Court Opinion

ID: 9543235
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:43:36.115728+00
Date Added: 2024-06-11T15:10:00.807388
License: Public Domain

CROCKETT, Justice
(dissenting).
I dissent. It has long been held by the Supreme Court of the United States that a state may tax sales made within its borders even though it is the intent of the buyer to remove the items to another state prior to using them.1 This rule was clearly set forth by Justice Douglas in International Harvester Co. v. Department of Treasury: 2 “* * * a local transaction [sale] is made the taxable event and that event is separate and distinct from the transportation or intercourse which is interstate commerce,” and concluded that “those in interstate trade could not complain if interstate commerce carried its share of the burdens of local government which helped sustain it.”
I see no reason why the facts of the instant case require a result different from that in International Harvester. In that case the court held taxable “Sales by branches [Pacific States Pipe Co.] located in Indiana [Utah] to dealers and users residing outside of Indiana, [Utah] in which the customers came to Indiana and accepted delivery to themselves in this state.” The only fact not identical in the case now before us is that some of the buyers were also-Utah companies who accepted delivery in Utah but intended to ship or transport the pipe to other states for use there. I submit that this change in the facts, if anything, makes the sales even more clearly taxable by Utah than those in the Harvester case.
The majority opinion seeks to avoid the-long-standing rule of the Harvester case by relying on the case of Richfield Oil Corp. v. State Board of Equalization.3 But the cases are completely different. The Richfield case, decided three years after the Harvester case, involved the sale for export of oil to the government of New Zealand,, which was delivered to the purchasers’ ships in a California port. The U. S. Supreme Court struck down the attempted taxation of the sale by California on the basis of the export clause of the U. S. Constitution, which provides simply that: “No State shall * * * lay any Impost or Duties on Imports or Exports.” 4 In doing so, Justice *119Douglas, who had authored the opinion in the Harvester case, made it clear that the . decision did not run contrary to the law announced in the Harvester case. The latter ■was governed by the commerce clause of •the U. S. Constitution. Its language is general, granting to Congress the power “to regulate Commerce * * * among the several States.” 5 As stated above, the Supreme Court has interpreted this to mean that while interstate commerce may be required by the states to pay its own way, no state may encroach upon the power of Congress to regulate it by placing an undue burden on the interstate flow of goods. Whereas, in the Richfield case, the court was not concerned with the reasonableness of a burden, but only with the simple and direct prohibition against imposing a tax on exports.
Justice Douglas pointed out that the two ■ constitutional provisions, while related, are not exactly the same. . He elaborated on the reasons for the different rules thus :
“ * * * law under the Commerce Clause has been fashioned by the Court in an effort ‘to reconcile competing constitutional demands, that commerce between the states shall not be unduly impeded by state action, and that the power to lay taxes for the support of state government shall not be unduly curtailed.’ That accommodation has been made by upholding taxes designed to make interstate commerce bear a fair share of the cost of the local government from which it receives benefits * * * and by invalidating those which discriminate against interstate commerce, which impose a levy for the privilege of doing it, which place an undue burden on it. * * *
“It seems clear that we cannot write any such qualifications into the Import-Export Clause. It prohibits every State from laying ‘any’ tax on imports or exports without the consent of Congress.”
He further pointed out that this distinction accounted for the different result upholding the Mississippi sales tax in Superior Oil Co. v. Mississippi6 where the facts were almost identical with those in the Richfield case except that the oil was being transported to Louisiana for resale by the purchaser rather than to a foreign country.
The facts of our case clearly show sales made in Utah which have been held unequivocally by the U. S. Supreme Court to be a “taxable event”; and that a tax levied on such sales by a state does not run afoul of the commerce power of the Federal Government. I am not aware that there has been any great reluctance on the part of the appropriate agencies of the Federal Gov*120ernment to exercise their authority or to assume the full measure of their responsibility. No reason is suggested, and I think none exists, why this court should be over-solicitous in extending federal controls over business transactions within this state.
To rule that where a sale is made in Utah it is not subject to a sales tax merely because the item purchased is to be taken to another state, would open an avenue to easy avoidance of the tax by the customer simply declaring his intention to take the purchase elsewhere; would provide a basis for charging tax to some customers and not others; would give rise to untold mischief in administration and to extensive loss to the state of revenue to which it is entitled.
The difficulties just pointed out and the unreasonableness and impracticality of the majority’s conclusion is further emphasized by the fact that adjoining states have a use tax law, similar to our own, which provides that property brought into the state is subject to a use tax, equivalent to the sales tax, but exempts the property from the use tax if a sales tax is paid.7 Thus under the majority decision Utah would lose the sales tax on these transactions made within our state to which the state is entitled, and the equivalent tax would be collected by a foreign state. On the other hand, foreign states in all likelihood would collect sales taxes on similar sales, and when such purchases were brought into Utah, our use tax could not be collected.8
The foregoing emphasizes the propriety and the desirability of adhering strictly to the provisions of our statutes which levy sales tax on “every retail sale of tangible personal property made within the state of Utah.”9 But they exempt “sales which the state of Utah is prohibited from taxing under the Constitution or laws of the United States.” 10 It could not be plainer that the legislature intended to tax all sales made within the state insofar as it has authority to do so. It is for the legislature to determine how the taxing power of the state should be used, and it is not the function of this court to examine the policy behind the tax. It is hardly necessary to point out that the residuum of power rests with the states and is limited only by those expressly granted by the Federal Constitution to the Federal Government.11 The United States Supreme Court is the final authority in interpreting that document. When it has spoken and laid down a clear rule regarding the commerce clause which governs the issue here presented, it is not our prerogative, nor should it be our desire to redefine those limits ascribing additional controls over activities within our state.
*121The Tax Commission, upon competent •evidence, expressly found that the transactions in question were sales made within the state of Utah. That finding is unassailable and the tax is payable. The decision should be affirmed.
McDONOUGH, J., concurs in the views •expressed in the opinion of CROCKETT, J.

. See Department of Treasury, etc. v. Wood Preserving Corp., 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565.

. 322 U.S. 340, 64 S.Ct. 1019, 88 L.Ed. 1313.

. 329 U.S. 69, 67 S.Ct. 156.

. Art I, Sec. 10, Constitution of the United States.

. Art. I, Sec. 8, Constitution of the United States.

. 280 U.S. 390, 50 S.Ct. 167, 74 L.Ed. 504

. For discussion of this proposition see Butler v. Tax Comm., 13 Utah 2d 1, 367 P.2d 852.

. Ibid.

. See. 59-15-4, U.C.A.1953.

. Sec. 59-15-6, U.C.A.1953.

. Amendment 10, Constitution of the United States.