Opinion ID: 1872702
Heading Depth: 1
Heading Rank: 4

Heading: Tax Fairly Related to Services of the Taxing State

Text: This test is to prevent taxation of an entity that does not benefit from services provided by the taxing state. Goldberg v. Sweet, 488 U.S. at 266-67, 109 S.Ct. at 591-92. The interstate taxpayer may be required to contribute not only to the cost of the services performed by the state on account of the particular transaction which forms the basis for the tax, but for all governmental services including those from which the entity arguably receives no direct benefit. Id. at 267, 109 S.Ct. at 592. In D.H. Holmes v. McNamara, 486 U.S. at 32, 108 S.Ct. at 1624, the court found that the receipt of police and fire protection, use of public roads and mass transit, and the other advantages of civilized society satisfied this test. The pipeline company has the benefit of Mississippi's police and fire protection and all other benefits of civilized society and its government. Mississippi provides the work force which the pipeline company employs in its various facilities within the state. Business done in Mississippi yields substantial revenues for the pipeline company. Furthermore, the pipeline company is currently availing itself of the use of our court system. It follows that the pipeline company should pay its share of the tax burden in Mississippi although it is involved in interstate commerce. American Trucking Assoc., Inc. v. Scheiner, 483 U.S. 266, 296, 107 S.Ct. 2829, 2846, 97 L.Ed.2d 226, 251 (1987). It appears that the tax imposed by Mississippi is fairly related to the benefits provided by the state. The tax imposed upon the pipeline company does not violate the due process clause of the Fourteenth Amendment nor does it violate the commerce clause. The activity taxed, the consumption of natural gas in compressor stations located in Mississippi, has a sufficient nexus with the State to justify the tax. The tax is fairly apportioned to assess only local activities and does not discriminate against interstate commerce by subjecting interstate taxpayers to a double taxation where similarly situated intrastate taxpayers would only be subject to a single taxation. Finally, the tax is fairly related to the benefits provided by the State to the pipeline company. The decision of the chancellor upholding the assessment of taxes and interest totaling $132,311.47 for the period January 1, 1984, to April 30, 1987, is therefore affirmed. AFFIRMED. ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, PITTMAN, BANKS and McRAE, JJ., concur.