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� per gallon tax on gasoline purchased there. [
Footnote 6] However, in 1937 and thereafter
appellant refused to pay the flat $10 fee imposed by § 3847.16(a)
and the $15 minimum "gross revenue" tax laid by § 3847.27. In
consequence, after hearing on order to show cause, the appellee
Page 332 U. S. 499
board [
Footnote 7] in 1939
revoked the 1935 permit and brought this suit in a state court to
enjoin appellant from further operations in Montana.
Upon appellant's cross-complaint, the trial court issued an
order restraining the board from enforcing the "gross revenue" tax
laid by § 3847.27. But at the same time it enjoined appellant from
operating in Montana until it paid the fees imposed by §
3847.16(a). On appeal, the state supreme court held both taxes
applicable to interstate as well as intrastate motor carriers and
construed the term "gross operating revenue" in § 3847.27 to mean
"gross revenue derived from operations in Montana." [
Footnote 8] It then sustained both taxes as
against appellant's constitutional objections, state and federal.
Accordingly, it reversed the trial court's judgment insofar as the
"gross revenue" tax had been held invalid, but affirmed the
decision relating to the flat $10 tax. Mont., 172 P.2d 452,
460.
We put aside at the start appellant's suggestion that the
Supreme Court of Montana has misconstrued the state statutes and
therefore that we should consider them, for purposes of our limited
function, according to appellant's view of their literal import.
The rule is too well settled to permit of question that this Court
not only accepts, but is bound by, the construction given to
Page 332 U. S. 500
state statutes by the state courts. [
Footnote 9] Accordingly, we accept the state court's
rulings, insofar as they are material, that the two sections apply
alike to interstate and intrastate commerce and that "gross
operating revenue" as employed in § 3847.27 comprehends only such
revenue derived from appellant's operations within Montana, not
outside that state. [
Footnote
10]
Moreover, since Montana has not demanded or sought to enforce
payment by appellant of more than the flat $15 minimum fee for
class C carriers under § 3847.27, [
Footnote 11] we limit our consideration of the so-called
"gross revenue" tax to that fee. This too is in accordance with the
state supreme court's declaration:
"Even if it be admitted
Page 332 U. S. 501
that the manner of arriving at a sound basis upon which the tax
on gross revenue [should be calculated] is not provided by the
statute, a contention to which we do not agree, no difficulty would
arise in putting into effect the minimum fee of $15.00 required for
each company vehicle operated within the state. [
Footnote 12]"
Although the state court did not concede that the statute
comprehended no workable or sound basis for calculating the tax
above the minimum, we take this statement as a clear declaration
that it would sustain the minimum charge even if, for some reason,
the amount of the tax above the minimum would have to fall.
With the issues thus narrowed, we have, in effect, two flat
taxes -- one for $10, the other for $15 -- payable annually upon
each vehicle operated on Montana highways in the course of
appellant's business, with each tax expressly declared to be in
addition to all others and to be imposed "in consideration of the
use of the highways of this state."
Neither exaction discriminates against interstate commerce. Each
applies alike to local and interstate operations. Neither
undertakes to tax traffic or movements
Page 332 U. S. 502
taking place outside Montana or the gross returns from such
movements or to use such returns as a measure of the amount of the
tax. Both levies apply exclusively to operations wholly within the
state or the proceeds of such operations, although those operations
are interstate in character.
Moreover, it is not material to the validity of either tax that
the state also imposes and collects the vehicle registration and
license fee and the gallonage tax on gasoline purchased in Montana.
The validity of those taxes neither is questioned nor well could
be.
Hendrick v. Maryland, 235 U.
S. 610;
Aero Transit Co. v. Georgia Commission,
295 U. S. 285;
Sonneborn Bros. v. Cureton, 262 U.
S. 506;
Edelman v. Boeing Air Transport,
289 U. S. 249. Nor
does their exaction have any significant relationship to the
imposition of the taxes now in question.
Dixie Ohio Co. v.
