1.Laws of Iowa, 42 General Assembly, c. 103, § 1, imposing an
additional tax per gallon on motor vehicle fuel imported and
used
Page 292 U. S. 87
within the State,
held consistent with provisions of
the Iowa Constitution respecting title and substance of taxing
laws. P.
292 U. S.
93.
2. A State may impose a tax on the local use of gasoline
imported from without and collect it by requiring the importing
distributor to report the amounts of his importations, account to
the State for the corresponding taxes, as collecting agent of the
State, and pass on the tax burden to consumers by adding it to the
selling price. P.
292 U. S.
93.
3. No unlawful burden on interstate commerce results from the
circumstance that, in the application of this method of collection,
the distributor may make preliminary payments in respect of
imported gasoline which he intends at the time to export, or which
he may afterwards in fact export, from the State, where, as in this
case, he is entitled to a refund of such payments. P.
292 U. S.
94.
4. The Iowa statute here involved obviously was not intended to
reach transactions in interstate commerce, but to tax the use of
motor fuel after it had come to rest in Iowa, and the requirement
that the distributor as the shipper into Iowa shall, as agent of
the State, report and pay the tax on the gasoline thus coming into
the State for use by others on whom the tax falls, imposes no
unconstitutional burden either upon interstate commerce or upon the
distributor. P.
292 U. S.
95.
5. A distributor of gasoline, in being required to prepay to the
State the taxes that are ultimately to be passed on to and paid by
those who buy the gasoline for local consumption as motor vehicle
fuel, is not himself taxed, but is merely made a collecting agency,
and has no ground for alleging that he is deprived of equal
protection of the laws by a statutory provision under which the
tax, when paid on gasoline consumed for other uses, not taxed, is
refunded to the consumer by the State. P.
292 U. S.
95.
6. Code of Iowa, c. 241-B1, 4755-b38, laying an additional tax
on all motor fuel imported and used within the State, applies to
gasoline manufactured within the State, as well as to that which is
imported. P.
292 U. S.
96.
7. One who has not sustained and is not threatened with injury
from a statute cannot complain of an alleged discrimination arising
from it. P.
292 U. S.
96.
8. Revocation without notice or hearing of a license to
distribute gasoline, required by the Iowa law,
held not a
taking of property, in the absence of any penalty for doing
business unlicensed and of any threat of other injury to the
licensee. P.
292 U. S.
97.
Page 292 U. S. 88
9. In a suit to restrain State officers from enforcing a taxing
statute, a federal court has no jurisdiction to enjoin the
prosecution of a prior action in a state court for collection of
taxes under such statute. Jud.Code, § 265. P.
292 U. S.
97.
3 F. Supp. 189 affirmed.
Appeal from a decree of the District Court, of three judges,
dismissing a bill seeking to restrain the Treasurer, Attorney
General, and other officials of the State of Iowa. Questions under
the State and Federal Constitutions were involved, and diverse
citizenship was alleged.
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The appellant filed a bill in the District Court for Southern
Iowa, seeking a declaration that the laws of Iowa laying a tax on
motor vehicle fuel violate state and federal constitutional
provisions, and an injunction against their enforcement by state
officers. A temporary injunction issued, but a court of three
judges, upon final hearing, dismissed the suit. [
Footnote 1] The case is here on direct
appeal.
The General Assembly of the State, in order to raise revenue for
the improvement of highways, imposed a license fee of two cents per
gallon on all motor vehicle fuel "used or otherwise disposed of in
this state for any purpose whatsoever;" and directed that
"Any person using motor vehicle fuel within the State shall be
liable for the fee herein provided for unless the same shall
have
Page 292 U. S. 89
been previously paid. [
Footnote
2]"
By a later statute, an additional license fee of one cent per
gallon was imposed. [
Footnote
3] The law defines "distributor" as
"any person who brings into the state or who produces, refines,
manufactures or compounds within the state any motor vehicle fuel
to be used within the state or sold or otherwise disposed of by him
within the state for use in the state."
"Person" is defined to include partnerships, corporations, and
associations. One who sells at retail is required to keep posted in
a public place a placard showing the total sale price per gallon,
including license fee, and to have printed on the placard the
words, "state license fee included." It is declared unlawful to
conduct the business of a distributor unless a certificate giving
certain information is filed with the state treasurer and a license
is procured permitting the conduct of that business. Every
distributor is required, on or before the twentieth day of each
calendar month, to file with the state treasurer a report showing
the total number of gallons imported by him during the preceding
calendar month, with details as to each shipment, and at the same
time to remit to the treasurer the amount of the license fee for
such preceding month; he may, however, deduct three percent of the
gallonage for evaporation and loss. If, after the fee is remitted,
the fuel is destroyed by casualty not due to the fault of the
distributor, before being sold or used, a refund of the tax
paid
Page 292 U. S. 90
thereon is to be made by the state treasurer. The act declares
that its provisions are not to apply to foreign or interstate
commerce. As distributors import gasoline into Iowa for reshipment
to other states, the state treasurer has, in the administration of
the acts, permitted a deduction in the monthly reports of any
gasoline so sold and reshipped to points outside the state.
