Source: https://openjurist.org/332/us/495
Timestamp: 2019-04-24 09:57:04+00:00

Document:
BOARD OF RAILROAD COM'RS OF STATE OF MONTANA et al.
Again we are asked to decide whether state taxes as applied to an interstate motor carrier run afoul of the commerce clause, Art. I, § 8, of the Federal Constitution.
Prior to July 1, 1941, the fees collected pursuant to §§ 3847.16(a) and 3847.27 were paid into the state treasury and credited to 'the motor carrier fund.'3 After that date, by virtue of Mont.Laws, 1941, c. 14, § 2, they were allocated to the state's general fund.
Appellant is a Kentucky corporation, with its principal offices in Indianapolis, Indiana. Its business is exclusively interstate. It consists in transporting household goods and office furniture from points in one state to destinations in another. Appellant does no intrastate business in Montana. The volume of its interstate business there is continuous and substantial, not merely casual or occasional.4 It holds a certificate of convenience and necessity issued by the Interstate Commerce Commission, pursuant to which its business in Montana and elsewhere is conducted.
In 1935 appellant received a class C permit to operate over Montana highways, as required by state law.5 Until 1937, apparently, it complied with Montana requirements, including the payment of registration and license plate fees for its vehicles operating in Montana and of the 5¢ per gallon tax on gasoline purchased there.6 However, in 1937 and thereafter appellant refused to pay the flat $10 fee imposed by § 3847.16(a) and the $15 minimum 'gross revenue' tax laid by § 3847.27. In consequence, after hearing on order to show cause, the appellee board7 in 1939 revoked the 1935 permit and brought this suit in a state court to enjoin appellant from further operations in Montana.
Upon appellant's cross-complaint, the trial court issued an order restraining the board from enforcing the 'gross revenue' tax laid by § 3847.27. But at the same time it enjoined appellant from operating in Montana until it paid the fees imposed by § 3847.16(a). On appeal the state supreme court held both taxes applicable to interstate as well as intrastate motor carriers and construed the term 'gross operating revenue' in § 3847.27 to mean 'gross revenue derived from operations in Montana.'8 It then sustained both taxes as against appellant's constitutional objections, state and federal. Accordingly, it reversed the trial court's judgment insofar as the 'gross revenue' tax had been held invalid, but affirmed the decision relating to the flat $10 tax. Mont., 172 P.2d 452, 460.
Moreover, since Montana has not demanded or sought to enforce payment by appellant of more than the flat $15 minimum fee for class C carriers under § 3847.27,11 we limit our consideration of the so-called 'gross revenue' tax to that fee. This too is in accordance with the state supreme court's declaration: 'Even if it be admitted that the manner of arriving at a sound basis upon which the tax on gross revenue (should be calculated) is not provided by the statute, a c ntention to which we do not agree, no difficulty would arise in putting into effect the minimum fee of $15.00 required for each company vehicle operated within the state.'12 Although the state court did not concede that the statute comprehended no workable or sound basis for calculating the tax above the minimum, we take this statement as a clear declaration that it would sustain the minimum charge even if for some reason the amount of the tax above the minimum would have to fall.
Neither exaction discriminates against interstate commerce. Each applies alike to local and interstate operations. Neither undertakes to tax traffic or movements taking place outside Montana or the gross returns from such movements or to use such returns as a measure of the amount of the tax. Both levies apply exclusively to operations wholly within the state or the proceeds of such operations, although those operations are interstate in character.
Concededly the proceeds of the two taxes presently involved are not allocated to those objects.14 Rather they now go into the state's general fund subject to appropriation for general state purposes.15 Indeed this fact, in appellant's view, is the vice of the statute. But in that view appellant of the exactions. It is far too late to question that a state, consistently with the commerce clause, may lay upon motor vehicles engaged exclusively in interstate commerce, or upon those who own and so operate them, a fair and reasonable, nondiscriminatory tax as compensation for the use of its highways. Hendrick v. Maryland, supra; Clark v. Poor, 274 U.S. 554, 47 S.Ct. 702, 71 L.Ed. 1199; Aero Transit Co. v. Georgia Commission, supra; Morf v. Bingaman, 298 U.S. 407, 56 S.Ct. 756, 80 L.Ed. 1245; Dixie Ohio Co. v. Commission, supra; Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001; cf. South Carolina Highway Department v. Barnwell Bros., 303 U.S. 177, 58 S.Ct. 510, 82 L.Ed. 734. Moreover '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 page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199.