Commission, 306 U. S. 72,
306 U. S. 78;
Interstate Busses Corporation v. Blodgett, 276 U.
S. 245,
276 U. S. 251.
They are imposed for distinct purposes and the proceeds, as
appellant concedes, are devoted to different uses, namely, the
policing of motor traffic and the maintenance of the state's
highways. [
Footnote 13]
Concededly, the proceeds of the two taxes presently involved are
not allocated to those objects. [
Footnote 14] Rather, they now go into the state's general
fund subject to appropriation for general state purposes. [
Footnote 15] Indeed, this fact, in
appellant's view, is the vice of the statute. But, in that
Page 332 U. S. 503
view, appellant misconceives the nature and legal effect of the
exactions. It is far too late to question that a state,
consistently with the commerce clause, may lay upon motor vehicles
engaged exclusively in interstate commerce, or upon those who own
and so operate them, a fair and reasonable nondiscriminatory tax as
compensation for the use of its highways.
Hendrick v. Maryland,
supra; Clark v. Poor, 274 U. S. 554;
Aero Transit Co. v. Georgia Commission, supra; Morf v.
Bingaman, 298 U. S. 407;
Dixie Ohio Co. v. Commission, supra; Clark v. Paul Gray,
Inc., 306 U. S. 583;
cf. South Carolina Highway Department v. Barnwell Bros.,
303 U. S. 177.
Moreover "common carriers for hire, who make the highways their
place of business, may properly be charged an extra tax for such
use."
Clark v. Poor, supra, at
274 U. S.
557.
The present taxes, on their face, are exacted "in consideration
of the use of the highways of this state" -- that is, they are laid
for the privilege of using those highways. And the aggregate amount
of the two taxes, taken together, is less than the amount of
similar taxes this Court has heretofore sustained.
Cf. Dixie
Ohio Co. v. Commission, supra; Aero Transit Co. v. Georgia
Commission, supra. The state builds the highways and owns
them. [
Footnote 16] Motor
carriers for hire, and particularly truckers of heavy goods, like
appellant, make especially arduous use of roadways, entailing wear
and tear much beyond that resulting from general indiscriminate
public use.
Morf v. Bingaman, supra, at
298 U. S. 411.
Although the state may not discriminate against or exclude such
interstate traffic generally in the use of its highways, this does
not mean that the state is required to furnish those facilities to
it free of charge or indeed on equal terms with other traffic not
inflicting similar destructive effects.
Cf. Clark v. Poor,
supra; Morf v. Bingaman, supra, at
298 U. S. 411.
Interstate traffic equally with
Page 332 U. S. 504
intrastate may be required to pay a fair share of the cost and
maintenance reasonably related to the use made of the highways.
This does not mean, as appellant seems to assume, that the
proceeds of all taxes levied for the privilege of using the
highways must be allocated directly and exclusively to maintaining
them.
Clark v. Poor, supra, at
274 U. S. 557;
Morf v. Bingaman, supra, at
298 U. S. 412.
That is true although this Court has held invalid, as forbidden by
the commerce clause, certain state taxes on interstate motor
carriers because laid "not as compensation for the use of the
highways, but for the privilege of doing the interstate bus
business."
Interstate Transit, Inc. v. Lindsey,
283 U. S. 183,
283 U. S. 186;
cf. McCarroll v. Dixie Lines, 309 U.
S. 176,
309 U. S. 179.
Those cases did not hold that all state exactions for the privilege
of using the state's highways are valid only if their proceeds are
required to go directly and exclusively for highway maintenance,
policing, and administration. Both before and after the
Interstate Transit decision, this Court has sustained
state taxes expressly laid on the privilege of using the highways,
as applied to interstate motor carriers, declaring in each instance
that it is immaterial whether the proceeds are allocated to highway
uses or others.
