Title: GARRETT FRT -LINES v MONT R R C

State: montana

Issuer: Montana Supreme Court

Document:

No, 12246 I N T H E SUPREME C O U R T O F THE STATE O F MONTANA 1973 G A R R E T T FREIGHTLINES, INC,, a corpora tion, Plaint i f f and Respondent, T H E MONTANA RAILROAD AND PUBLIC SERVICE COMMISSION et a l . , Defendants and Appellants. Appeal from: District Court of the F i r s t Judicial District, Honorable Nat Allen, Judge presiding. Counsel 02 Record: For Appellants : F d f lliam E. 0 ' ~ e a x y appeared, Helena, Montana John P, Atkins argued, Helena, Montana For Respondent : Bolkovatz and Romine, Helena, Montana Walter H, Bolkovatz and William Romine argued, Helena, Montana - - - - - Submitted: January 25, 1973 Decided : YfiR 1 5 1973 Fileda #Pf? 1 5 19'13 Mr. Chief Justice James T. Harrison delivered the Opinion of the Court. Plaintiff-respondent Garrett Freight1 ines, Inc., hereinafter designated Garrett, is a common carrier of general commodities engaged i n both intrastate and interstate comnerce, operating pursuant to authority granted by the Interstate Comnerce Comission and the Public Service Com- mission of the State of Montana. Garrett brought this action i n the d i s t r i c t court of the f i r s t judi- cial district,in and for the county of Lewis and Clark, seeking a declaratory judgment that sections 8-101 and 8-1 27, R.C.M. 1947, are unconstitutional and for the issuance of a permanent injunction enjoining the Public Service Commission from exacting the gross revenue fee from Garrett under settion 8-127, R.C.M. 1947. The Pub1 i c Service Comnission, hereinafter designated Commission, filed a motion to dismiss on the grounds that the complaint failed to state a claim upon which relief could be granted. The d i s t r i c t court dis- missed the complaint. On appeal to this Court the judgment was ordered vacated and the cause was remanded w i t h directions to obtain further information per- tinent to the issues. See Garrett Frt. Lines v. Mont. Ry. Comm'n, 153 Mont. 380, 457 P.2d 469. After the filing of answers to interrogatories by both parties, the cause came to t r i a l on September 20, 1971. After both parties submitted evi- dence through oral testimony and exhibits, the court, sitting without a jury, entered its findings of fact, conclusions of law and judgment i n favor of plaintiff. This appeal followed. The statutory provisions herein involved are section 8-101 (h) , R.C .M. 1947, which exempts from the operation of the Montana Motor Carrier Act: ' * * * motor vehicles used i n carrying property consist- ing of agricul tural comnodi t i e s (not including manufactured products thereof), i f such motor vehicles are not used i n carrying any other property, or passengers, for compensation, * * * (and) the transportation of property by motor vehicle w i t h i n any city, town, or village with a population * * * of less than five hundred (500) persons, or w i t h i n the- commercial areas thereof as determined by the board * * *." The Montana Motor Carrier Act i n section 8-127, R.C.M. 1947, provides: "In addition t o all other 1 icenses, fees and taxes im~osed upon motor vehicles i n this state and in consideratioh of . - - - . - - - . - . the use of the highways of this state, every motor carrier holding a certificate of pub1 ic convenience and necessity * * * shall * * * f i l e w i t h the board * * * a statement " showing the gross operating revenue of such carrier for the preceding three (3) months of operation, or portion thereof, and shall pay to the board a fee o f five hundred seventy- five thousandths (.575) of one (1) per cent of the amount of such gross operating revenue * * * and i n the event that such carrier operates in interstate commerce, the gross operating revenue of such carrier w i t h i n this state shall be deemed to be all the revenue received from business be- ginning and ending within this state, and a proportion based upon the proportion of the mileage within this state to the entire mileage over which the business i s done of revenue on all business passing through, into or out of this state * * *." (Emphasis added). On March 1, 1968 Garrett filed with the Commission i t s quarterly report of gross operating revenue, together with i t s check for $5,830.17, representing the amount due the State of Montana for the preceding quarter in accordance with section 8-127, R.C.M. 1947. B y way of letter accompany- ing the gross revenue report and check, Garrett advised the Commission that such payment was being made under protest pursuant to sections 84-4501 and 84-4502, R.C.M. 1947, Garrett has continued to remit i t s quarterly report of gross operat- ing revenue to the Commission since the original protest date. Both parties stipulated on July 21, 1968: " * * * all future payments made under protest of the gross revenue tax, hereinafter to become due and paid by Plaintiff before final determination of Plaintiff's