Document: 345 U.S. 495 73 S.Ct. 800 97 L.Ed. 1174 ESSO STANDARD OIL CO.v.EVANS et al. UNITED STATES v. EVANS Nos. 330, 378. Argued March 10, 1953. Decided May 4, Mr. Oscar H. Davis, Washington, D.C., for the United States. William Waller, Nashville, Tenn., Esso Standard Oil Co. K. Harlan Dodson, Jr., appellees. Justice REED delivered opinion of Court. 1 These are appeals from Supreme Court Tennessee, affirming a Chancery judgment some $196,000 in favor State Commissioner Finance and Taxation, against Co., party record No. 330. Ultimately liable, States intervened that litigation brought separate appeal here, It contended tax involved barred by principles sovereign immunity. This is test case. We told if sustained, liability upwards $4,000,000 will result. 2 The facts these. During World War II Government was actively engaged production procurement high octane aviation fuel. All such gasoline produced purchased before it left refinery and, formal passage title, became immediately property Defense Supplies Corporation, corporation wholly owned Reconstruction 6 Fed.Reg. 2972, as amended 3363, specifically exempt state storage use taxes, 55 Stat. 248. Release producing companies occurred only on notification Petroleum Administration War, accordance with allocation specific lots fuel to various official consumers, including Services Allies. Air Force, particular, then arranged transportation its allotments—sometimes government carrier—from refineries nearest consuming point. 3 concerned certain Force South at plants shipped through Memphis, Tennessee. appears 1943 shortage facilities developed area, forcing resort privately tanks. Appellant Lion Company were able provide service tanks points near Memphis. As result, entered into extensive contracts which turn rented tanks, providing would 'render services * receiving, storing, handling loading Government-owned fuel.' Company's charge ranged 18/100 cent 3/10 cents per gallon. agreed assume all taxes. Pursuant thereto, allotments moved barge these private stored there pending need, later reshipped truck air fields order Force. operations continued 1946 under several similar import. 4 August 2, 1949, State, after investigation, demanded pay taxes connection Tennessee tax, Williams' Tenn. Code §§ 1126—1147. statute, material part, provided: 5 'Every distributor when business this state, shall comptroller, commissioner finance taxation, exclusive special privilege addition other engaging carrying an amount equal six each gallon gasoline, distillate refined, manufactured, produced, or compounded sold, distributed him shipped, transported imported into, distributed, sold within during year; *.' § 1127. And 1126 defines distribution 'every person who engages refining, manufacturing, producing, compounding distillate, selling storing same state; also every transporting, importing, causing be imported, distributing, making original sales any purpose whatsoever.' 7 paid required measured month January 1944—the statute limitations having run regard operations—and sued recover. trial court plea, echoed Esso, constitutional doctrine intergovernmental immunity; construe applicable off makes repugnant Constitution void. Both Appeals rejected claimed immunity held valid applied. noted our probable jurisdiction appeal. 28 U.S.C. 1257(2), U.S.C.A. 1257(2). 8 appellants take firm stand Allegheny County, 322 174, 64 908, 88 1209, they contend analogous case compels reversal decision. They say, effect, here no less 'on' Federal than case, support similarity point following factors: grew out state's effort final consumer, but once, first producer importer, refunds subsequently exported provided. Thus 'true character' one 'on States,' (250 S.W.2d 572) claimed, precisely County. 9 however, quite different. had leased machinery Mesta Machine Company. In imposing ad valorem Pennsylvania included assessment both land buildings, machinery. Id., pages 179—180, 186, 912—913, 915. So value federal was, measure tax. substance procedure 'to lay general States', page 185, 915, therefore invalid. Our holding not 'dependent upon ultimate resting place economic burden tax.' 189, 916. 10 imposed because gasoline. not, County based worth property. Instead, collected graduated exercise Esso's engage operations; so Pennsylvania's. ownership immunize contractor storage. may generally, did financially. But since James Dravo Contracting 302 134, 151, 58 208, 217, 82 155, has been fatal flaw. must look further, find either stated created Congress power,1 arising implication system dual government.2 11 Neither condition applies kind governmental involved. There claim we none implied. States, today, vast complicated fields, important purchasing, financial, contract transactions enterprise. does extend exemption taxation corporations individuals, contracting merely their activities useful Government. hold, therefore, prohibit 12 Appellants press further point, courts have discriminated result fact heretofore, McCanless, 178 683, 157 267, 162 1081, public body sustained where dealer. Apparently, feel distinction between fine require results fair-minded court. do agree. Had similarly thus stood firmly shoes organization exercising storage, fallen McCanless precedent. so, instead receive, store, handle load different two cases accord conception operation 13 Affirmed. 14 CHIEF JUSTICE, BLACK JACKSON dissent. 15 FRANKFURTER, heard argument, took part consideration decision Pittman Home Owners Loan 308 21, 60 15, 84 11; Carson Roane Anderson 342 232, 72 257, 96 257; Dameron Brodhead, 322, 721. Mayo 319 441, 447, 63 1137, 1140, 87 1504; supra.

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