A law of New Mexico defining " distributors " of gasoline as
those who sell it from tank cars, receiving tanks, or stations, or
in or from tanks, barrels, or packages not purchased from a
licensed distributor, and "retail dealers" as those other than
distributors who sell it in quantities of 50 gallons or less, lays
an annual license tax of $50.00
Page 252 U. S. 445
on each distributor for each distributing station, place of
business, or agency, and of $5.00 on each retailer for every place
of business or agency -- besides imposing an excise of 2� per
gallon on all gasoline sold or used, to be paid and made return of
by distributors and dealers; it provides inspectors to see to its
enforcement, and devotes the resulting revenue first to pay their
salaries and expenses, and then to a highway fund.
Held
that it is not an inspection act merely, but a privilege tax, and,
as applied to parties who bring gasoline from without and sell it
within the state, the act is void -- a burden on interstate
commerce -- insofar as it relates to their business of selling in
tank car lots and in barrels and packages, as originally imported
from other states, but, if separable, it is valid in its
application to sales made from such original packages in retail
quantities to suit purchasers. P.
252 U. S.
447.
An excise on purely local dealing in a commodity cannot be
treated as a discrimination against other states merely because the
commodity is not produced in the state imposing the tax, but comes
wholly from other states. P.
252 U. S.
449.
The question whether an act assuming to tax a business in its
interstate and intrastate aspects is separable as to the latter
reserved for final hearing where the relative importance
of the two classes of business as conducted by plaintiffs could not
be ascertained from the case as made on application for temporary
injunction. P.
252 U. S. 450.
Affirmed.
The case is stated in the opinion.
MR. JUSTICE DAY delivered the opinion of the Court.
These suits were brought by the three companies, appellees, in
the district court of the United States for the
Page 252 U. S. 446
District of New Mexico to enjoin the enforcement of an act of
the legislature of the state entitled:
"An act providing for an excise tax upon the sale or use of
gasoline and for a license tax to be paid by distributors and
retail dealers therein; providing for collection and application of
such taxes; providing for the inspection of gasoline and making it
unlawful to sell gasoline below a certain grade without notifying
purchaser thereof; providing penalties for violations of this act,
and for other purposes."
The law is found in Session Laws of New Mexico 1919, c. 93, p.
182.
The cause came before three judges upon an application for
temporary injunction and a counter motion to dismiss the bills of
complaint. The temporary injunction was granted, and a direct
appeal taken to this Court.
The provisions of the act, so far as necessary to be considered,
define a distributor of gasoline as meaning:
"Every person, corporation, firm, copartnership and association
who sells gasoline from tank cars, receiving tanks or stations, or
in or from tanks, barrels or packages not purchased from a licensed
distributor of gasoline in this state."
A retail dealer is defined as meaning: "A person, other than a
distributor of gasoline, who sells gasoline in quantities of fifty
gallons or less."
Every distributor is required to pay an annual license tax of
$50.00 for each distributing station, or place of business, and
agency. Every retail dealer is required to pay an annual license
tax of $5.00 for every place of business or agency. An excise tax
is imposed upon the sale or use of gasoline sold or used in the
state after July 1, 1919; such tax to be 2� per gallon on all
gasoline so sold or used. Any distributor or dealer who shall fail
to make return or statement as required in the act, or shall
refuse, neglect or fail to pay the tax upon all sales or use of
gasoline, or who shall make any false return or statement, or shall
knowingly sell, distribute or use any gasoline without the tax upon
the sale or use thereof
Page 252 U. S. 447
having been paid as provided in the act shall be deemed guilty
of a misdemeanor and punished by a fine and forfeiture of his
license. It is made unlawful for any person (except tourists or
travelers to the extent provided in the act) to use any gasoline
not purchased from a licensed distributor or retail dealer without
paying the tax of 2� per gallon. Inspectors are provided for each
of the eight judicial districts of the state, who are required to
see that the provisions of the act are enforced, and privileged to
examine books and accounts of distributors and retail dealers, or
warehousemen or others receiving and storing gasoline and of
railroad and transportation companies, relating to purchases,
receipts, shipments, or sales of gasoline; their salaries are
provided, and salaries and expense bills are to be paid out of the
state road fund. Any person who shall engage or continue in the
business of selling gasoline without a license or after such
license has been forfeited, or shall fail to render any statement,
or make any false statement therein, or who shall violate any
provision of the act the punishment for which has not been
theretofore provided shall be deemed guilty of a misdemeanor and,
upon conviction, shall be punished by a fine or imprisonment, or
both. The state treasurer is required to set aside from the license
fees and taxes collected under the provisions of the act a
sufficient sum to pay the salaries and traveling expenses of the
inspectors out of the money received from such collections, and to
place the balance to the credit of the state road fund, to be used
for the construction, improvement and maintenance of public
highways.
