# United Air Lines, Inc. v. Mahin/Dissent Douglas

* Court Documents
* Case Syllabus
* Opinion of the Court
* Dissenting Opinions Douglas White
[p632] MR. JUSTICE DOUGLAS, with whom MR. JUSTICE STEWART and MR. JUSTICE WHITE concur, dissenting.
The Court today makes a break with the history of the Commerce Clause that has been largely responsible for creating in this Nation a great common market. One [p633] protective device this Court has used to keep the national channels of commerce open against hostile state legislation has been the constitutional ban on state taxation levied on interstate activities. In 1873, in Case of State Freight Tax, 15 Wall. 232, we held unconstitutional a state tax "so far as it applies to articles... taken up in the State and carried out of it...." Id., at 282. While there are ways in which interstate commerce can be required to pay its way, we have not until today abandoned the basic principle that a State may not tax interstate activities. That is what is done here, for the Illinois tax is levied on filling the fuel tanks of airplanes taking off for interstate or foreign journeys. If Illinois can tax that segment of the interstate activity, there is no reason why she may not tax the takeoff itself. The filling of fuel tanks to make an interstate or foreign journey is as indispensable a part and parcel of the interstate or foreign journey as using the runways for that purpose.
The Supreme Court of Illinois sustained the Illinois Use Tax on all aviation fuel loaded aboard United's interstate and foreign flights departing from Chicago. United purchases fuel outside Illinois and stores it in Illinois temporarily for its interstate and foreign operations. The use tax exempts from the tax property purchased outside Illinois, temporarily stored in the State, and used solely outside the State.
Until 1963 the temporary storage exception was construed by the Illinois Department of Revenue so as to subject to the use tax only that fuel loaded on departing flights that was actually burned over Illinois. In 1963 the Department changed its prior ruling and announced:
   "[T]emporary storage ends and a taxable use occurs when the fuel is taken out of storage facilities [p634] and is placed into the tank of the airplane, railroad engine or truck. At this point, the fuel is converted into its ultimate use, and, therefore, a taxable use occurs in Illinois."
The Supreme Court of Illinois upheld that construction and application of the use tax against the claim that it violates the Commerce Clause, saying that United's storage becomes something more than temporary storage for safekeeping "prior to its use solely outside of Illinois." 49 Ill.2d 45, 55, 273 N.E.2d 585, 590.
The taxable event is the act of loading the fuel aboard United's aircraft in Illinois preparatory to their interstate or foreign journey. The majority states that the Supreme Court of Illinois concluded that either the storage of the gasoline itself or the withdrawal therefrom is a use which may be taxed without offending the Federal Constitution. But that statement of the Supreme Court of Illinois was made in its discussion of the exemption from the use tax which, as relevant here, provides: "[T]he temporary storage, in this State, of tangible personal property which is acquired outside this State and which, subsequent to being brought into this State and stored here temporarily, is used solely outside this State." Ill. Rev. Stat., c. 120, § 439.3 (1971). That means that the temporary-storage exemption would extend, not merely to storage on the ground, but also to its loading aboard the transportation vehicles, such as trucks or railroad cars, and to its transportation from the State. It is thus obvious that, unless the means of removing the property from the State is included in the scope of the temporary storage, it would be a nullity, as appellant maintains. Since in this case, there is no tax if fuel is withdrawn from storage and taken from the State by other means, it is clear that neither the storage nor the removal from storage is what makes the fuel taxable. The majority properly notes that, as a matter of state [p635] law and the Illinois court's interpretation thereof, it is the "consumption" wholly without the State that makes the exception operable. Conversely, I read the Illinois opinion to mean that, as a matter of state law, it is at least partial consumption within the State that brings the tax on all the fuel into play. That is so even if only a small portion of the fuel is consumed within the State, while the remainder is consumed out of State during an interstate or foreign flight. The inescapable conclusion from the state court's interpretation of this state law is that the act of loading the fuel into the fuel tanks of the interstate aircraft solely for use of the motive power is the taxable event.
