Opinion ID: 1335334
Heading Depth: 1
Heading Rank: 7

Heading: The Section 13A Taxes and The Import-Export Clause

Text: At the latest, I believe that the loading of appellant's coal onto a unit train, like the delivery of the oil into the vessel's hold in Richfield Oil, marked the commencement of the movement abroad and made the coal an export. Loading commenced when the coal which was dedicated for a foreign delivery was segregated from domestic coal and ended not with the coal falling into the rail car, as some have contended, but when the coal was on the floor of the rail cars. Loading included the filling of the cars. If that were not so, it would be inappropriate to speak of a loaded rail car or a loaded vessel. This act which made appellants' coal an export was also a taxable incident under the Severance and Business Privilege Tax Act of 1993. W. Va.Code §§ 11-13A-3(a), 4(a), and 6(a). The tax on that incident was determined in the appellants' case by the coal's gross value as shown by the gross income derived from the sale. This gross value/gross income included a component of value or income attributable to the loading of the coal, a taxable incident that, in the words of Richfield Oil, was a step in the export process. Since appellants engaged in a taxable activity that made the coal an export and thereby incurred an added measure of tax liability because of the export incident, the tax in operation and effect was, in my opinion, on the export itself. The Supreme Court in the Washington Stevedoring case was careful to point out that the Washington tax on stevedoring did not relate[] to the value of the goods and fell upon a service distinct from the goods and their value , and, as a consequence, the tax could not be considered taxation upon the goods themselves. 435 U.S. at 757, 98 S.Ct. at 1403. (Emphasis added.) In this case, the tax on the loading of the coal related to, and fell upon, that part of the value of the coal that was attributable to the loading thereof. Accordingly, the tax became a tax upon the export itself. [16] I conclude, therefore, that the application of West Virginia's Section 13A taxes herein offends the Import-Export Clause of the United States Constitution to the extent that such taxes are calculated based upon the value added to the coal by its loading, since the coal was then in the export-stream of commerce. [17] Taxes calculated based upon activities which occur prior to the coal's entry into the export stream do not violate the Import-Export Clause.