cause of action, shall become part of, and be included in, Plaintiff's com- plaint dated April 29, 1968, and that i t will not be neces- sary for Plaintiff to f i l e a separate action for the recovery of such future payment." In i t s complaint, Garrett has alleged that Chapter 1 of Title 8, R.C.M. 1947, has deprived i t of due process and equal protection of the law i n violation of Art. 111, Sec. 27 of the Montana Constitution and the Four- teenth Amendment to the Constitution of the United States; and also, that said statutes are in violation of the Comnerce Clause. The district court made findings and conclusions to the effect that the a1 1 egations of Garrett were correct and entered judgment thereon. W h i 1 e the district court dealt with many matters raised by Garrett w e do not find i t necessary to discuss all of them since the cause can be disposed of by deciding whether the revenue col 1 ected by the Pub1 i c Service Commission under section 8-127, R.C.M. 1947, constitutes an unconstitutional levy under Article 111, Sec. 27, of the Montana Constitution and the Fourteenth Amend- ment of the Constitution of the United States in that said levy denies Garrett uniformity of taxation, i s discriminatory, confiscatory, prohibitive, arbi- trary, and is a tax on the privilege of doing business. Secondly, whether the formula used to compute the revenue due the State of Montana under section 8-1 27, R.C .M. 1947, i s arbitrary , unreasonable, indefinite, and lacks precision. In regard to the f i r s t issue, this Court finds that the revenue collected by the Public Service Commission under section 8-127, R.C.M. 1947, constitutes an unconstitutional levy under Article 111, Sec. 27, of the Montana Constitution and the Fourteenth Amendment of the Constitution of the United States in that said levy denies Garrett uniformity of taxation, i s discriminatory, confiscatory, prohibitive, arbitrary, and i s a tax on the privil ege of doing business. Section 8-127, R.C.M. 1947, does not include private carriers for payment of the gross revenue tax when carrying their o w n commodities upon the highways of the State of Montana. Section 8-101 (h), R.C.M. 1947, ex- empts from all provisions of the Motor Carrier Act motor vehicles used in carrying property consisting of ordinary 1 ivestock or agricultural commodities , supplies and materials for construction and maintenance of highways, supplies and materials for logging and mining operations, and for the transportation of newspapers, newspaper supplements, periodicals and magazines. This Court holds, and the district court so found, that these exemptions and exclusions deprived Garrett of the right of uniformity i n taxation, discriminating against Garrett in the company's interstate operation, being arbitrary class- ifications, lacking any reasonable basis for determination, and being unreasonably discriminating between Garrett and the exempt motor vehicles. This Court i n the case of Hayes v. Smith, 58 Mont. 306, 314, 192 P. 615, set the formula for classification as follows: "The authority of the state to make a proper classifica- tion of property for the purpose of taxation is settled beyond controversy i n this jurisdiction. (Citation omitted). B u t a proper classification implies that there exist real differences as between the subjects constituting the different classes, and excludes the idea of arbitrary selection. " On the subject of classification i n State v. Sunburst Refining Co., 73 Mont. 68, 235 P. 428, this Court held that the classification must be reasonable, in that i t must be based upon substantial distinctions which really make one class different from another. In State ex rel. Griffin v. Greew 104 Mont. 460, 67 P.2d 995, 111 A.L.R. 770, this Court held that arbitrary and unreasonable classifications are not permissible. The record here discloses that the chain store operations with their large warehouses, which have come into being i n recent years, have received the advantage of the exclusion of private carriers from paying the gross revenue tax. These business concerns have acquired their own vehicles and accomplished their o w n hauling without paying any tax, resulting in an un- reasonable discrimination in favor of such carriers, since the plaintiff cannot be competitive in price because of the gross revenue tax. Also the record shows that section 8-127, R.C.M. 1947 i s discrimin- atory in that railroads haul freight into their stations by train which then must be delivered by common carrier on Montana highways. The wholly owned trucking subsidiaries of the railroads make these deliveries. There i s no statute or board rule regulating the agreement between the rai 1 roads and their wholly owned trucking subsidiaries as to the charge or allocation of revenue made between the trucking subsidiary to the parent railroad. The trucking subsidiary only has to pay a gross revenue tax on the amount i t charges