Clark v. Poor, supra, at
274 U. S. 557;
Morf v. Bingaman, supra, at
298 U. S. 412.
[
Footnote 17]
Appellant therefore confuses a tax "assessed for a proper
purpose and . . . not objectionable in amount,"
Clark v. Poor,
supra, 274 U.S. at
274 U. S. 557
-- that is, a tax affirmatively laid for the privilege of using the
state's highways -- with a tax not imposed on that privilege, but
upon some other, such as the privilege of doing the interstate
business. Though necessarily related, in view of the nature of
interstate motor traffic, the two privileges are not identical, and
it is useless to confuse them or to confound a tax for the
privilege
Page 332 U. S. 505
of using the highways with one the proceeds of which are
necessarily devoted to maintaining them. Whether the proceeds of a
tax are used or required to be used for highway maintenance "may be
of significance," as the Court has said,
"when the point is otherwise in doubt, to show that the fee is
in fact laid for that purpose and is thus a charge for the
privilege of using the highways.
Interstate Transit, Inc. v.
Lindsey, supra. But where the manner of the levy, like that
prescribed by the present statute, definitely identifies it as a
fee charged for the grant of the privilege, it is immaterial
whether the state places the fees collected in the pocket out of
which it pays highway maintenance charges or in some other."
Morf v. Bingaman, supra, 298 U.S. at
298 U. S. 412.
[
Footnote 18]
The exactions in the present case fall clearly within the rule
of
Morf v. Bingaman and its predecessors in authority, and
therefore, like that case, outside the decisions in the
Interstate Transit and like cases. Both taxes are levied
"in consideration of the use of the highways of this state" -- that
is, as compensation for their use -- and bear only on the privilege
of using them, not on the privilege of doing the interstate
business. Moreover, the flat $10 fee laid by § 3847.16(a) is
further identified as one on the privilege of use by the fact
that,
"unlike the general tax in
Interstate Transit, Inc. v.
Lindsey, 283 U. S. 183, the levy of which
was unrelated to the use of the highways, grant of the privilege of
their use is by the present statute made conditional upon payment
of the fee."
Morf v. Bingaman, supra, at
298 U. S.
410.
The minimum so-called "gross revenue" fee, on the other hand, is
technically conditioned on the receipt of
Page 332 U. S. 506
such revenue from the operations within Montana. But the flat
minimum of $15 annually, which is all we have before us in the
shape the case has taken for the purposes of decision here, has
none of the alleged vices characteristic of gross income taxes
heretofore held to vitiate such taxes laid by the states on
interstate commerce. And appellant has advanced no tenable basis in
rebuttal of the legislative declaration that this tax, too, is
exacted in consideration of the use of the state's highways --
i.e., for the privilege of using them, not for that of
doing the interstate business. Here, as in
Morf v.
Bingaman, 298 U. S. 407,
298 U. S. 411,
"there is ample support for a legislative determination that the
peculiar character of this traffic involves a special type of use
of the highways," with enhanced wear, tear, and hazards laying
heavier burdens on the state for maintenance and policing than
other types of traffic create. It is to compensate for these
burdens that the taxes are imposed, and appellant has not sustained
its burden.
Clark v. Paul Gray, Inc., supra, at
306 U. S. 599,
and authorities cited, of showing that the levies have no
reasonable relation to that end. [
Footnote 19]
It is of no consequence that the state has seen fit to lay two
exactions, substantially identical, rather than combine them into
one, or that appellant pays other taxes
Page 332 U. S. 507
which in fact are devoted to highway maintenance. For the state
does not exceed its constitutional powers by imposing more than one
form of tax.
Interstate Busses Corporation v. Blodgett, supra;
Dixie Ohio Co. v. Commission, supra. And, as we have said, the
aggregate amount of both taxes combined is less than that of taxes
heretofore sustained. In view of these facts, there is not even
semblance of substance to appellant's contention that the taxes are
excessive.
Neither is there merit in its other arguments, which we have
considered, including those urging due process and equal protection
grounds for invalidating the levies.
The judgment of the Supreme Court of Montana is
Affirmed.