There is provision that one using fuel purchased for a purpose
other than for a motor vehicle may, upon making claim upon the
state treasurer in proper form and in due time, obtain a refund of
the amount of the tax paid in respect of it.
A penalty of ten percent of the amount of the tax is imposed
upon a distributor who fails to remit on or before the twentieth of
the month following the importation. The Attorney General is
empowered to bring action on behalf of the state against any
distributor who is in default for thirty days in payment of tax.
The state treasurer is authorized to revoke the license of a
distributor who fails to render the prescribed reports, or renders
a false report, or fails to pay the license fee when due, and he
need not renew the license until satisfied that the applicant will
in future comply with the law. Distributors are required to permit
inspection of their books, records, papers, invoices, and
equipment. It is made a misdemeanor for a distributor or any
principal officer to refuse to submit the prescribed reports and
certificates to the treasurer, or to refuse an examination of
books, records, and equipment by the treasurer or his
representatives, or to violate other provisions. [
Footnote 4]
The appellant is an Arizona corporation whose business is the
buying, manufacturing, blending, and selling of gasoline and
kindred products, including the importation into Iowa of gasoline
by tank cars, trucks, and other containers,
Page 292 U. S. 91
for resale to consumers and to dealers who sell to consumers,
and the exportation of gasoline to other states; the maintenance of
storage facilities in Iowa, from which deliveries are made in that
and other states, and the maintenance of a refinery at Carter Lake,
Iowa, where gasoline is blended and compounded and shipped to
points in Iowa and other states. Prior to April, 1932, gasoline was
refined at this plant. The corporation maintains numerous service
stations in Iowa which sell to consumers. Upon the filing of a
certificate with the state treasurer, the company received a
distributor's license, and, between May, 1927, and May, 1932, paid
to the state treasurer monthly, in accordance with the reports
rendered, many thousand dollars as license fees. There was included
in the amount so reported and paid a tax at the rate of three cents
per gallon on gasoline imported into Iowa and gasoline refined and
manufactured at the refinery at Carter Lake. No question seems to
have been raised as to the applicability and validity of the
statute until about May, 1932. At that time, a controversy arose
out of the following facts:
Carter Lake, Iowa, where the appellant's refinery is located,
now lies on the west shore of the Missouri river, not far from
Omaha, Neb. It was originally on the east side of the river, the
interstate boundary. By an avulsion, the stream changed its course
to the east of Carter Lake, but the old bed remained the interstate
boundary. The refinery ships large quantities of gasoline to points
in Nebraska and also to points in Iowa. The question arising
whether the appellant should report gasoline which was ultimately
distributed in Iowa upon its arrival at Carter Lake, or its
manufacture there, or when it was shipped from Carter Lake to other
points in Iowa, the state treasurer and the appellant agreed that
importations into Carter Lake need not be treated as
importations
Page 292 U. S. 92
into Iowa, but, when gasoline arriving at Carter Lake or there
manufactured should be shipped to other points in Iowa, it should
be treated as then imported into the state for the purpose of
report and payment of the tax by the appellant. This arrangement
was made for the convenience of the parties.
Prior to May, 1932, the appellant shipped forty tank cars of
gasoline from the refinery at Carter Lake to destinations in Iowa,
for sale and use there. Its employees and agents altered the
invoices and waybills on these shipments so as to show "gas-oil"
instead of gasoline, and omitted to report them to the state
treasurer, or to pay tax upon them, as should have been done in
accordance with the arrangement mentioned. When the state treasurer
called appellant's attention to the falsification of its reports,
the representatives of the company for the first time asserted
that, as gasoline moving from Carter Lake to other points in Iowa
had to pass through Nebraska the shipments were interstate, and a
tax on them would be a burden upon interstate commerce. The state
treasurer, having confirmed the facts by an audit of the company's
books, caused the appellant and certain of its officers to be
indicted for making a false return, procured the Attorney General
to bring a civil action against the appellant by attachment to
recover the unpaid tax on gasoline imported and used within the
state, and notified the appellant that he had revoked its license
as a distributor. The individual defendants pleaded guilty and were
fined, and the indictment was dismissed as to the company. The
civil suit was pending when the present bill was filed, asserting
the invalidity of the law and praying that the state treasurer and
other officials be enjoined from interfering with the conduct of
appellant's business as a distributor, from collecting the taxes
imposed by the statutes, and from prosecuting the civil action in
the state court.