the railroad for its services, whether such amount i s f a i r and com- petitive t o other common carriers or not. There being no rules or regula- tions or a law providing for the amount of such charges, the situation results in a discrimination against Garrett, a common carrier, in favor of rail - road trucking subsidiaries who are a1 so holders of certificates of pub1 ic convenience and necessity . Counsel for the Pub1 ic Service Comission capably and extensively argue that the revenue collected under section 8-127, R.C.M. 1947, is not an unconstitutional levy under Article 111, Sec. 27, of the Montana Con- stitution and the Fourteenth Amendment to the Constitution of the United States, in that the levy does not deny Garrett uniformity of taxation, is nondiscriminatory, is nonconfiscatory, is not prohibitive, is not arbitrary, and is not a tax on the privilege of doing business. The crux of the argu- ment centers on the case of Rwy. Com. v. Aero Mayflower Tran., 11 9 Mont. 118, 131, 172 P.2d 452, Affirmed 332 U.S. 495, 92 L.Ed. 99, 68 S.Ct. 167. Therein this Court stated: " * * * In addition the exactions must be such as are reasonably necessary for the purposes mentioned (i .e. build- ing and maintaining highways), and must not be discrimina- tory as between state and interstate carriers. It further appears to be the established rule of the federal courts to require the interstate carrier who challenges the right of the state to impose such licenses and taxes to affirmatively show that the exactions demanded are not necessary for the purposes mentioned or are discriminatory. In other words the burden is on the carrier to show wherein the exactions are unlawful as to him." This Court also stated: " * * * The courts are not authorized to substitute their views for those of the legislature. We can only consider the legislation that has been had, and determine whether or no its necessary operation results in an unjust discrim- ination between the parties charged with its burdens. It is enough that the state has secured a reasonably fair distribution of burdens, and that no intentional discrimin- ation has been made against nonresidents. " Relying on these two passages, this Court finds that Garrett has met the burden of showing that the levy was discriminatory. We also find that an invidious discrimination has taken place against Garrett. Garrett's witnesses in their testimony indicate that the number o f private carriers not subject to the gross revenue tax is substantial, and on the increase yearly. The witnesses further showed that Garrett is in compe- tition with its own customers. These customers are electing to become private carriers i n an alarming number of cases, and they are not subject to the gross revenue tax. O f equal concern and of grave importance is the use that such private carriers make of the Montana highways. Testimony of Garrett's witness and exhibits from the records of the Gross Vehicle Weight Department of the State of Montana, show that there are a total of 164,176 vehicles, including commercial vehicles, farm vehicles and loggers and livestock vehicles using Montana highways. Answer to interrogatories propounded by the plaintiff t o the defendant shows that there are 17,015 vehicles issued permits from the Montana Railroad Comnis- sion. T h i s makes a net of 147,161 commercial vehicles using the highways of the State of Montana which are exempt from paying any gross revenue tax. The size of the vehicles and the weight carried by them is comparable t o the vehicles used by the plaintiff. Garrett's Exhibit 12 i s only a small, partial l i s t of some of the known private carriers and this exhibit l i s t s 166 tractors and 157 trailers of 26,000 pounds and up. The records of the State Department of Revenue, Motor Fuels Division,show the miles travel led by a l l vehicles subject to the fuel tax. From these records it i s shown that the exempt vehicles and privately owned vehicles travel millions of miles on the highways of the State of Montana. A few such carriers' travel is as follows: Associated Food Stores, 640,550 miles; Buttrey's Food, 918,969 miles; Beatrice Foods, 295,661 miles; Continental Oil , 872,657 m i 1 es; Safeway Stores, 1,853,779 m i 1 es; Petrol ane Supply, 343,604 m i 1 es ; American Oi 1 Company, 1,553,207 miles; Ryan Grocery, 190,730 miles; and Royal Logging, 379,817 m i 1 es. I t cannot be denied that the exempt vehicles and private carriers make as much and as arduous use of the highways as do the plaintiff and similar carriers. There is no distinction or just classification of the exempt carriers and private carriers as they are a l l engaged i n business for a profit and use the highways of the State of Montana in such business. I t appears that the exemptions and the exclusion of private carriers is a result of successful lobbying and not because of any real classification distinctions. To classify has been