Court Opinion

ID: 7221654
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:49:48.448167+00
Date Added: 2024-06-11T16:17:16.196476
License: Public Domain

HUTCHESON, Circuit Judge
(Dissenting) .
The primary purpose of the statute appears to have been to impose a license tax upon the production of power. It thus imposed not a property, but an -excise or privilege, tax. Union Sulphur Co. v. Reid (D.C.) 17 F.Supp. 27, this day decided. State ex rel. Porterie v. Hunt, 182 La. 1073, 162 So. 777, 103 A.L.R. 9; Bromley v. McCaughn, 280 U.S. 124, 50 S.Ct. 46, 74 L.Ed. 226.
The majority concludes that, because the tax is a privilege, and not a property, tax, and falls on the generation by complainant of power, used in part to gather gas into and in part to transport it through its transportation lines, it is a direct and undue burden on interstate commerce. I do not think so.
The majority considers the tax a license tax upon the business or occupation of transporting gas in interstate commerce; that is, the business of purchasing gas in one State and selling it in another. I do not think so. If I could agree that the tax was occupational, levied on the general business of complainant, that of acquiring and conducting gas interstate, I could agree with the majority that the case is ruled by Cooney v. Mountain States T. & T. Co., 294 U.S. 384, 55 S.Ct. 477, 79 L.Ed. 934, and that the tax is invalid. I cannot, however, agree to this. I think it quite plain that the tax is not imposed on complainant as a license tax, for the general privilege of transacting its business. It is exacted as a specific privilege tax, for the privilege of generating power in the State. It does not at all fall upon or condition its privilege of conducting the business of transporting gas interstate.
In the Cooney Case this distinction is made clear. There it is said: “There is no question that the state may require payment of the occupation tax from one engaged in both intrastate and interstate commerce.” Cf. East Ohio Gas Co. v. Tax Commission, 283 U.S. 465, 51 S.Ct. 499, 75 L.Ed. 1171: “But a state cannot tax interstate commerce; it cannot lay a tax upon the business which constitutes such c.ommerce or the privilege of engaging in it.”
The statute under attack here does not undertake to, it does not, lay a tax upon *39the business which constitutes interstate commerce, or the privilege of engaging in it. It exacts of complainant, who is engaged 1 in both intra and inter state commerce, as well as of all others in the State of Louisiana similarly situated as to the use of prime movers, a privilege tax upon the generation power in Louisiana. The uses of that power are not taxed. The business in which the power is generated is not taxed. The generation of the power, and that alone, is taxed. The measure of it is the horsepower .capacity of the “prime movers” employed to generate it.
The majority regards as inapplicable Utah Power & Light Co. v. Pfost, 286 U. S. 165, 52 S.Ct. 548, 76 L.Ed. 1038. I think that case controlling. There the generation of electrical energy which was the subject of the tax was followed immediately by its transmission to other states. Here, as there, the tax is upon the production of energy. Here, as there, that production is‘taxable, for here, as there, the tax is laid on the manufacture or production of energy, and not on its transfer or conveyance to distant states. Here, as there, the tax is laid upon the generation of power as a distinct act of production, and without regard to its subsequent üse. Here, as there, so far as complainant produced energy in Louisiana, its business is purely intrastate, subject to state taxation and control. It is only in transmitting gas across the state lines by the use of this power that defendant is engaged in interstate commerce.
Other cases supporting this view are Oliver Iron Mining Company v. Lord, 262 U.S. 172, 43 S.Ct. 526, 67 L.Ed. 929; Hope Natural Gas Co. v. Hall, 274 U.S. 284, 47 S.Ct. 639, 71 L.Ed. 1049; Coe v. Errol, 116 U.S. 517, 6 S.Ct. 475, 29 L.Ed. 715; cf. Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 54 S.Ct. 267, 78 L.Ed. 622; Carson Petroleum Co. v. Vial, 279 U.S. 95, 49 S.Ct. 292, 73 L.Ed. 626; Schechter Poultry Corporation v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947.
I am also of the opinion that defendant is right in its contention that, if the tax may be held to be on interstate commerce, it falls on it, not directly, but indirectly, and therefore does not violate the commerce clause (Art. 1, § 8, cl. 3). Port Richmond & B. P. F. Co. v. Board of Chosen Freeholders, 234 U.S. 317, 34 S.Ct. 821, 58 L.Ed. 1330; Wiggins Ferry Co. v. East St. Louis, 107 U.S. 365, 2 S.Ct. 257, 27 L.Ed. 419; State v. Albert Mackie Co., 144 La. 339, 80 So. 582; Krauss Bros. Lumber Co. v. Board of Assessors, 148 La. 1057, 88 So. 397; Baltic Mining Co. v. Massachusetts, 231 U.S. 68, 34 S.Ct. 15, 58 L.Ed. 127; Hump Hairpin Mfg. Co. v. Emmerson, 258 U.S. 290, 42 S.Ct. 305, 307, 66 L.Ed. 622.
When a tax is as here levied on all similarly situated, and in terms is not upon the business done, so that it appears on the face of the statute that “it is clear that it is not imposed with the covert purpose or with the effect of defeating federal constitutional rights.” Hump Hairpin Mfg. Co. v. Emmerson, supra, it is not a prohibited burden on interstate commerce. It is a valid exercise of the power of the State to tax.
With respect, therefore, I dissent.