During the years at issue, West Virginia imposed a gross
receipts tax on wholesale sales of tangible property by
out-of-state producers, but not in-state producers. The State Tax
Commissioner upheld the tax assessed on sales by appellant National
Mines Corp., rejecting National's claim that the tax was
unconstitutional. Before National filed an appeal in the State
Circuit Court, this Court, in
Armco, Inc. v. Hardesty,
467 U. S. 638,
invalidated the State's tax scheme as discriminatory against
interstate commerce. After the State Supreme Court of Appeals
ruled, in another case, that
Armco did not apply
retroactively, the Circuit Court upheld the State's collection of
the assessed taxes.
Held: For the reasons stated in
Ashland Oil, Inc.
v. Carlyl, ante p.
497 U. S. 916,
Armco applies retroactively to the taxes assessed against
National.
Certiorari granted; reversed and remanded.
PER CURIAM.
Petitioner National Mines Corp. (National) is principally
engaged in the business of producing and selling coal. Among its
other activities, National mines coal in Kentucky and Pennsylvania
and sells it wholesale in West Virginia. During the period relevant
here, West Virginia imposed a gross receipts tax on wholesale sales
of tangible property. W.Va.Code § 11-13-2c (1983). Local producers
were subject to taxes on their production activities, but exempt
from the tax on wholesale activities. § 11-13-2.
On December 22, 1980, the State Tax Department of West Virginia
assessed $475,345.02 in business and occupation tax (plus interest
and penalties) for the period January 1, 1975, through December 31,
1979, on National's wholesale sales of coal in West Virginia.
National filed a petition for reassessment, asserting that the tax
violated the Due Process Clause
Page 497 U. S. 923
of the Fourteenth Amendment and the Commerce Clause of the
Federal Constitution. The State Tax Commissioner upheld the
assessment, concluding that the tax was fairly apportioned, that
the measure of the tax was reasonably related to the benefits
conferred by the State, and that the tax did not discriminate
against interstate commerce.
A few days before National appealed to the State Circuit Court,
this Court issued its opinion in
Armco Inc. v. Hardesty,
467 U. S. 638
(1984), which held that the West Virginia business and occupation
tax sought to be collected from petitioner was unconstitutional.
National's action was held in abeyance while the West Virginia
Supreme Court of Appeals considered a similar challenge to the
state tax in light of
Armco. See Ashland Oil, Inc. v.
Rose, 177 W.Va. 20,
350 S.E.2d
531 (1986). After analyzing the retroactivity of
Armco
under a state law test that it considered to "follow closely the
analysis employed by the United States Supreme Court in
Chevron
Oil Co. v. Huson, 404 U. S. 97,
404 U. S.
106-107 (1971),"177 W.Va. at 23, n. 6, 350 S.E.2d at
534, n. 6, the court concluded that
Armco applied
prospectively only. The State Supreme Court thus permitted the
State to collect the gross receipts taxes due for fiscal years
prior to the date of decision in
Armco. Id. at
25-26, 350 S.E.2d at 536-537.
The State Circuit Court in this case followed
Ashland
Oil to uphold the State's collection of the assessed taxes.
The West Virginia Supreme Court of Appeals refused to consider
National's petition for appeal.
In its petition for certiorari to this Court, National contends,
among other claims, that the state court erred in following
Ashland Oil's nonretroactivity decision and allowing the
State to enforce an unconstitutional tax statute. We agree. For the
reasons stated today in
Ashland Oil, Inc. v. Carlyl, ante
p.
497 U. S. 916, we
hold that
Armco applies retroactively under the reasoning
of either the plurality or the dissent in
American
Trucking Assns., Inc. v. Smith, 496 U.
S. 167
Page 497 U. S. 924
(1990). Because the State Circuit Court failed to consider the
constitutionality of the taxes assessed against National in light
of our decision in
Armco, we grant the petition for
certiorari, reverse the judgment of the State Circuit Court, and
remand for further proceedings not inconsistent with this
opinion.
It is so ordered.