defined as "To group or segregate in classes which have systematic re1 ations. " (Webster 's New Coll egiate Dictionary, Second Edition). From such definition the exempt vehicles and private carriers seem to be excluded on an arbitrary basis rather than on a classification of systematic relations. The legislature in its 1969 session added to the exemptions the transportation of newspapers, newspaper supplements, periodicals or maga- zines, or those tow trucks and wreckers designated exclusively in towing abandoned, wrecked or disabled vehicles,and ambulances. TOW trucks and ambulances appear to have a valid classification as they are for the bene- fit of the public and usually used in emergency situations. However, the exemption of newspapers and supplements again appears to be arbitrary, The legislature in 1 9 7 1 passed a new section providing the exemption for the transportation of 1 ivestock by motor carrier by a bona fide farmer or rancher or raiser of livestock in his own vehicles, or when such farmer or rancher or raiser provides transportation for the livestock of another farmer, rancher or raiser of livestock between farm and farm, ranch and ranch, pasture and pasture, or to a point. All of such activities are similar to those of Garrett, a business for profit using the highways of the State of Montana. All this goes to show the vast difference in fact situation here from that in Peter Kiewit Sons' Co. v. State Board of Equalization, Mont., , 505 P.2d 102, 30 St.Rep. 32. In that case a complaint was raised as to the pub1 ic contractors ' 1 icense act being unconstitutional because the levy was not uniform and was discriminatory. We there held that since it appeared that all public contractors had to pay the tax, that all members of the class were treated alike. Under the facts there we also held that a distinction between public and private contractors was not arbitrary and capricious; it being clear from the record that the public contractors' license act was intended to operate as a revenue enforcing measure as pointed out i n the opinion and a like situation did not appear as to private contractors. The second issue is whether the formula used to compute the revenue due the State of Montana under section 8-127, R.C.M. 1947, i s arbitrary, unreasonable, indefinite and lacks precision. The formula i n question i s : Intrastate: .575 of one per cent (1%) of gross operating revenue, (G.O.R. x ,00575 = amount due) Interstate: ,575 of one per cent (1%) of gross operating revenue. Gross operating revenue i s defined as, "A proportion based upon the proportion of the mileage w i t h i n this state t o the entire mileage over which the business is done * * *." Montana miles x total gross revenue x ,00575 = amount due) Total miles Garrett, under the provisions of this formula and section 8-1 27, R.C.M. 1947, must report t o the Railroad Comnission the gross operating revenue of such carrier and pay a tax thereon. N o provision exists i n this statute, nor does the Commission provide through rules and regulations, for deductions of items included i n the gross revenue that have no relation to the use of the highway by Garrett. These items include the loading and unloading costs, such items arising outside the State of Montana, intercity pickup and del ivery charges, many outside the State of Montana, cost of intercity pickup and del ivery charges, coll ect on del ivery fees, storage charges, return delivery charges, and vehicle detention or demurrage charges. None of these charges, by any formula or reasoning, can be said t o relate t o the use of the highways of the State of Montana by Garrett, and they are included in the gross revenue for the purpose of tax determination. N o provision of the statute or regulations of the Railroad Commission provide an adjustment where Garrett has made a refund to a shipper. The taxes are paid upon the amount originally reported, and no credit is allowed for a refund. A tax having t o be paid upon items which have no relationship to the use of Montana highways is a tax on interstate commerce, a burden on ,interstate commerce and a violation of the Commerce Clause of the United States Constitution. The exaction imposed by section 8-127, R.C.M. 1947, not being related t o the use of the highway, i s a tax only on the income producing ability of a vehicle, it i s confiscatory, and the statute does not take into consideration Garrett's profit or loss from the trucking operations. Garrett, according to the record, expends the s u m of $1.24 for each do1 lar of revenue produced i n intrastate operation. Obviously if the formula for computing tax eliminated those items which have no relationship to the revenue producing ability of the vehicle as such, the loss ratio in the State of Montana of Garrett 's intrastate operation would be less. W e hold that the gross revenue formula has no relationship to the use made by Garrett's vehicles