Page 292 U. S. 93
The District Court, whose jurisdiction was invoked by reason of
diversity of citizenship as well as the alleged conflict of the
state statutes and the Federal Constitution, dismissed the bill.
The decision is challenged for several reasons, but we are of
opinion that it was proper.
1. The amendatory act by which an additional tax of one cent per
gallon was imposed is said to violate provisions of the Iowa
Constitution respecting the title and the substance of taxing laws.
The District Court examined these contentions and found them
without merit. We concur in its conclusions.
2. There is no substance in the claim that the statutes impose a
burden upon interstate commerce, contrary to the prohibition of
Article I, § 8, cl. 3, of the Federal Constitution. The appellant
insists that the tax is a direct tax on motor vehicle fuel
imported. The court below concluded that the law laid an excise
upon the use of fuel for the propulsion of vehicles on the highways
of the state. The state officials have administered the tax on this
theory. We think this the correct view. The levy is not on
property, but upon a specified use of property.
Altitude Oil
Co. v. People, 70 Colo. 452, 202 P. 180;
Standard Oil Co.
v. Brodie, 153 Ark. 114, 293 S.W. 753. It is not laid upon the
importer for the privilege of importing (
compare 25 U.
S. Maryland, 12 Wheat. 419;
Bowman v.
Continental Oil Co., 256 U. S. 642,
256 U. S.
647), but falls on the local use after interstate
commerce has ended.
Compare Sonneborn Bros. v. Cureton,
262 U. S. 506;
Nashville, C. & St.L. Ry. Co. v. Wallace, 288 U.
S. 249;
Edelman v. Boeing Air Transport, Inc.,
289 U. S. 249. The
statute in terms imposes the tax on motor vehicle fuel used or
otherwise disposed of in the state. Instead of collecting the tax
from the user through its own officers, the state makes the
distributor its agent for that purpose. This is a common and
entirely lawful arrangement.
Citizens'
Page 292 U. S. 94
National Bank v. Kentucky, 217 U.
S. 443,
217 U. S. 454;
Pierce Oil Corp. v. Hopkins, 264 U.
S. 137;
Standard Oil Co. of Louisiana v. Brodie,
supra; Standard Oil Co. v. Jones, 48 S.D. 482, 205 N.W. 72.
The distributor who reports the gasoline and pays the tax is
required to pass the burden on to the consumer, who is advised that
in addition to the price of the gasoline he is paying a license fee
to the state. To prevent evasion, the distributor must pay and pass
on the tax on all gasoline imported or distributed, irrespective of
its ultimate use; but, as some purchasers employ the gasoline for a
purpose other than the propulsion of a motor vehicle, and as the
burden of the tax has been passed on to them as well as those who
desire a motor fuel, provision is made for a refund to the former.
Since the law declares that the levy is only upon use of motor
vehicle fuel in the state, and the intent is not to affect
interstate commerce, the state treasurer properly permits
distributors to deduct as a credit from the gasoline returned as
imported into the state in any calendar month that which has been
exported from the state by the distributor. Thus, gasoline passing
through the state to reach its ultimate destination is exempt. It
is, of course, true that, as the report is required on the
twentieth of the calendar month for transactions of the preceding
month, there may at times be gasoline received in the month covered
by the report which has not been exported by the twentieth of the
succeeding month; but the distributor is entitled to a credit for
such exportation in his report made in the next month, and the mere
fact that he cannot claim an anticipatory credit for gasoline not
yet exported, but intended so to be, seems to us to be too slight a
burden to be of any moment, or to raise a substantial
constitutional question.
The appellant, however, says that the state officials have
required it to report and to pay tax on shipments made from
Oklahoma direct to dealers in Iowa who are
Page 292 U. S. 95
appellant's customers, and that, in respect of such
transactions, the burden on interstate commerce is obvious. But if
the gasoline so imported is intended to be used in Iowa for motor
vehicle fuel, it is subject to the tax. If it is not so used by the
appellant's customer, or by the purchaser at retail, either may
obtain a refund of the tax collected by the appellant and remitted
to the state. The statute obviously was not intended to reach
transactions in interstate commerce, but to tax the use of motor
fuel after it had come to rest in Iowa, and the requirement that
the appellant as the shipper into Iowa shall, as agent of the
state, report and pay the tax on the gasoline thus coming into the
state for use by others on whom the tax falls imposes no
unconstitutional burden either upon interstate commerce or upon the
appellant.
