Court Opinion

ID: 3996162
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:54:27.53271+00
Date Added: 2024-06-11T07:44:28.438920
License: Public Domain

Holding that "machinery, materials and supplies, such as locomotives, cars, conveyors, pumps, and trestle steel," bought at retail in other states and brought into this state to be used in the construction of the Grand Coulee Dam, were subject to the compensating tax imposed by Title IV, Laws of 1935, chapter 180, p. 726, the supreme court of the United States, in Henneford v.Silas Mason Co., 300 U.S. 577, 583, 81 L.Ed. 814, 57 S.Ct. 524, said:
"A tax upon the privilege of use or storage when the chattel used or stored has ceased to be in transit is now an impost so common that its validity has been withdrawn from the arena of debate."
In the face of that decision, this court held in Pacific Tel. Tel. Co. v. Henneford, 195 Wn. 553, 81 P.2d 786, that the compensating tax could not be collected upon property bought in other states for use in this *Page 23 
state if such property could not be purchased in this state. In so far as the decision so held, it was repudiated in the case ofSpokane v. State, 198 Wn. 682, 89 P.2d 826. But the decision in the telephone case was bottomed on another ground which the majority deem sound enough to rest their decision in the instant case: that, under the circumstances of that case and this, the compensating tax constitutes a direct burden upon interstate commerce and, therefore, is violative of the commerce clause of the Federal constitution. With this view I cannot agree, for I think it is in direct conflict with the holdings of the supreme court of the United States in the cases of SouthernPac. Co. v. Gallagher, 306 U.S. 167, 83 L.Ed. 586, 59 S.Ct. 389, and Pacific Tel.  Tel. Co. v. Gallagher, 306 U.S. 182,83 L.Ed. 595, 59 S.Ct. 396.
The facts in those cases are indistinguishable from those in the instant case and our own telephone case (195 Wn. 553,81 P.2d 786). Stating the issue in the Southern Pacific case, the court there said:
"The California Use Tax Act of 1935 is assailed as violative of the commerce clause and the Fourteenth Amendment, when imposed upon tangible personal property, bought outside of the state by the Southern Pacific Company, an interstate railroad, and installed on importation, or kept available for use, as a partof its transportation facilities." (Italics mine.)
And in the other case the court stated the issue and facts as follows:
"This case involves the same questions as Southern Pacific Co.v. Gallagher, ante, p. 167. . . .
"The appellant, a California corporation, operates a telephone and telegraph system in interstate and intrastate commerce. The same plant, facilities and organization are devoted to both interstate and intrastate business. In the necessary operation, maintenance and repair of its system, the appellant purchases outside California large amounts of equipment, apparatus, *Page 24 
materials and supplies which are shipped to it in interstate commerce at various points within the state. The tangible personal property which the appellees threaten to tax is of two general classes: specific order and stand-by equipment. The first consists of central office switchboards, frames, cable racks, large private branch exchange switchboards, large underground cables, switches, central office cable, wire, protectors and other component parts of telephone and telegraph lines, which are purchased on specific order for installation at a particular place in the system. The second comprises goods bought from time to time for holding as stand-by supplies to meet fluctuating demands and emergencies and to make repairs."
Holding, under these circumstances, that the tax was not a direct burden on interstate commerce, the court, in the SouthernPacific case, said:
"The Use Tax Act is complemental to the California Retail Sales Tax Act of 1933. The latter levies a tax upon the gross receipts of California retailers from sales of tangible personal property; the former imposes an excise on the consumer at the same rate for the storage, use or other consumption in the state of such property when purchased from any retailer. As property covered by the sales tax is exempt under the use tax, all tangible personalty sold or utilized in California is taxed once for the support of the state government. . . .
"The principle of the use tax as applied to property brought into the state after its retail purchase for intrastate use has been upheld in Henneford v. Silas Mason Co., against the charge that it was a tax upon the operations of interstate commerce or a tax upon a foreign sale, violative of the Fourteenth Amendment."
In the face of these decisions, I do not think this court, in the instant case, is warranted in enjoining the collection of the tax on the theory that it is a direct burden on interstate commerce.
I dissent.
DRIVER, J., concurs with BLAKE, J. *Page 25