i n travelling the highways of the State of Montana and the tax varies according to the volume of interstate business. The Montana Supreme Court in the Rwy. Com. v, Aero Mayflower Tran., 119 Mont. 118, 172 P.2d 452, stated: "The company contends t h a t i n fixing the exactions imposed upon i t , no distinction i s made between large and small vehicles, or heavy and liqht loads, nor the number of miles travel led over t h e highways. here i s merit in this con- tention. The heavier the load and the qreater the number of miles travel led the greater the wear-and tear on the roadway. I t i s obvious-that the tax set up in section 3847.27 (section 8-127, R.C.M. 1947) was for the purpose of meeting this situation. A short t r i p and a light load would bring the carrier b u t l i t t l e revenue whereas the heavier traffic and; 1 onger hauls would produce more revenue and require more taxes. * * *" (Emphasis supplied). Garrett's testimony of witnesses and exhibits has shown that heavy loads and long hauls do not always produce more revenue. Plaintiff's E x h i b i t 1 depicting an actual transaction, shows two shipments travelling the same miles i n Montana w i t h similar commodities and similar weights but travelled different distances outside of the State of Montana. Load A produced more revenue b u t paid less tax than Load B which produced less revenue and paid more tax. This resulted from the number of miles travelled by Load A outside the State of Montana i n an interstate shipment. This exhibit and testimony also confirms t h a t the amount of tax varies in pro- portion t o the volume of interstate business and is a burden on interstate commerce, E x h i b i t 2 demonstrates that two shipments travelling the same miles in Montana, b u t having different weights and different comodi ties resul t S in the heavier load by 11,000 pounds producing less revenue than the lighter loaded vehicle. The one w i t h the heavier load paid less tax than the one with the lighter load. This exhibit shows that the weight of the load does not determine the amount of the tax to be paid since the heavier load had a lower revenue rate than the lighter load. Exhibit 3 depicts two vehicles carrying approximately the same weight, same Montana miles, b u t different products, one vehicle producing a revenue of $347.60 and the other a revenue of $172.80, resulting in a tax on one vehicle being less than the other. This again was because of the higher rate on one commodity than another. The tax was not related to the use of the highway. There were other exhibits to like effect, and i t was apparent from them that trucks with heavy loads do not always produce more revenue than trucks w i t h lighter loads. A major factor i s the rate of the commodity being shipped. Garrett's expert witness testified as to the important factors in determining a rate. The density of a product being shipped i s more important because of the limited cubic space and weight carrying capacity of the carrier trailers operating over the highways. The less dense products would have a higher rate than the higher density products. From Garrett's exhibits and testimony of i t s witnesses, i t appears that a proper conclusion i s that section 8-127, R.C.M. 1947, and the tax exaction therein, i s based upon the income producing ability of the vehicle in interstate commerce rather than the use of the highway. The inequities are obvious and numerous and the tax not being for the use of the highway must be for the privilege of doing business, placing a burden on interstate commerce contrary to the Commerce Clause of the United States Constitution. T o be valid the tax must be compensation reasonably related t o the use made of the highways o f the state. It appears that under the present act the amount of taxes is not dependent upon such use. It does not rise with an increase in mileage travelled or weight of the vehicle, but only upon the income producing ability of the vehicle. The tax does not relate to degree of wear and tear incident to the use by the motor vehicles of the highway of different sizes and weights, except as to the income producing ability. The tax is proportioned solely to the earning capacity of the vehicle and not to the use of the highway, and thus has no reasonable relation. It is the income that is taxed, and Garrett's exhibits show that this results in very grave inequities in the computation of the tax. As we have noted herein the revenue collected under section 8-127, R.C.M. 1947, is an unconstitutional levy under Article 111, Sec. 27, of the Montana Constitution and the Fourteenth Amendment to the Uni ted States Constitution; and, further, the formula used to compute the revenue due thereunder is arbitrary, unreasonable, indefinite and lacks precision. As to both situations heretofore shown the revenue collected is not in consideration of the use of the highways but rather a tax upon the