If that event were used to tax fuel used on an intrastate flight, no problem under the Commerce Clause would arise. But loading is part of the interstate activity when planes prepare for an interstate journey, just as loading is a part of the shipment of goods by rail or water interstate (Puget Sound Stevedoring Co. v. Tax Comm'n, 302 U.S. 90, 92-94; Joseph v. Carter & Weekes Stevedoring Co., 330 U.S. 422, 427, 433-434), and just as local pickups of parcels and local delivery of parcels in interstate movement are not permissible grounds "for a state license, privilege or occupation tax." Railway Express Agency v. Virginia, 347 U.S. 359, 368.
In Richfield Oil Corp. v. State Board, 329 U.S. 69, we held invalid a state sales tax levied on the delivery of fuel oil into a ship for overseas carriage. We said "[t]he incident which gave rise to the accrual of the tax was a step in the export process." Id., at 84. A like result was reached in Michigan-Wisconsin Pipe Line Co. v. Calvert, 347 U.S. 157, where a State sought to impose a severance tax on the transfer of gas from a refinery pipeline to an interstate pipeline. We noted that the "taxable incidence" was the taking of gas from a local plant "for the purpose of immediate interstate transmission." [p636] Id., at 161. We, therefore, held it unconstitutional, since it was a tax "on the exit of the gas from the State." Id., at 167.
The present tax is analogous to the tax on the privilege of carrying on an exclusively interstate business which we struck down in Spector Motor Service v. O'Connor, 340 U.S. 602, 608. A tax upon an integral part of interstate commerce is a tax that no State by reason of the Commerce Clause is empowered to impose, unless authorized by Congress. Id., at 608.
The fuel in United's planes propels the interstate flights; because it is the source of the motive power, it is essential to the interstate journey. It is, therefore, indisputably a part and parcel of the interstate movement. McCarroll v. Dixie Greyhound Lines, 309 U.S. 176, involved an Arkansas statute which prohibited any truck or automobile from entering the State with more than 20 gallons of gasoline in its tank unless an excise tax were paid on the gasoline. The Court held the tax unconstitutional because it imposed a tax on "gasoline to be immediately transported over the roads of Arkansas for consumption beyond." Id., at 180 (emphasis added). Similarly, Illinois imposes its tax on all of the fuel loaded into airplane tanks, whether or not that fuel is consumed out of State. In Helson v. Kentucky, 279 U.S. 245, on which the Illinois Supreme Court relied in disapproving the earlier construction of the statute, a ferry boat operated between Illinois and Kentucky, having its office in Illinois and buying all its fuel here. Kentucky sought to tax that portion of the fuel used in Kentucky. This Court invalidated the tax, saying it was "exacted as the price of the privilege of using an instrumentality of interstate commerce." Id., at 252. If that tax is invalid, it follows a fortiori that Illinois may not tax the movement of airplanes from Illinois to California, from Illinois to Europe, or from Illinois to any other out-of-state point.
[p637] It is now well settled that interstate commerce can be required to pay its way, Illinois Central R. Co. v. Minnesota, 309 U.S. 157; Western Live Stock v. Bureau of Revenue, 303 U.S. 250; Greyhound Lines v. Mealey, 334 U.S. 653; Northwestern Cement Co. v. Minnesota, 358 U.S. 450, a result commonly reached by formulae which allocate to the taxing State business derived from operations within the State. Railway Express Agency v. Virginia, 358 U.S. 434. Yet, when pieces or segments of an interstate business are taxed, our cases reveal discrimination in approving or disapproving taxes that may be imposed. A State may not exact a license tax for the privilege of carrying on interstate commerce. McGoldrick v. Berwind-White Co., 309 U.S. 33, 56-58; Murdock v. Pennsylvania, 319 U.S. 105, 112-113. As stated in Berwind-White, taxes "which are aimed at or discriminate against [interstate] commerce or impose a levy for the privilege of doing it, or tax interstate transportation or communication or their gross earnings, or levy an exaction on merchandise in the course of its interstate journey" are within the ban, since they may "so readily be made the instrument of impeding or destroying interstate commerce." 309 U.S., at 48.