3. The method of imposition and collection of the tax does not
deny the equal protection of the laws guaranteed by the Fourteenth
Amendment. Complaint is made of several features of the law which
are said to create arbitrary discriminations. Appellant first says
that, as it must pay to the state a tax of three cents on every
gallon of gasoline imported, whereas the user who employs the
gasoline purchased for some other purpose than motor fuel may
obtain a refund of the tax paid in respect of the fluid so used,
the law attempts to impose a tax on the distributor for the benefit
of persons who buy or use gasoline for some purpose other than the
operation of a motor vehicle on the highways, and that the result
is the imposition on the distributor of a tax for the benefit of
this other class of persons.
The short answer to the contention is that the statutes,
properly construed, lay no tax whatever upon distributors, but make
of them mere collectors from users of motor vehicle fuel, and
refund the tax only to that class of users upon whom no excise is
intended to be laid. The distributor
Page 292 U. S. 96
does not pay the tax; the user does. It cannot, therefore, be
said that any tax is laid upon the appellant in ease of another
class of taxpayers.
The amendatory act, levying an additional cent per gallon, is
said to discriminate against the appellant because, if gasoline
were distilled or manufactured in Iowa, it would escape taxation,
since the amendatory statute refers only to gasoline "imported and
used" within the state. This statute is, however, an amendment or
supplement to the earlier act taxing use and disposition of
gasoline for motor fuel (
see State v. Northern Iowa Oil
Co., 209 Iowa, 980; 229 N.W. 214), embodies by reference
provisions of the earlier law (
see note 3 supra), and, as the District Court
held, is therefore to be construed to cover gasoline whether
imported or manufactured within the state. It appears, moreover,
that no gasoline is or has been distilled or manufactured in Iowa
except that which was distilled or manufactured by appellant prior
to April 1, 1932. Since that date, the appellant has not distilled
or manufactured gasoline within the state. The appellant is not in
a position to complain of any alleged discrimination arising from
the terms of the statute, since it has not sustained injury and
none is threatened which can affect it.
It is asserted that naptha imported into Iowa and blended may
escape the tax on the ground that it is not motor vehicle fuel
imported into Iowa. The evidence, however, discloses that the
officers charged with the administration of the law are insisting
that the tax should be paid on naphtha so imported and blended, and
in fact are now prosecuting a suit against another defendant on
this theory. No reason appears why, even if such naphtha were held
free of tax, this would constitute an unfair discrimination against
appellant, which is required to collect from users the tax on
gasoline.
Page 292 U. S. 97
4. The revocation of the appellant's license by the state
treasurer without notice and hearing did not deprive it of property
without due process in violation of the Fourteenth Amendment.
Whether, in other circumstances, the license contemplated by the
statutes under consideration might be considered property within
the protection of the due process clause we need not determine. It
is sufficient in this case to advert to the undisputed facts
disclosed by the record. The law Imposes no penalty for conducting
the business of a distributor without a license; the only penalties
mentioned are for failure to report gasoline intended for use in
the state, and to pay the tax. The state officers have not sought
to prevent the appellant from continuing its business as a
distributor, and have in this proceeding, both by answer and by
evidence, avowed their purpose to take no further action against
the appellant, either criminal or civil, until the conclusion of
the civil suit now pending in a state court to recover the tax, the
failure to pay which was the ground of revocation of the
appellant's license. The state's officials are prosecuting the
action as a test suit. There is therefore no threat of immediate
harm as a result of the revocation of the license, and the action
of the state treasurer in revoking it cannot affect the pending
civil suit or any other action civil or criminal which may
hereafter be brought.
5. By its bill, the appellant asked an injunction against the
further prosecution of the action at law in the state court for the
failure to report and to pay tax on certain gasoline. The court
below pointed out that § 265 of the Judicial Code (U.S.C. Tit. 28,
§ 379) forbids the granting of this prayer, and the appellant
admitted at the bar that it could not have such relief and did not
insist upon it.
We find no error in the decision of the District Court, and its
judgment must be affirmed.
[
Footnote 1]
3 F. Supp. 189.
[
Footnote 2]
Acts 41st General Assembly c. 6, § 1, as amended by Acts 42d
General Assembly c. 248, § 1; Code of Iowa of 1931, c. 251-A1, §
5093-a1.
[
Footnote 3]
"There is hereby levied on all motor vehicle fuel imported and
used within this state a license fee of one cent per gallon, which
shall be in addition to the license fee levied by chapter 251-A1.
All of the provisions and conditions of said chapter 251-A1
relating to the levy, collection or payment of the license fee on
motor vehicle fuel shall apply with equal force to the license fee
levied herein. . . ."
Acts 42d General Assembly c. 103, § 1; Code of Iowa, 1931, c.
241-B1, § 4755-b38.
[
Footnote 4]
Code of Iowa, 1931, Chapter 251-A1.
See also §
4755-b38.