The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1920-12-08
TAX COMMISSIONERS HALIANAN
AHALYzES THE COURT
DECISION
MUCH OF OH AND GAS Is GOING
OUT OF THE STATES
BORDERS
WILL PAY THE rAX-rNTERESr1NG
EXPLANATIoN OF TIE
LAW

Hon. W. $. Hallanan. state tax. COM
missioner. has. in the course OF PR
vate letter. written to friend mads
an analysis of the recent decision OF
the state supreme court relative 10 the
TRANSPORTATION tax on oil and gas. Ihe
letter written by Mr.. Hallanan was not
written for publication. and IS. there
fore perhaps not as concise as Il would
have been under other conditions. out
on account Of the very valuable inrorma-
zion witch the letter gives, and the
clear statement OF the effect "t me de-
ciSion OF the supreme court portion
of the letter is herewith made puphc.
Referring 70 the holdings OF the court
Mr.. Hallanan says:
The court held that the oil and gas
moving IN interstate commerce could
- not be made subject 70 the tax. although
IL was cOntended by the state that this
was merely the yard stick used IN
determining the amount OF tax assessed
by the state for the privilege OF operat-
ing oil and gas transportation lines In
the state. Judge Ritz in his opinion.
however, attempted 70 separate The
and laid down certain principles IN con-
nection Herewith. | have gone over
the decision carefully. and have reached
the conclusion that the amount Of tax
that will be collected by the state on
.the intra-state business. as now con-
Quoted by various Oil and gas pipe line
companies, will approximate from
100000 TO s450.00o per year. II We are
\preme court Of this state IN the United
States supreme court. We will be able
to collect about 100000 which has ac-
!Erued during the past TWO years since
the act was passed. The court held
.that the tax for the privilege OF trans
porting oil and gas by means of pipe
Tines, was for the privilege Of doing an
1ntra-stat business should be taken as
- basts-out that oil and gas trans
ported in interstate commerce could not
DE included for the purpose OF comput-
5pH the tax.
The court held. however. that prac-
ticaly all OF the oil produced In West
Virginia. and transported By the Eu-
1eka Pipe Line company. was subject
20 the tax for the reason that the same
was. transported in intra-Statc business.
In that II was not definitely placed In
interstate transportation at the time *
was received by the Eureka Pipe Line
company. a part Of II being refined in
this state and part outside OF the
state.
she effect Of this will be TO give 20
the state a tax on practically alt OF the
oil produced in West Virginia. which rs
handled by pipe line companies. Prac-
Eureka Pipe Line company. and the an
nual tax to be borne by the Eureka
company will be approximately $I2O.-
900 per year.
I'm connection with the transporta-
ton OF gas produced IN West Virginia,
the decision holds that such gas as Il;
sold direct to parties outside the state
Is not subject to tax. However under
the decision there Is considerable
quantity Of gas which goes outside the
state which Is subject to tax, because
II Is originally sold and delivered at
points within the state and then trans
ported out OF the state under another
ownership We estimate that the tax
received from the gas will amount APP
proximately to 100000 For the Yea
ending June 3oth. 1919. the amount OF
gas produced In the state was approxi-
mately 1000 900 NJ cubic feet and
approximately 100000 900 VI cubic feet
was consumed within the state On
this basis the state will receive ,ax
On about 10000. 00O VI cubic feet
II hts estimate proves TO be cor
rect, IL viii be seen that on a large ma RI
OF the gas that goes outside OF the
state no tax can be collected. II Is inn
possible for mo 10 make an exact estI-
pate until 7 have had detailed reports
erom the various companies, but | feel
that these figures are approximately
correct
I'm the United Fuel Gas comnanv
case, decided by the court. Il is held
that 1l,60c,000 N cubic feet Of the gas
sold by the company direct to 'constIm-
exc within West Virginia is subject 10