Sales within the State, however, are taxable, though the goods have reached the market by interstate channels. Magnano Co. v. Hamilton, 292 U.S. 40, 43; McGoldrick v. Berwind-White Co., supra, at 58. The sales tax in Berwind-White was on the "transfer of title or possession, or both," id., at 43. And we sustained the tax because of "a local activity" which we described as "delivery of goods within the state upon their purchase for consumption," id., at 58. As a consequence, an out-of-state buyer who purchases goods in New York City and takes them with him pays the tax, while he has them shipped to him, he pays no sales tax.
Although "delivery of goods" within the State may be taxed, "solicitation" within the State for out-of-state [p638] confirmation and shipment into the State may not be. Nippert v. Richmond, 327 U.S. 416, 422; West Point Grocery Co. v. Opelika, 354 U.S. 390. In Dunbar-Stanley Studios v. Alabama, 393 U.S. 537, a tax was sustained on out-of-state photographers, since their activities were not soliciting orders for an out-of-state house but taking photographs within the State.
The use tax came into being to complement the sales tax, i.e., to fill in gaps where the States could not constitutionally tax interstate arrivals or departures. See Henneford v. Silas Mason Co., 300 U.S. 577, 581. Thus, goods may be taxed at the end of their interstate journey, where the tax does not discriminate against interstate commerce. Id., at 582-583; Felt & Tarrant Co. v. Gallagher, 306 U.S. 62 (use tax on storage, use, or other consumption); Southern Pacific Co. v. Gallagher, 306 U.S. 167 (storage and use). Use taxes impose on storage or withdrawal from storage have consistently been sustained. Eastern Air Transport v. Tax Comm'n, 285 U.S. 147; Gregg Dyeing Co. v. Tax Comm'n, 286 U.S. 472; Nashville, Chattanooga & St. Louis R. Co. v. Wallace, 288 U.S. 249; McGoldrick v. Berwind-White Co., supra, at 49.
Nice distinctions are often necessary because, although all taxes on interstate carriers "in an ultimate sense, come out of interstate commerce" (Freeman v. Hewit, 329 U.S. 249, 256), the constitutional ban relates only to "a direct imposition on that very freedom of commercial flow which for more than a hundred and fifty years has been the ward of the Commerce Clause." Id., at 256.
For Illinois to tax the storage of fuel within its borders is, of course, constitutionally permissible, even though in time the fuel may be used in interstate or foreign commerce. In Edelman v. Boeing Air Transport, 289 U.S. 249, 251, the use tax was "not levied upon the consumption of gasoline in furnishing motive power for [p639] respondent's interstate planes." The tax was "applied to the stored gasoline as it is withdrawn from the storage tanks at the airport and placed in the planes." Ibid. "It is at the time of withdrawal alone that 'use' is measured for the purposes of the tax." Id., at 252. (Italics added.) At that time, the gasoline was not irrevocably committed to interstate commerce, for it might be diverted to planes on intrastate journeys.
By contrast, the taxable event on which Illinois levies her tax is not storage for future use, or withdrawal from storage, but only loading in the tanks of planes preparing for interstate or foreign journeys. It is, therefore, inescapably a tax on the actual motive power for an interstate or foreign journey. Taxing the fuel loaded in a plane destined for an interstate or foreign journey is, in other words, taxing the privilege of using a facility in commerce, because the motive power represented by the fuel has become part and parcel of the facility. The decision today marks a break with our constitutional tradition, which, absent an Act of Congress, has led this Court consistently to hold that the free flow of interstate commerce is a ward of the Commerce Clause. Without that free flow of commerce we would not have the great common market we enjoy today.
I would reverse the judgment of the Supreme Court of Illinois.

## Notes

* ↑ Ill. Rev. Stat., c. 120, § 439.1 et seq.
* ↑ Id., § 439.3.
* ↑ Edelman was distinguished in Southern Pacific Co. v. Gallagher, 306 U.S. 167, as involving a tax "upon events prior to the commerce," id., at 176, the Court going on to say: "The principle illustrated by the Helson case forbids a tax upon commerce or consumption in commerce." Ibid.