Source: https://supreme.justia.com/cases/federal/us/300/1/
Timestamp: 2019-04-21 20:32:28+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 300 › Taber v. Indian Territory Illuminating Oil Co.
A nondiscriminatory state tax, ad valorem, on equipment used by a private corporation in operating for oil and gas under a lease to it of restricted Indian allotments held valid against the claim that it was an unconstitutional burden on a federal instrumentality. P. 300 U. S. 3.
177 Okla. 67, 57 P.2d 1167, reversed.
Certiorari, 299 U.S. 528, to review the affirmance of a judgment against Taber, County Treasurer, in an action by the Oil Company to recover money paid under protest as taxes.
The respondent, Indian Territory Illuminating Oil Company, holds an oil and gas lease covering lands of restricted Pawnee Indians. The question relates to the constitutional authority of the state of Oklahoma to tax certain property used by the respondent in its operations as lessee. The Supreme Court of Oklahoma held that the property was not taxable because the lessee was a federal instrumentality and Congress had not consented to its taxation. 177 Okl. 67, 57 P.2d 1167. We granted certiorari. October 12, 1936.
"one dwelling, portable, one garage, one tool house, engines, pump, water well equipment, tanks, derricks, casing, tubing, rods, pipelines, and one trailer truck, of the aggregate value of $15,869.23."
The tax is an ad valorem tax for the year 1933-34. There is no allegation or finding that the tax was discriminatory, the sole contention being that the property was not subject to ad valorem taxation because of its use as an adjunct to the production of oil and gas from the leasehold.
ad valorem tax is valid, although the property is used in the operations of the governmental agency. This distinction, recognized by Chief Justice Marshall in McCulloch v. Maryland, 4 Wheat. 316, 17 U. S. 436, was stated and applied after full consideration in Thomson v. Union Pacific Railroad, 9 Wall. 579, 76 U. S. 591, and Railroad Co. v. Peniston, 18 Wall. 5, 85 U. S. 31-36. Recent illustrations are found in Alward v. Johnson, 282 U. S. 509, 282 U. S. 514, where the tax which was sustained was laid upon property used in operating an automotive stage line between points in California under a mail carrier's contract, and in Tirrell v. Johnston, 293 U.S. 533, where a tax known as the "gasoline road toll" was held to be payable by a rural mail carrier who delivered the mail by means of his own motor vehicle. See also Thomas v. Gay, 169 U. S. 264, 169 U. S. 273; Baltimore Shipbuilding Co. v. Baltimore, 195 U. S. 375, 195 U. S. 382; Choctaw, O. & G. R. Co. v. Mackey, 256 U. S. 531, 256 U. S. 536-537; Willcuts v. Bunn, 282 U. S. 216, 282 U. S. 226; Susquehanna Power Co. v. State Tax Commission (No. 1), 283 U. S. 291, 283 U. S. 294; Eastern Air Transport v. Tax Commission, 285 U. S. 147, 285 U. S. 153.
"Such immunity as petitioner enjoyed as a governmental instrumentality inhered in its operations as such, and being for the protection of the Government in its function extended no further than was necessary for that purpose."
Id., p. 288 U. S. 328.
In that view, the immunity cannot be said to extend to a nondiscriminatory ad valorem tax upon the property of the petitioner which is involved in the instant case. The judgment is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.

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