Source: https://supreme.justia.com/cases/federal/us/298/393/
Timestamp: 2019-04-21 04:48:23+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 298 › Graves v. Texas Co.
1. A State may not tax sales of gasoline made to the United States. Panhandle Oil Co. v. Mississippi, 277 U. S. 218. P. 298 U. S. 395.
does not tax storing as such; the tax accrues upon withdrawal from storage for "sale or other use," and is measured by the amount withdrawn. P. 298 U. S. 398.
3. A tax on storage, or withdrawal from storage, essential to sales of gasoline to the United States, is as objectionable constitutionally as a tax on the sales themselves. P. 298 U. S. 400.
4. In view of requirements of the Alabama laws taxing sales of gasoline, no plain, adequate and complete remedy at law existed in this case, and suit to enjoin collection was proper. P. 298 U. S. 401.
"Every distributor, refiner, [Footnote 3] retail dealer or storer of gasoline . . . shall pay an excise tax of six cents ($0.06) per gallon upon the selling, distributing, storing, or withdrawing from storage in this State for any use, gasoline. . . ."
There are other indications that storing alone was not intended to be taxed. The tax commission has never required, and distributors, retail dealers, and stores have not made, reports in respect of gasoline until it passes from seller to purchaser or until withdrawn for use. The state has never claimed a tax upon storing of gasoline withdrawn for sale and delivery in interstate commerce. In the absence of withdrawal, there is no tax no matter how long gasoline is stored. The amount at any time received or held in storage is immaterial. The tax depends solely upon the amount withdrawn. No notice is taken of losses by evaporation or otherwise, or of storing for hire or of storing after taxable sale, distribution, or withdrawal for use. Clearly, storing alone is not the thing taxed; withdrawing is essential. Ervin v. Alabama, 80 F.2d 432; Pan American Petroleum Corp. v. Alabama, 67 F.2d 590; State v. City of Montgomery, 228 Ala. 93, 95, 151 So. 856; Dawson v. Kentucky Distilleries Co., 255 U. S. 288, 255 U. S. 293.
It sufficiently appears that appellee had no plain, adequate, or complete remedy at law. Union Pacific R. Co. v. Weld County, 247 U. S. 282, 247 U. S. 285-286; Atlantic Coast Line R. Co. v. Doughton, 262 U. S. 413, 262 U. S. 426; Di Giovanni v. Camden Ins. Assn., 296 U. S. 64, 296 U. S. 69; Risty v. Chicago, R.I. & P. Ry. Co., 270 U. S. 378, 270 U. S. 388; American Airways v. Wallace, 57 F.2d 877, 879; Hopkins v. Southern California Tel. Co., 275 U. S. 393, 275 U. S. 399-400.
In its application to appellee, a tax thus conditioned is an excise upon the privilege of storage, and so the cases hold. State v. Montgomery, 228 Ala. 93, 151 So. 856; Ervin v. Alabama, 80 F.2d 432, 433; Pan American Petroleum Corp. v. Alabama, 67 F.2d 590. It is not transformed into a tax upon something else, or, more particularly, into a tax upon the privilege of sale, because payable when the gasoline is taken out of storage or because measured by the amount withdrawn. Edelman v. Boeing Air Transport, Inc., 289 U. S. 249, 289 U. S. 252; Nashville, C. & St.L. Ry. Co. v. Wallace, 288 U. S. 249, 288 U. S. 268; Ervin v. Alabama, supra; Pan American Petroleum Corp. v. Alabama, supra; State v. Montgomery, supra. The nature of the excise being what it is, liability is the same whether withdrawal of the gasoline is for one purpose or another.
Gasoline refined in Texas and transported to Alabama to be stored in tanks or terminals is there for general uses. Part of it, in the usual course of business, will be sold to the United States; part of it will be sold to others; part will be withdrawn without sale to anyone. This is not to say that the result would be any different though a definite sale were in view at the beginning of the storage. Even in such conditions, storage, like transportation, would be "not part of the sale, but preliminary to it, and wholly the vendor's affair." Wheeler Lumber B. & S. Co. v. United states, supra, at p. 281 U. S. 579. However, the indefinite extension of the uses simplifies the problem. The burden, if any, upon the activities of government is remote and indeterminate. Metcalf & Eddy v. Mitchell, 269 U. S. 514; Burnet v. A. T. Jergins Trust, 288 U. S. 508; Trinityfarm Construction Co. v. Grosjean, 291 U. S. 466. Sales to the United States are made under contracts for a stated term. There is no assurance that the tax or any part of it will be shifted to the buyer.

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