The present taxes on their face are exacted 'in consideration of the use of the highways of this state,' that is, they are laid for the privilege of using those highways. And the aggregate amount of the two taxes taken together is less than the amount of similar taxes this Court has heretofore sustained. Cf. Dixie Ohio Co. v. Commission, supra; Aero Transit Co. v. Georgia Commission, supra. The state builds the highways and owns them.16 Motor carriers for hire, and particularly truckers of heavy goods, like appellant, make especially arduous use of roadways, entailing wear and tear much beyond that resulting from general indiscriminate public use. Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Although the state may not discriminate against or exclude such interstate traffic generally in the use of its highways, this does not mean that the state is required to furnish those facilities to it free of charge or indeed on equal terms with other traffic not inflicting similar destructive effects. Cf. Clark v. Poor, supra; Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Interstate traffic equally with intrastate may be required to pay a fair share of the cost and maintenance reasonably related to the use made of the highways.
The exactions in the present case fall clearly within the rule of Morf v. Bingaman and its predecessors in authority, and therefore, like that case, outside the decisions in the Interstate Transit and like cases. Both taxes are levied 'in consideration of the use of the highways of this state,' that is, as compensation for their use, and bear only on the privilege of using them, not on the privilege of doing the interstate business. Moreover, the flat $10 fee laid by § 3847.16(a) is further identified as one on the privilege of use by the fact that 'unlike the general tax in Interstate Transit, Inc., v. Lindsey, 283 U.S. 183, 51 S.Ct. 380, 75 L.Ed. 953, the levy of which was unrelated to the use of the highways, grant of the privilege of their use is by the present statute made conditional upon payment of the fee.' Morf v. Bingaman, supra, 298 U.S. at page 410, 56 S.Ct. at page 757, 80 L.Ed. 1245.
It is of no consequence that the state has seen fit to lay two exactions, substantially identical, rather than combine them into one, or that appellant pays other taxes which in fact are devoted to highway maintenance. For the state does not exceed its constitutional powers by imposing more than one form of tax. Interstate Busses Corporation v. Blodgett, supra; Dixie Ohio Co. v. Commission, supra. And, as we have said, the aggregate amount of both taxes combined is less than that of taxes heretofore sustained. In view of these facts there is not even semblance of substance to appellant's contention that the taxes are excessive.
The moneys in the motor carrier fund were subject to appropriation for use in supervision and regulation of many activities other than those connected with the public highways. See Rev.Codes Mont. (1935), §§ 3847.17, 3847.28; and cf. note 13.
Appellant's answer and cross-complaint set forth statistics concerning its use of Montana highways during the years 1937, 1938 and 1939. The figures show appellant's equipment operating on Montana highways during 227 days in 1937, 385 trucking days in 1938; and 405 trucking days in 1939. See also note 6.
The statute was Mont.Laws, 1931, c. 184, § 23, now Rev.Codes Mont. (1935), § 3847.23. The section applied the act of which it was a part to interstate and foreign commerce 'insofar as such application may be permitted under the provisions of' the Federal Constitution, treaties and acts of Congress, but expressly exempted interstate carriers from making 'any showing of public convenience and necessity' in order to secure the certificate or permit.
These taxes were imposed separately from the two involved in this case. Appellant's brief states the registration and license plate fees increased from $660.50 in 1937 to $1,212.50 in 1938 and to $1,630.50 in 1939. The gasoline tax increased from $745.30 in 1937 t $1,257.90 in 1938 and $1,649.98 in 1939. The gallonage tax, though ultimately borne by the consumer, was laid on the sale and collected from the dealer.
It should be noted that 'the board of railroad commissioners,' as used in § 3847.16(a), and 'the public service commission,' as used in § 3847.27, designate a single body, invested with regulatory power over various public utilities in addition to motor carriers, e.g., railroads, common carriers of oil, etc. By Rev.Codes Mont. (1935), § 3880, 'The board of railroad commissioners * * * shall be ex-officio the public service commission hereby created * * *.' The two terms were said by the Montana Supreme Court in this case to be 'used interchangeably.' 172 P.2d 452, 461.
