" (benefaction) of any kind whatever in a public license. Courts sometimes see this, and sometimes they do not; and so the law has become greatly confused. It will be apparent that principles applicable to public licenses (malefactions) have been confused with those applicable to private licenses (benefactions), largely because the two unrelated concepts have the same name; and that a false analogy of "licenses" (malefactions) to true "privileges" (benefactions) granted by the governments has probably made more mischief in this connection. But these two concepts of privilege have no relation whatever to that of a public "license." [33 Or. L. Rev. 3-4].

A license is merely a permission to do what is unlawful at common law, or is made so by some statute or ordinance, including the one authorizing or requiring the license. The Laundry License Case, 22 Fed. 701, 703 (D. Or. 1885); [33 Or. L. Rev. 3, Fn. 2].

And so courts have, in this connection, distinguished "licensed" vocations from vocations "lawful per se." U.S. v. McFarland, 28 App. D.C. 552, 568 (1907); Peginis v. Atlanta, 132 Ga. 302, 63 S.E. 857, 858 (1909); [33 Or. L. Rev. 3, Fn. 3].

A license is "a personal privilege,...conveys no estate or interest, and is revocable at the pleasure of the party making it." De Haro v. U.S., 5 Wall. 599, 627 (U.S. 1866); [33 Or. L. Rev. 3, Fn. 5].

"One-half of the doubts in life arise from the defects of language, and if this instrument had been called an exemption, instead of a license, it would have given a better ideal of its character. Licensing acts, in fact, in legislation, are universally restraining acts ..." Johnson, J., concurring, Gibson v. Ogden, 9 Wheat. 1, 222, 232 (U.S. 1824). See also Creighton & Smart, Introductory Logic 79 (5th ed. 1946); Cohen and Nagel, Introduction to Logic and Scientific Method 17 (1947). [33 Or. L. Rev. 3, Fn. 6].,

The distinction between a true "privilege" and a "right" ("vested right") is historical rather than logical. "Frequently a force of history is felt in the distinction between the citizen's rights and a favor accorded to him by government. It is the difference between taking something away from one who has always had it and giving someone something he has no right to demand. To a large degree what one 'has' which may be 'taken away' is an accident of history.." Hale, Hearings: The Right to a Trial, with Special Reference to Administrative Powers, 42 Ill. L. Rev. 749, 775 (1948). So the term "right" or "vested right" itself "indicates little beyond the ideal of inviolability." Freund, Police Power 602 (1909). [33 Or.L.Rev. 4, Fn. 7].

It is thus very clear then that "the requirement of a license is not intended as a privilege, but as a common restraint" ---and a restraint upon activities authorized by the common law. But, as has been said, "a license law ... assumes the illegality of the business, and denounces penalties upon those who pursue it without previously protecting themselves by procuring a license." State v. Parker Distilling Co., 236 Mo. 219, 139 S.W. 453, 462 (1911); [33 Or. L. Rev. 4, Fn. 11].

A license is merely a permit or privilege to do what otherwise would be unlawful. The purpose of it is to regulate and control the manner in which the business is conducted, and prevent its being carried on in such a way as to ignore the public interest. Palmetto Fire Ins. Co. v. Beha, 13 F.2d 500, 503 (S.D. N.Y. 1926); [33 Or. L. Rev. 5, Fn. 13].

The form of licensing to be considered here is the administrative lifting of a legislative prohibition. The primary legislative thought in licensing is not prohibition but regulation, to be made effective by the formal general denial of a right which is then made individually available by an administrative act of approval, certification, consent or permit. Freund, Licensing, 5 Encyc. Soc. Sci. 447 (1933); [33 Or. L. Rev. 5, Fn. 13].

That is just why licenses are required --- to restrict the liberty in activities already existing at common law. [33 Or. L. Rev. 5-6].

The "liberty" guaranteed by the Constitution "must be interpreted in light of the common law, the principles and history of which were familiarly known to the framers of the Constitution." [U.S. v. Wong Kim Ark, 169 U.S. 649, 654 (1898)]. This liberty denotes the "right of the individual ... to engage in any of the common occupations of life ... and generally to enjoy those privileges long recognized at common law as essential to the ordinary pursuit of happiness by free men." Meyer v. Nebraska, 262 U.S. 390, 399; [33 Or. L. Rev. 6, Fn. 19].

Hutcheson, The Common Law of the Constitution, 15 Tex. L. Rev. 317 (1937); Barnett, Vested Rights in the Common Law, 27 Or. L. Rev. 25 (1947); [33 Or. L. Rev. 6, Fn. 21]. Power of State to Restrict One’s Right to Engage in Lawful Occupation, 25 Va. L. Rev. 219 (1938); [33 Or. L. Rev. 6, Fn. 22].

The opportunity to become a citizen of the United States is said to be merely a privilege and not a right. Tutun v. U.S., 270 U.S. 568, 578 (1926). [33 Or. L. Rev. 7, Fn. 24].

It has been stated that "numerous authorities ... hold that a license is not within the protection of the Constitution." [Fn. 25 citing, State v. Cote, 122 Me. 452, 120 Atl. 538 (1923)]. However, if some Constitutional protection may be denied, there is no good reason in logic why all may not be denied. Frost Trucking Co. v. Railroad Comm’n., 271 U.S. 583, 593-594 (1926). [33 Or. L. Rev. 8, Fn. 26].

It is an essential ingredient of a legal license, that it confers no right, or estate, or vested interest, but is at all times revocable at the pleasure of the party that grants it ... [33 Or. L. Rev. 8, Fn. 28].

Oppenheim, Unconstitutional Conditions and State Powers, 26 Mich. L. Rev. 176 (1928); [33 Or. L. Rev. 9, Fn. 30].