[
Footnote 1]
The section was enacted originally as Mont.Laws, 1931, c. 184, §
16. Textually, it is as follows:
"(a) In addition to all of the licenses, fees or taxes imposed
upon motor vehicles in this state, and in consideration of the use
of the public highways of this state, every motor carrier, as
defined in this act, shall at the time of the issuance of a
certificate and annually thereafter, on or between the first day of
July and the fifteenth day of July, of each calendar year, pay to
the board of railroad commissioners of the state of Montana the sum
of ten dollars ($10.00), for every motor vehicle operated by the
carrier over or upon the public highways of this state. . . ."
In further relation to issuance of the permit,
see
note 5
[
Footnote 2]
This section originally was Mont.Laws, 193 , c. 100, § 2. It
reads as follows:
"In addition to all other licenses, fees, and taxes imposed upon
motor vehicles in this state and in consideration of the use of the
highways of this state, every motor carrier holding a certificate
of public convenience and necessity issued by the public service
commission, shall between the first and fifteenth days of January,
April, July, and October of each year, file with the public service
commission a statement showing the gross operating revenue of such
carrier for the preceding three months of operation, or portion
thereof, and shall pay to the board a fee of one-half of one
percent of the amount of such gross operating revenue; provided,
however, that the minimum annual fee which shall be paid by each
class A and class B carrier for each vehicle registered and/or
operated under the provisions of the motor carrier act shall be
thirty dollars ($30.00) and the minimum annual fee which shall be
paid by each class C carrier for each vehicle registered and/or
operated under the motor carrier act shall be fifteen dollars
($15.00)."
Section 3847.2, Rev.Codes Mont. (1935), contains the definitions
of the three classes of carriers.
[
Footnote 3]
The moneys in the motor carrier fund were subject to
appropriation for use in supervision and regulation of many
activities other than those connected with the public highways.
See Rev.Codes Mont. (1935), §§ 3847.17, 3847.28, and
cf. note 13
[
Footnote 4]
Appellant's answer and cross-complaint set forth statistics
concerning its use of Montana highways during the years 1937, 1938,
and 1939. The figures show appellant's equipment operating on
Montana highways during 227 days in 1937, 385 trucking days in
1938, and 405 trucking days in 1939.
See also note 6
[
Footnote 5]
The statute was Mont.Laws, 1931, c. 184, § 23, now Rev.Codes
Mont. (1935), § 3847.23. The section applied the act of which it
was a part to interstate and foreign commerce "insofar as such
application may be permitted under the provisions of" the Federal
Constitution, treaties and acts of Congress, but expressly exempted
interstate carriers from making "any showing of public convenience
and necessity" in order to secure the certificate or permit.
[
Footnote 6]
These taxes were imposed separately from the two involved in
this case. Appellant's brief states the registration and license
plate fees increased from $660.50 in 1937 to $1,212.50 in 1938 and
to $1,630.50 in 1939. The gasoline tax increased from $745.30 in
1937 to $1,257.90 in 1938 and $1,649.98 in 1939. The gallonage tax,
though ultimately borne by the consumer, was laid on the sale and
collected from the dealer.
[
Footnote 7]
It should be noted that "the board of railroad commissioners,"
as used in § 3847.16(a), and "the public service commission," as
used in § 3847.27, designate a single body, invested with
regulatory power over various public utilities in addition to motor
carriers,
e.g., railroads, common carriers of oil, etc. By
Rev.Codes Mont. (1935), § 3880, "The board of railroad
commissioners . . . shall be
ex officio the public service
commission hereby created. . . ." The two terms were said by the
Montana Supreme Court in this case to be "used interchangeably."
172 P.2d 452, 461.
[
Footnote 8]
This judicial construction was embodied in an amendment to the
section made by Mont.Laws, 1947, c. 73, § 2.
[
Footnote 9]
Louisiana ex rel. Francis v. Resweber, 329 U.
S. 459;
Huddleston v. Dwyer, 322 U.
S. 232;
Minnesota v. Probate Court,
309 U. S. 270;
Morehead v. N.Y. ex rel. Tipaldo, 298 U.
