1. A state use tax may constitutionally be imposed on gasoline
that has been imported and stored by an air transport company and
is drawn from the tanks to fill the airplanes that use it in
interstate commerce if the "use" to which the tax is applied is in
the withdrawal of the gasoline from the tanks and the placing of it
in the fuel tanks of the planes, before its use in interstate
transportation begins.
Nashville, C. & St.L. R. Co. v.
Wallace, 288 U. S. 249. P.
289 U. S.
251.
2. A possible interpretation of a state tax law which might
render it unconstitutional, but which has not been and may never be
adopted by the state taxing officers or the state courts, will not
be ruled upon in a suit in a federal court of equity to enjoin
collection of the tax. P.
289 U. S. 253.
61 F.2d 319 reversed.
Certiorari, 288 U.S. 595, to review the reversal of a decree
dismissing a bill to enjoin collection of a state tax.
MR. JUSTICE STONE delivered the opinion of the Court.
Respondent, a Washington corporation operating airplanes in
Wyoming, brought this suit in equity in the
Page 289 U. S. 250
District Court of Wyoming against petitioners, state tax
officials, and the Cities of Cheyenne and Rock Springs, to enjoin
the collection of a state excise tax levied upon the use of
gasoline by respondent within the state, as a violation of the
Commerce Clause of the Constitution. As respondent waived relief by
interlocutory injunction,
see Smith v. Wilson,
273 U. S. 388,
273 U. S. 391,
the case was tried before a single judge, who upheld the tax and
dismissed the case on the merits. 51 F.2d 130. On appeal, the Court
of Appeals for the Tenth Circuit reversed the decree and directed
that the petitioners be enjoined from assessing the tax on gasoline
procured by respondent by "purchases completed outside the Wyoming
and then brought into that state and used in its planes in
interstate commerce." 61 F.2d 319, 324. This Court granted
certiorari.
The statute
* levies a
"license tax of four cents per gallon . . . on all gasoline used or
sold in this State . . . for domestic consumption," and requires
every "wholesaler" engaged in the "sale or use of gasoline" within
the state to report to the state treasurer each month all the
gasoline "sold or used" by it in the state, and to pay the tax upon
it. Gasoline "exported or sold for exportation from the state" is
exempted from the tax. A "wholesaler" is defined as any person (1)
who
"imports or causes to be imported gasoline . . . for sale in the
state . . . to the jobber or consumer, or to the persons . . . who,
in turn, sell to the jobber or consumer,"
or (2) who "produces, refines, manufactures, blends or compounds
gasoline" in Wyoming "for use, sale or distribution in this state."
In addition, the statute provides that
"every person . . . who shall use any gasoline in this state
upon which the said tax has not been paid by any
Page 289 U. S. 251
wholesaler in this state,"
shall render a like statement and pay a like tax.
Respondent maintains an airplane service for the transportation
in interstate commerce of passengers, mail, and express with
airports at Cheyenne and Rock Springs. It purchases gasoline both
within and without the state, which it intermingles and stores in
tanks at the two airports. It pays the tax without objection on all
gasoline which it sells within the state at its airports or
withdraws from the tanks for local use. But it contends, and the
court below held, that the tax cannot validly be applied to the
gasoline imported from outside the state, stored in tanks at the
airports and used for "filling" the interstate airplanes in which
it is eventually consumed.
The opinion below leaves us uncertain whether the injunction was
granted upon the ground that the taxing statute does not, in any
event, apply to gasoline purchased without the state, if not sold
within it, or upon the ground that the taxation of gasoline
purchased outside the state and used at respondent's airports to
"fill" its interstate planes, though authorized by the statute, is
a prohibited burden on interstate commerce. But the bill of
complaint sought no relief on the ground that the statute does not
apply to the gasoline so used, and no question of the applicability
of the tax is argued here. Issue is joined on the only question
raised by the pleadings -- whether the taxation of the gasoline
which respondent withdraws from storage and uses for "filling" its
planes imposes an unconstitutional burden on interstate commerce.
Hence, we confine our decision to that question.
As the statute has been administratively construed and applied,
the tax is not levied upon the consumption of gasoline in
furnishing motive power for respondent's interstate planes. The tax
is applied to the stored gasoline as it is withdrawn from the
storage tanks at the airport and placed in the planes. No tax is
collected for gasoline
Page 289 U. S. 252
consumed in respondent's planes either on coming into the state
or on going out. It is at the time of withdrawal alone that "use"
is measured for the purposes of the tax. The stored gasoline is
deemed to be "used" within the state, and therefore subject to the
tax, when it is withdrawn from the tanks.
Compare Nashville,
Chattanooga & St. Louis Ry. v. Wallace, 288 U.
S. 249;
Gregg Dyeing Co. v. Query, 286 U.
S. 472;
Hart Refineries v. Harmon, 278 U.
S. 499;
Bowman v. Continental Oil Co.,
256 U. S. 642.
A state may validly tax the "use" to which gasoline is put in
withdrawing it from storage within the state, and placing it in the
tanks of the planes, notwithstanding that its ultimate function is
to generate motive power for carrying on interstate commerce. Such
a tax cannot be distinguished from that considered and upheld in
Nashville, Chattanooga & St. Louis Ry. v. Wallace,
supra. There, it was pointed out that
"there can be no valid objection to the taxation of the exercise
of any right or power incident to . . . ownership of the gasoline
which falls short of a tax directly imposed on its use in
interstate commerce, deemed forbidden in
Helson v.
Kentucky, 279 U. S. 245."
As the exercise of the powers taxed -- the storage and
withdrawal from storage of the gasoline -- was complete before
interstate commerce began, it was held that the burden of the tax
was too indirect and remote from the function of interstate
commerce to transgress constitutional limitations.
Despite the fact that the statute, as applied, is identical in
operation with that sustained in
Nashville, Chattanooga &
St. Louis Ry. v. Wallace, supra, respondent contends that, as
the statute is written, the tax is one on the consumption of
gasoline in propelling its airplanes in interstate commerce,
invalid under
Helson v. Kentucky, supra. In that case, a
Kentucky statute taxing the use of gasoline was applied to that
purchased and placed in the tanks of a ferry boat outside the state
for use in operating
Page 289 U. S. 253
it in interstate commerce. The tax, which was levied only with
respect to the gasoline consumed while the ferry boat was within
the state, was held to be invalid as, in effect, a direct tax on
the privilege of carrying on interstate commerce.
But the officers of Wyoming, charged with the enforcement of the
taxing statute, are giving no such application to it as was given
to that in
Helson v. Kentucky, supra, and it is not
suggested that they will. All that has been done or threatened by
them, under their interpretation of the statute, infringes no
constitutional right of the complainant. In the circumstances, no
case is presented, either by pleadings or proof, calling on a
federal court of equity to rule upon the correctness of some other
construction which may never be adopted by the state administrative
officials or by the state courts.
Reversed.
MR. JUSTICE VAN DEVANTER took no part in the consideration or
decision of this case.
* Wyoming Laws of 1929, c. 14, amending Laws of 1929, c. 139;
Laws of 1927, c. 70; Laws of 1925, c. 89; Laws of 1923, c. 73.