privilege of doing business. For these reasons no nece on this appeal and the judgmen We concur: Associate Justices M r . Justice Gene B. Daly and M r . Justice John Conway Harrison dissenting: W e respectfully dissent, having i n mind the burden that must be carried by a plaintiff when he launches a constitutional attack on a statute enacted by the Montana legislature as approved i n Great Northern Utilities Co. v. Public Service Commission, 88 Mont. 180, 220, 293 P.294, in this 1 anguage : "'In the case of statutes passed by the legislative assembly and assailed as unconstitutional , the question is not whether i t is possible to condemn, b u t whether i t i s possible t o uphold. W e stand committed to the rule that a statute will not be declared unconstitutional unless its nullity i s placed, i n our judgment, beyond reasonable doubt. "I The problems here were before this Court, i n part, i n this Court's ruling i n Peter Kiewit Sons' Co. v. State Board of Equalization, Mont. -9 505 P.2d 102, 30 St.Rep. 32, decided January 10, 1973. The central issue i n Kiewit was tax discrimination based on classification between pub- l i c and private contractors. The same problem arises in the instant case between public motor carriers and private motor carriers. The reasons and purposes for the tax may differ but the underlying problem of an alleged unconstitutional classification resulting i n tax discrimination remains the same. In Kiewit, there was an in depth discussion including most of the Montana and federal citations on the question of classification for taxing purposes between contractors doing public work and contractors doing private work. There the court said, quoting w i t h approval language from State ex re1 . Schul tz-Lindsay v. Board of Equalization, 145 Mont. 380, 403 P.2d 635: "Since that was the same point raised i n Schultz-Lindsay, a review of that decision will give us a view of Montana law on the issue of tax discrimination. There, w e stated that the legislature may impose a license tax on certain occu- pations and not on others, as long as 'arbitrary and un- reasonable classifications' are not permitted. Schultz- Lindsay, p. 398. "In Schultz-Lindsay a t p. 390, the Court citing State v. Sunburst Refining Go., 73 Mont. 68, 235 P. 428, stated that i n making such classifications: "'Equal protection of the law is seldom, i f ever, obtained; and because of the very f r a i l t y of human agencies, the authorities a l l recognize the right of the legislative branch of government t o make reason- able classifications of subjects for property or occupation taxes * * * and i f the classification i s reasonable, and i f a l l of the subjects w i t h i n a qiven class are accorded the same treatment, the legislation cannot be said to deny t o anyone w i t h i n such class the equal protection of the jaw, even though the burden imposed upon h i m may be more onerous than that imposed upon a member of another class. [Citing cases] B u t to justify such discriminatory legislation, and avoid the condemnation of the Fourteenth Amendment t o the federal Constitution, the classification must be reason- able -- that i s , must be based upon substantial distinc- tions which really make one class different from another. [Citing case] (Emphasis ours. ) ' "Later i n the same opinion a t p. 392, the Court said: "'The constitutional safeguard against unjust discrimin- ation in legislation of this type i s well defined by the decisions everywhere, and that i s , that the classification must be reasonable, not arbitrary, and must rest upon some ground of difference having a f a i r and substantial relation to the object of the lesislation, so that a l l persons similarly circumstanced shall be treated alike. Mills v. State Board of Equalization, 97 Mont. 13, 31, 33 P.2d 563.' (Emphasis ours.)" Applying then, the above language, the fact that the operation of section 8-127, R.C.M. 1947, creates the class motor carriers for hire hauling nonexempt commodities over Montana highways, does not per se render the statute unconstitutional. If the class i s based on a substantial distinction that really makes one class different from another, as s e t forth above, the classification is reasonable and constitutional. I t would appear that there i s as sound, i f not sounder, factual basis for the distinction between public carriers for hire and private carriers not for hire than between public and private contractors. The exempt commodities contained in section 8-101, R.C.M. 1947, merely conform t o those exemptions granted to interstate carriers for hire under the Interstate Commerce Act, Part 11, Motor Carriers, 49 U S C A $ 303(83, and are thus preempted from state regulation when moving i n interstate commerce. Baltimore Ship. & Reciv. Ass'n v. Public Util. Com'n of Cal., 268 F.Supp. 836, ( D C Cal. 1967), affirmed 389 U.S. 583, 88 S.Ct. 694, 19 L ed 2d Plaintiff-respondent