S. 587;
cf. Erie R. Co. v. Tompkins,
304 U. S. 64.
[
Footnote 10]
Acting not only in the view that statutes are presumptively
constitutional and, if necessary, are to be so construed as to make
them so, the court noted that § 3847.16(b) expressly provides that,
when service "is rendered partly in this state and partly in an
adjoining state or foreign country," carriers "shall comply with
the provisions of this act" concerning "payment of
compensation" and making reports by showing "the total business
performed
within the limits of this state." (Emphasis
added.) Accordingly, it held that §§ 3847.27 and 3847.16 should be
read together, and the limitation of § 3847.16(b) "within the
limits of this state" thus became a part of § 3847.27 as well as §
3847.16(a). Mont., 172 P.2d 452, 460.
[
Footnote 11]
Appellant's vice-president and general manager, Wheating,
testified that, for purposes of applying § 3847.27, he had
calculated, for each of the years 1939 through 1942,
"the [gross] income for that operation of the load miles
operated
in Montana by using an average income per mile
figure based upon the probable load factor we would have had in
Montana."
(Emphasis added.) On this basis, the amount of the tax as
calculated at one-half of one percent quarterly was substantially
below the statutory minimum for each of the four years.
See note 19 These
figures apparently were reported to and accepted by the board as
the basis for its demands upon the taxpayer for the flat $15
minimum annual tax.
[
Footnote 12]
Mont., 172 P.2d 452, 460. Appellant had argued, as it does here,
that, even if the "gross revenue" tax is limited to revenue derived
from operations in Montana, it is nevertheless invalid for want of
any prescribed method on the face of the statute for ascertaining
or calculating the tax. The state court held that the statute by
necessary implication authorized the board to "adopt any fair and
reasonable mode of enforcement designed to effectuate the purposes
of the Act." Mont., 172 P.2d 452, 461. In view of our limitation of
the question before us, as stated in the text, we need not express
opinion concerning this ruling or any tax above the minimum
calculated in accordance with it.
Cf. note 11
In another connection, the state supreme court adverted to the
separability clause contained in § 3847.24 of the statute, though
not referring to it expressly in relation to the statement quoted
in the text.
[
Footnote 13]
See note 6 and text
It is admitted by the pleadings that the proceeds of he vehicle
registration and license tax and the gallonage tax are allocated to
the construction, repair and maintenance of state highways.
[
Footnote 14]
The board concedes in the brief filed here that the state
supreme court was in error in the statement that the revenue from
the two taxes presently in issue "is devoted to the building,
repairing and policing of such highways. . . ." 119 Mont. 118, 138,
172 P.2d 452, 462.
[
Footnote 15]
See note 3 and
text
[
Footnote 16]
It is immaterial that the state receives federal aid for state
road construction, a fact on which appellant places some
emphasis.
[
Footnote 17]
See note 18
infra, and text.
[
Footnote 18]
In
Clark v. Poor, 274 U. S. 554,
274 U. S. 557,
the Court stated:
"Since the tax is assessed for a proper purpose and is not
objectionable in amount, the use to which the proceeds are put is
not a matter which concerns the plaintiffs."
[
Footnote 19]
Appellant claims that the $15 minimum fee is unreasonable, since
it is roughly ten times greater than the tax that would be required
if the percentage standard provided in the statute were applied. To
accept appellant's position would mean that a state could never
impose a minimum fee, but would have to adjust its taxes to the
inevitable variations in the use of the highways made by various
carriers. The Federal Constitution does not require the state to
elaborate a system of motor vehicle taxation which will reflect
with exact precision every graduation in use. In return for the $15
fee, appellant can do business grossing $3,000 per vehicle annually
for operations on Montana roads. Appellant was not wronged by its
failure to make the full use of the highways permitted.
Aero
Transit Co. v. Georgia Commission, 295 U.
S. 285;
Morf v. Bingaman, 298 U.
S. 407;
cf. Kane v. New Jersey, 242 U.
S. 160.