It would be a palpable incongruity to strike down an act of state legislation which, by words of express divestment, seeks to strip the citizen of rights guaranteed by the Federal Constitution, but to uphold an act by which the same result is accomplished under the guise of a surrender of a right in exchange for a valuable privilege which the state threatens otherwise to withhold. It is not necessary to challenge the proposition that, as a general rule, the state, having power to deny a privilege altogether, may grant it upon such conditions as it sees fit to impose. But the power of the state in that respect is not unlimited; and one of the limitations is that it may not impose conditions which require the relinquishment of constitutional rights. Frost Trucking Co. v. Railroad Comm’n, supra, at 593-594 (1926); [33 Or. L. Rev. 10, Fn. 32].

"...the acceptance of a license, in whatever form, will not impose upon the licensee an obligation to respect or to comply with any provisions of the statute or the regulations proscribed ... that are repugnant to the Constitution of the United States." Cargill Co. v. Minnesota, 180 U.S. 452, 468 (1901); [33 Or. L. Rev. 10, Fn. 33].

Being a privilege, it [a motor vehicle license] can be given or withheld... As a general rule, the state having the power to deny a privilege altogether may grant it upon conditions, not requiring relinquishment of constitutional rights, as it sees fit to impose....A constitutional power cannot be used by way of condition to obtain an unconstitutional result. McIntyre v. Harrison, 72 Ga. 65, 157 S.E. 499, 506-507 (1931); [33 Or. L. Rev. 11, Fn. 34].

If the wayward courts had only realized that a "license" is not a grant of a new "privilege," but, on the contrary, a restriction on a "right" already existing, all this absurd confusion, with resulting deprivation of constitutional protections, would have been avoided. [33 Or. L. Rev. 15].
Citizens Savings and Loan v. Topeka, 87 U.S. 455, 461,
20 Wall 655 (1874) http://laws.findlaw.com/us/87/655.html;
Hurtado v. California, 110 U.S. 516, 536 (1884) http://laws.findlaw.com/us/110/516.html
(It must be conceded that there are such rights in every free government
beyond the control of the state.); Cf. Adair v. U.S.,208 U.S. 161, 28 S.Ct. 277 (1908)20 http://laws.findlaw.com/us/208/161.html ; Adkins v. Children 92s Hospital, 261 U.S. 525, 43 S.Ct. 394 (1923) http://laws.findlaw.com/us/261/525.html ; Taxing the Exercise of Natural Rights,Harvard Legal Essays (Maguire, 273, 322 (1934)); and that class of Authority, infra.

IN FEBRUARY, three major retailers took a giant—and controversial—step

toward integrating their online and brick-and-mortar stores. Target, Toys "R" Us and Wal-Mart announced that they would begin levying a sales tax for online purchases.

They're not the first. Circuit City and Sears, for example, already have uniform tax collection and remittance procedures across their two sales channels and have made significant inroads in integrating their online and physical stores. The recent move by those three retailers comes when many states, suffering from the worst budget crisis in years, are working to streamline sales tax collection—an effort that could lead states to pass legislation that would force Internet retailers and cataloguers to start charging sales tax regardless of where they do business. (Massachusetts isn't waiting; it started this year asking tax filers to account for out-of-state purchases.)

Before Feb. 1, WalMart.com, Target.com and ToysRUs.com charged sales tax only for goods bought online in states where they had what's called "nexus," or a physical presence such as a retail store, distribution center or call center. This practice followed a 1992 Supreme Court ruling on states' rights to charge a sales tax.

It turns out that for the national chains, this is more than a tax issue. There's a customer service component (shoppers like being able to return online purchases to a local store) and a systems integration challenge (it takes some doing to calculate sales taxes across state and local jurisdictions). Charging sales tax in some states but not in others has made it impossible for Target, Toys "R" Us and Wal-Mart customers to drive to a local store to return items they ordered online because the tax-free totals on their online sales receipts didn't equal the taxed totals tallied by store clerks, according to Kate Delhagen, a Forrester Research analyst. "Those guys were getting a little frustrated from hearing from their consumers, 'Why can't we return this stuff to any store?'" she says.

StatShot

E-Returns Growing The IRS began accepting electronically filed tax returns in 1986. Since that limited test (25,000 individual returns), Net-based returns have ramped up to a projected 54 million this year.
When Target, Toys "R" Us and Wal-Mart established their Internet operations, they spun them off as entities "separate from the mothership" so that they didn't have to charge or collect taxes in the states where their physical stores existed, says Delhagen. "Now, they're in the process of undoing the dotcom spinout," she says. And retailers such as Circuit City and Sears that kept their Internet stores under the watchful eye of corporate headquarters are a step ahead, she adds.

The march by brick-and-click chains to assess taxes for online purchases would put pure e-tailers such as Amazon.com on the same playing field, of course. (Though even Amazon.com charges sales tax in Washington state and North Dakota, where it has some operations.)

Since the Streamlined Sales Tax Project began in 2000, 39 states and the District of Columbia have joined to simplify their complicated sales tax laws and collection procedures. One of the project's proposals is to fix loopholes where remote sellers aren't required to collect sales taxes.

And there's money in those clicks. A University of Tennessee study shows that states will miss out on $440 billion worth of revenue from remote sales between 2001 and 2011. The issue of collecting taxes on online purchases had been under a moratorium since 2001, but that is scheduled to be lifted in November, which will likely renew public debate over the issue. "We have long been supportive of streamlining and simplifying the sales tax system," says Cynthia Lin, a spokeswoman for WalMart.com. "It's also our belief that all retailers should be required to collect sales tax for all sales."

That sentiment is music to governors' ears around the nation, whose association is lobbying Congress to pass a bill that lets states adopt Internet sales taxes. Stay tuned.

— MERIDITH LEVINSON

  ¶ 12:06 PM