Aero Mayflower Transit Co. v. Board of Comm'rs
332 U.S. 495 (1947)

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U.S. Supreme Court

Aero Mayflower Transit Co. v. Board of Comm'rs, 332 U.S. 495 (1947)

Aero Mayflower Transit Co. v.

Board of Railroad Commissioners of Montana

No. 39

Argued October 15, 1947

Decided December 8, 1947

332 U.S. 495

APPEAL FROM THE SUPREME COURT OF MONTANA

Syllabus

Appellant, a foreign corporation engaged exclusively in interstate transportation of freight by motor trucks and doing a continuous and substantial amount of such business in Montana, challenged the validity under the Commerce Clause of two Montana taxes on all interstate and intrastate motor carriers operating there: (1) a flat tax of $10 for each vehicle operated over the State's highways, and (2) a "gross revenue" tax which, as applied to the appellant, amounted to an additional flat fee of $15 per vehicle. The taxes are imposed expressly "in consideration of the use of the highways of this state" and "in addition to all other licenses, fees and taxes imposed upon motor vehicles in this state."

Held:

1. As applied to appellant, the taxes do not violate the Federal Constitution. Pp. 332 U. S. 501-507.

2. This Court is bound by the state court's construction of the tax statute as applying alike to interstate and intrastate commerce, and of "gross operating revenue" as comprehending only such revenue as is derived from appellant's operations within Montana. Pp. 332 U. S. 499-500.

3. The fact that the proceeds of the taxes go into the State's general fund, subject to appropriation for general state purposes, does not render them invalid. Pp. 332 U. S. 502-505.

4. The taxes are levied as compensation for the use of the highways, and not on the privilege of doing interstate business. P. 332 U. S. 505.

5. It is immaterial that the State imposes two taxes, rather than one, or that appellant pays other taxes which in fact are devoted to highway maintenance. Pp. 332 U. S. 501-507.

119 Mont. 118, 172 P.2d 452, affirmed.

A state court of Montana sustained one of two state taxes as applied to appellant, and enjoined appellant from operating within the State until the tax was paid.

Page 332 U. S. 496

The Supreme Court of Montana upheld both taxes as applied to appellant. 119 Mont. 118, 172 P.2d 452. Affirmed., p. 507.

MR. JUSTICE RUTLEDGE delivered the opinion of the Court.

Again we are asked to decide whether state taxes as applied to an interstate motor carrier run afoul of the commerce clause, Art. I, § 8, of the Federal Constitution.

Two distinct Montana levies are questioned. Both are imposed by that state's Motor Carriers Act, Rev.Codes Mont.(1935) §§ 3847.1-3847.28. One is a flat tax of $10 for each vehicle operated by a motor carrier over the state's highways, payable on issuance of a certificate or permit, which must be secured before operations begin, and annually thereafter. § 3847.16(a). [Footnote 1] The other is a quarterly fee of one-half of one percent of the motor carrier's

Page 332 U. S. 497

"gross operating revenue," but with a minimum annual fee of $15 per vehicle for class C carriers, in which group appellant falls. § 3847.27. [Footnote 2] Each tax is declared expressly to be laid "in consideration of the use of the highways of this state" and to be "in addition to all other licenses, fees and taxes imposed upon motor vehicles in this state."

Prior to July 1, 1941, the fees collected pursuant to §§ 3847.16(a) and 3847.27 were paid into the state treasury and credited to "the motor carrier fund." [Footnote 3] After that date, by virtue of Mont.Laws, 1941, c. 14, § 2, they were allocated to the state's general fund.

Appellant is a Kentucky corporation, with its principal offices in Indianapolis, Indiana. Its business is exclusively interstate. It consists in transporting household

Page 332 U. S. 498

goods and office furniture from points in one state to destinations in another. Appellant does no intrastate business in Montana. The volume of its interstate business there is continuous and substantial, not merely casual or occasional. [Footnote 4] It holds a certificate of convenience and necessity issued by the Interstate Commerce Commission, pursuant to which its business in Montana and elsewhere is conducted.

In 1935, appellant received a class C permit to operate over Montana highways, as required by state law. [Footnote 5] Until 1937, apparently, it complied with Montana requirements, including the payment of registration and license plate fees for its vehicles operating in Montana and of the 5

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