Court Opinion

ID: 9418641
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:34:27.43835+00
Date Added: 2024-06-11T17:22:07.260278
License: Public Domain

Me. Justice Holmes.
The State of Mississippi in 1924 and 1926 imposed upon distributors and retail dealers of gasoline, for the *223privilege of engaging in the business, an excise .tax of three cents and four cents respectively per gallon sold in the State. The Supreme Court of thé State declares it to be a privilege tax but points out that whether this tax is on the privilege or on the property it is imposed before the gasoline has left :the dealer’s hands. The plaintiff in error* a dealer, was sued by the State for certain sums that were due under .the statutes. It pleaded that the sales in respect of which the tax was demanded were sales to the United States for the use of its. Coast Guard and Veterans’ Hospital, that these being instrumentalities of the government it did not include the amount of the tax in the price charged, and that the statute did not and could not tax the dealer for them consistently with the Constitution of the United States. The Supreme Court of the State upheld the tax and pointed out the extreme consequences to which á different decision might lead.
It seems to me that the State Court was right. I should say plainly right, but for the effect of certain dicta of Chief Justice Marshall which culminated in or rather were founded upon his often quoted proposition that the power to tax is the power to destroy. Ip those days it was not recognized as it is today that most of the distinctions of the law are distinctions of degree. If the States had any power it was assumed that they had all power, and that the necessary alternative was to deny it altogethér. But this Court which so often has defeated the attempt to tax in certain ways can defeat an attempt to discriminate or otherwise go too far without wholly abolishing the power to. tax. The power to tax is not the power to destroy while this Court sits. The power to fix rates is the power to destroy if unlimited, but this Court while, it endeavors to prevent confiscation does not prevent the fixing of fates. A tax is not an unconstitutional regulation in every case where an absolute prohibition of sales would be . one. Hatch v. Reardon, 204 U. S. 152, 162.
*224To come down more closely to the question before us, when the Government comes into a State to purchase I do not perceive why it should be entitled to stand differently from any other purchaser. It avails itself of the machinery furnished by the State and I do not see why it should not contribute in the same proportion that every other purchaser contributes for the privileges that it uses. It has no better or other right to use them than anyone else. The cost of maintaining the State that makes the business possible is just as necessary an element in the cost of production as labor or coal. If the plaintiff in error had paid the tax and had added it to the price, the Government would have had nothing to say\ It could take the gasoline or leave it but it could not- require the seller to abate his charge even if it had been arbitrarily increased in the hope of getting more from the Government than could be got from the public at large. But in fact the Government has not attempted to say anything in this case, which is simply that of a dealer trying to cut down- a legitimate tax on his business because certain purchasers proposed to use the goods in a certain way, although so far as the sale was concerned they were free to turn- the gasoline into_the ocean, use it for private purposes or sell it again. It does not appear that the Government would have refused to pay a price that included the tax if demanded, but if the Government had refused, it would not have exonerated the seller. Pierce Oil Corporation v. Hopkins, 264 U. S. 137, 139.
An imperfect analogy with taxation that affects interstate commerce is relied upon. Even the law on that subject has been liberalized since the decision of most of the cases cited. Sonneborn Brothers v. Cureton, 262 U. S. 506. But obviously it does not follow from the invalidity of a. tax directly burdening interstate commerce that a tax upon a domestic seller is bad because he may be able to shift the burden to a purchaser, even *225though an agency of the Government, who is willing to pay the price with the tax and who has no rational ground for demanding favor. I am not aware that the President, the Members of Congress, the Judiciary or, to come nearer to the case in hand, the Coast Guard or the officials of the Veterans’ Hospital, because they are instrumentalities of government and cannot function naked and unfed, hitherto have been held entitled to have their bills for food and clothing cut down so far as their butchers and tailors have been taxed on their sales; and I had not supposed that the butchers and tailors could omit from their tax returns all receipts from the large class of customers to which I have referred. The question of interference with Government, I repeat, is one of reasonableness and degree and it seems to me that the interference in this case is too remote. Metcalf & Eddy v. Mitchell, 269 U. S. 514.
Mr. Justice Brandéis and Mr. Justice Stone agree with this opinion.