It is evident from the provisions of the act thus stated that it
is not an inspection act merely; indeed, the inspectors do not seem
to be required to make any inspection beyond seeing that the
provisions of the act are enforced, and the excess of the salaries
and fees of the inspectors is to be used in making roads within the
state. Considering
Page 252 U. S. 448
its provisions and the effect of the act, it is a tax upon the
privilege of dealing in gasoline in the State of New Mexico.
The bills in the three cases are identical except as to the
number of distributing stations alleged to belong to the companies
respectively. As there was no answer, and the bills were considered
upon application for injunction, and motion to dismiss, their
allegations must be taken to be true.
Plaintiffs are engaged in the business of buying and selling
gasoline and other petroleum products. The bills state that they
purchase gasoline in the States of Colorado, California, Oklahoma,
Texas and Kansas, and ship it into the state of New Mexico, there
to be sold and delivered. The bills describe two classes of
business -- first, that they purchase in the states mentioned, or
in some one of said states, gasoline, and ship it in tank cars from
the state in which purchased into the state of New Mexico, and
there, according to their custom and the ordinary method in the
conduct of their business, they sell in tank cars the whole of the
contents thereof to a single customer, before the package or
packages, in which the gasoline was shipped have been broken. In
the usual and regular course of their business, they purchase
gasoline in one of the states, other than the State of New Mexico,
and ship it, so purchased from that state, in barrels and packages
containing not less than two 5-gallon cans into the State of New
Mexico, and there, in the usual and ordinary course of their
business, without breaking the barrels and packages containing the
cans, it is their custom to sell the gasoline in the original
packages and barrels. The gasoline is sold and delivered to the
customers in precisely the same form and condition as when received
in the State of New Mexico; that this manner of sale makes the
plaintiffs distributors of gasoline as the term is defined in the
statute, and they are required to pay the sum of $50.00 per annum
for each of their stations
Page 252 U. S. 449
as an annual license tax for purchasing, shipping and selling
gasoline as aforesaid.
A second method of dealing in gasoline is described in the
bills: that the gasoline shipped to the plaintiffs from the other
states, as aforesaid, is in tank cars, and plaintiff or plaintiffs
sell such gasoline from such tank cars, barrels, and packages in
such quantities as the purchaser requires.
As to the gasoline brought into the state in the tank cars or in
the original packages and so sold, we are unable to discover any
difference in plan of importation and sale between the instant case
and that before us in
Standard Oil Co. v. Graves,
249 U. S. 389, in
which we held that a tax, which was in effect a privilege tax, as
is the one under consideration, providing for a levy of fees in
excess of the cost of inspection, amounted to a direct burden on
interstate commerce. In that case, we reaffirmed what had often
been adjudicated heretofore in this Court -- that the direct and
necessary effect of such legislation was to impose a burden upon
interstate commerce; that, under the federal Constitution, the
importer of such products from another state into his own state for
sale in the original packages had a right to sell the same in such
packages without being taxed for the privilege by taxation of the
sort here involved. Upon this branch of the case, we deem it only
necessary to refer to that case, and the cases therein cited, as
establishing the proposition that the license tax upon the sale of
gasoline brought into the state in tank cars, or original packages,
and thus sold, is beyond the taxing power of the state.
The plaintiffs state in the bills that their business in part
consists in selling gasoline in retail in quantities to suit
purchasers. A business of this sort, although the gasoline was
brought into the state in interstate commerce, is properly taxable
by the laws of the state.
Much is made of the fact that New Mexico does not produce
gasoline, and all of it that is dealt in within that
Page 252 U. S. 450
state must be brought in from other states. But, so long as
there is no discrimination against the products of another state,
and none is shown from the mere fact that the gasoline is produced
in another state, the gasoline thus stored and dealt in is not
beyond the taxing power of the state.
Wagner v. City of
Covington, 251 U. S. 95, and
the cases from this Court cited therein.
Sales of the class last mentioned would be a subject of taxation
within the legitimate power of the state. But, from the averments
of the bills, it is impossible to determine the relative importance
of this part of the business as compared with that which is
nontaxable, and at this preliminary stage of the cases we will not
go into the question whether the act is separable, and capable of
being sustained so far as it imposes a tax upon business
legitimately taxable. That question may be reserved for the final
hearing. The district court did not err in granting the temporary
injunctions, and its orders are
Affirmed.