This judicial construction was embodied in an amendment to the section made by Mont.Laws, 1947, c. 73, § 2.
Louisiana ex rel. Francis v. Resweber, 329 U.S. 459, 67 S.Ct. 374, 91 L.Ed. 422; Huddleston v. Dwyer, 322 U.S. 232, 64 S.Ct. 1015, 88 L.Ed. 1246; Minnesota v. Probate Court, 309 U.S. 270, 60 S.Ct. 523, 84 L.Ed. 744, 126 A.L.R. 530; Morehead v. N.Y. ex rel. Tipaldo, 298 U.S. 587, 56 S.Ct. 918, 80 L.Ed. 1347, 103 A.L.R. 1445; cf. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487.
Acting not only in the view that statutes are presumptively constitutional and, if necessary, are to be so construed as to make them so, the court noted that § 3847.16(b) expressly provides that, when service 'is rendered partly in this state and partly in an adjoining state or foreign country,' carriers 'shall comply with the provisions of this act' concerning 'payment of compensation' and making reports by showing 'the total business performed within the limits of this state.' (Emphasis added.) Accordingly it held that §§ 3847.27 and 3847.16 should be read together and the limitation of § 3847.16(b) 'within the limits of this state' thus became a part of § 3847.27 as well as § 3847.16(a). Mont., 172 P.2d 452, 460.
Appellant's vice president and general manager, Wheating, testified that for purposes of applying § 3847.27 he had calculated, for each of the years 1939 through 1942, 'the (gross) income for that operation of the load miles operated in Montana by using an average income per mile figure based upon the probable load factor we would have had in Montana.' (Emphasis added.) On this basis the amount of the tax as calculated at one-half of one per cent quarterly was substantially below the statutory minimum for each of the four years. See note 19. These figures apparently were reported to and accepted by the board as the basis for its demands upon the taxpayer for the flat $15 minimum annual tax.
Mont., 172 P.2d 452, 460. Appellant had argued, as it does here, that even if the 'gross revenue' tax is limited to revenue derived from operations in Montana, it is nevertheless invalid for want of any prescribed method on the face of the statute for ascertaining or calculating the tax. The state court held that the statute by necessary implication authorized the board to 'adopt any fair and reasonable mode of enforcement designed to effectuate the purposes of the Act.' Mont., 172 P.2d 452, 461. In view of our limitation of the question before us, as stated in the text, we need not express opinion concerning this ruling or any tax above the minimum calculated in accordance with it. Cf. note 11.
In another connection the state supreme court adverted to the separability clause contained in § 3847.24 of the statute, though not referring to it expressly in relation to the statement quoted in the text.
See note 6 and text. It is admitted by the pleadings that the proceeds of he vehicle registration and license tax and the gallonage tax are allocated to the construction, repair and maintenance of state highways.
The board concedes in the brief filed here that the state supreme court was in error in the statement that the revenue from the two taxes presently in issue 'is devoted to the building, repairing and policing of such highways * * *.' Mont., 172 P.2d 452, 462.
See note 3 and text.
It is immaterial that the state receives federal aid for state road construction, a fact on which appellant places some emphasis.
See note 18 infra and text.
Appellant claims that the $15 minimum fee is unreasonable since it is roughly ten times greater than the tax that would be required if the percentage standard provided in the statute were applied. To accept appellant's position would mean that a state could never impose a minimum fee, but would have to adjust its taxes to the inevitable variations in the use of the highways made by various carriers. The Federal Constitution does not require the state to elaborate a system of motor vehicle taxation which will reflect with exact precision every graduation in use. In return for the $15 fee appellant can do business grossing $3,000 per vehicle annually for operations on Montana roads. Appellant was not wronged by its failure to make the full use of the highways permitted. Aero Transit Co. v. Georgia Commission, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439; Morf v. Bingaman, 298 U.S. 407, 56 S.Ct. 756, 80 L.Ed. 1245; cf. Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222.

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