Fox v. Standard Oil Co. of New Jersey,
294 U.S. 87 (1935)

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U.S. Supreme Court

Fox v. Standard Oil Co. of New Jersey, 294 U.S. 87 (1935)

Fox v. Standard Oil Company of New Jersey

No. 69

Argued November 9, 1934

Decided January 14, 1935

294 U.S. 87


1. Filling stations and distribution plants where gasoline, other petroleum products, and automobile accessories are sold are "stores" within the meaning of the West Virginia Chain Store License Tax Act, defining the term store as including any mercantile establishment in which goods, wares, or merchandise of any kind are sold, etc. P. 294 U. S. 95.

2. The legislative history of this Act and contemporaneous interpretation by the agent charged with its enforcement help to confirm the above-stated conclusion. P. 294 U. S. 96.

3. Although administrative constructions of state statutes by state officials are not binding in cases coming from federal tribunals, this Court will lean to an agreement with them. P. 294 U. S. 96.

4. A chain of gasoline stations maintained in a single ownership, held constitutionally subject to a different measure of taxation from stations in separate ownership. State Board of Tax Commissioners v. Jackson, 283 U. S. 527; Liggett Co. v. Lee, 288 U. S. 517. P. 294 U. S. 97.

5. Graduated state taxes on a chain of gasoline stations in single ownership held valid against objections that the accumulated exactions were so oppressive and disproportionate to benefits as to amount to arbitrary discrimination and confiscation repugnant to the Fourteenth Amendment. P. 294 U. S. 99.

6. A chain of stores is a distinctive business species, with its own capacities and functions; broadly speaking, its opportunities and powers become greater with the number of the component links, and the greater they become, the more far-reaching are the economic and social consequences. P. 294 U. S. 100.

7. For that reason, the State may tax large chains more heavily, upon a graduated basis, and it may make the tax so heavy as to discourage multiplication of units and, by the incidence of the burden, develop other forms of industry. P. 294 U. S. 100.

8. The graduated tax law being uniform in its application to chains of gasoline stations and chains of other stores, the fact that the tax

Page 294 U. S. 88

burden falls very largely on the former chains, because of the great multiplication of their units, does not render the classification arbitrary. P. 294 U. S. 101.

9. The West Virginia graduated tax on stores does not violate § 1 of Art. 10 of the West Virginia Constitution, which requires that taxation shall be equal and uniform throughout the State. P. 294 U. S. 102.

6 F.Supp. 494 reversed.

Appeal from a decree of the District Court, constituted of three judges, enjoining the Tax Commissioner of West Virginia from paying into the state treasury a sum of money exacted by him, and paid to him under protest, as license taxes on a chain of filling stations owned by the plaintiff Oil Company. The decree also commanded that the money be repaid to the plaintiff.

Page 294 U. S. 91

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