Source: http://www.law.cornell.edu/supremecourt/text/311/20
Timestamp: 2013-12-22 04:12:24
Document Index: 166669072

Matched Legal Cases: ['§ 555', '§ 1555', '§ 601', '§ 601', '§ 309', '§ 1309', '§ 630', '§ 309', '§ 601', '§ 630']

WEST INDIA OIL CO. (Puerto Rico) v. DOMENECH, Treasurer of Puerto Rico. | Supreme Court | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews WEST INDIA OIL CO. (Puerto Rico) v. DOMENECH, Treasurer of Puerto Rico.
311 U.S. 20 (61 S.Ct. 90, 85 L.Ed. 16)
Argued: Oct. 23, 24, 1940.
[HTML] See 311 U.S. 729, 61 S.Ct. 314, 85 L.Ed. -.
Argument of Counsel from pages 20-22 intentionally omitted
Argument of Counsel from pages 23-24 intentionally omitted
Petitioner brings fuel oil from a foreign country, where it is produced and refined, to Puerto Rico, where it is stored in bonded warehouses in the joint custody of petitioner and the customs officers of the United States, as provided by § 555 of the Tariff Act of 1930, 46 Stat. 743, 19 U.S.C. 1555, 19 U.S.C.A. § 1555, and applicable customs regulations. From time to time petitioner withdraws some of the oil from bond, for disposition and use in Puerto Rico. Petitioner also withdraws some of the oil, with which we are now concerned, and delivers it to vessels in Puerto Rican ports upon sales for use as ships' stores in the manner already indicated. Upon such withdrawal and delivery the import tax imposed on fuel oil by § 601(a), (c)(4) of the Revenue Act of 1932, 47 Stat. 169, 259, 260, 26 U.S.C.A. Int.Rev.Acts pages 603, 604, and required by § 601(b) to be 'treated for the purposes of all provisions of law relating to the customs revenue as a duty imposed by (the Tariff Act of 1930)' is remitted pursuant to § 309 of the Tariff Act of 1930, 46 Stat. 590, 690, 19 U.S.C.A. § 1309, and § 630 of the Act of 1932, added by the amendment of June 16, 1933, 48 Stat. 256, 26 U.S.C.A. Int.Rev.Acts page 624.
The authority is said to lie in the grant by Congress to Puerto Rico of the right to tax 'as soon as the same (articles subject to tax) are manufactured, sold, used, or brought into the island.' As the fuel oil is brought into the Island, this Court's opinion concludes, it is taxable. The report upon the Butler Act points out the reason for its enactment.
It was to enable Puerto Rico to tax in the original package. It should take more than a general tax authorization to destroy the symmetry of the federal control over imports bonded for export and to permit local taxation in Puerto Rico of what is free from local taxation in New York. 'Brought' should be construed to mean when goods pass from the customs control to private control, or the authority to tax of the Butler Act should be held to be subject to the federal power of tax exemption exercised generally in favor of fuel oil by § 309 of the Tariff Act of 1930 and § 601(b) and § 630 of the Revenue Act of 1932. Since the right to tax imports in the original package, granted Puerto Rico by the Butler Act, merely makes goods in the original package in Puerto Rico taxable as other goods in the common mass of taxable property, the Butler Act gives to Puerto Rico no broader power to tax oil sales than was possessed by New York, by virtue of its sovereign power, in the Gulf Oil case. McGoldrick v. Berwind-White Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876. Nothing requires us to frustrate the legislative policy of free competition in world markets.