Garrett has presented a convincing case of "onerous" burden on i t when compared t o private haulers such as Safeway and Buttreys etc., all private and outside the classification. This is probably true, but our case law above cited distinctly and squarely states that this makes no difference so long as those w i t h i n the given class are accorded the same treatment. So, this argument would be irrelevant when directed t o the matter of constitutionality, but not so i f directed to the legis- lature. This leaves the matter of the railroad and its subsidiary carriers t o be considered. The subsidiary carrier of the railroad being w i t h i n the class under consideration. The argument that the subsidiary carrier for hire has an arrangement with the railroad t o "fix" its rates and thus pay less tax on the same formula must f a i l for the obvious reason that section 8-127, R.C.M. 1947, which authorizes the tax or fee, does not authorize or contemplate this kind of situation and i f the parties complained of have found a "loophole" through "rate" fixing, then this is a matter t o be brought t o the attention of the proper Montana authority. I t has no bear- ing on the constitutionality of section 8-127, R.C.M. 1947. W e believe whether the burden imposed by the statute is "discrimin- atory" or "confiscatory" was decided by this Court i n Rwy. Com. v.Aero Mayflower Transit Co., 119 Mont. 118, 136, 172 P.2d 452, cited i n the majority opinion, when the Court citing from Hilger v. Moore, 56 Mont. 146, 182 P. 477 and Travelers' Ins. Co. v. Connecticut, 185 U.S. 364, 22 S.Ct. 673, 46 L ed 949, said: " * * * the validity of this legislation does not depend on the question whether the courts may see some other form of assessment and taxation which apparently would result i n greater equality of burden. The courts are not authorized t o substitute their views for those of the legislature. W e can only consider the legislation that has been had, and determine whether or no i t s necessary operation results i n an unjust discrimination between the parties charged w i t h its burdens. " Aero Mayflower was affirmed by the United States Supreme Court, 332 U.S. 495, 502, 68 S.Ct. 167, 92 L ed 99. There that court spoke concerning the statute as "prohibitive" i n this language: I ' * * * it i s not material t o 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 i n Montana. " '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 (274 U.S. at 577, 71 L ed 1200, 47 S.Ct. 7021" The "arbitrary" feature of this kind of tax has been treated in other jurisdictions. In New Jersey a flat rate tax of 112 cent per mile was held constitutional in Safeway Trails, Inc., v. Furman, 4 1 N.J. 467, 197 A.2d 366, 376, citing from Capitol Greyhound Lines v. Brice, 399 U.S. "A mileage tax is normally considered to be prima facie compensatory because it is directly proportional to road use. But a formula not related to road use will be upheld unless the challenger shows that the result of the tax is an unreasonable burden on interstate carriers ." Garrett's claim that this is a 'tax on the privilege of doing busi- ness" was again directly answered in Aero Mayflower by pointing out that the act itself provides "in consideration of the use of the highways of this state" motor carriers for hire will be required to pay a gross revenue fee. The challenge to the tax formula itself as being "arbitrary", "un- reasonable", "indefinite" and "lacks precision" does not square with the record or decided cases in this area, Garrett's comptroller, Mr. Hawkins, testified on cross-examination that he had never had any trouble applying the formula. B y Garrett's own admission, it would seem the formula is neither "indefinite" nor does it "lack precision". As to the issue of section 8-127, R.C.M. 1947, being "unreasonable", the logic on that point is difficult to follow. It is claimed that the tax "bears no relationship to the use of Montana highways". An examination of the formula itself seems to make the relationship between the two obvious. In the New York case of Mid-States Freight Lines, Inc., v. Bates, 200 Misc. 885, 111 N.Y.Sa568, 573, cert.den. 345 U.S. 908, 97 L ed 1344, the court upheld the validity of a taxing formula challenged as not being truly compensatory for road use, stating: "The formula employed by a state to exact reasonable compensation from carriers for the privilege of using its highways is not of crucial importance. The court has recognized the practicable impossi bil i ty of devising a formula which will result in exact or mathematical precision in equating the tax to the privilege conferred. Rough approximation, rather than precision will suffice and if the tax is not unreasonable it will be upheld.'' It is therefore, our opinion that the burden to be carried by plaintiff-respondent in a successful constitutional challenge has not been met and the judgment of the trial court should beHersed.