Great Northern R. Co. v. Cohn , 3 Wash. 2d 672 ( 1940 )

In registering dissent in this case, I assume the constitutionality of chapter 186, Laws of 1939, p. 581, for the reasons stated in the dissenting opinion in case No. 27852. That respondent is a "distributor" in contemplation of the act, seems to me to be too clear for argument. The term is defined in § 2 (a), p. 581, as follows:

"`Distributor' shall mean and include every person, firm, association or corporation who refines, manufactures or compounds liquid or liquefiable petroleum products, and withdraws, sells, distributes, or in any manner uses the same in this state; alsoany person, firm, association or corporation who acquires thesame within the state from any person refining it within orimporting it into the state on which the tax of one-quarter (1/4)cent per gallon has not been paid; or any person, firm,association or corporation who imports the same into this stateand withdraws, sells, distributes or in any manner uses the samein this state." (Italics mine.)

Obviously, by this broad definition, the legislature intended to prevent the escape from a tax of 1/4 cent per gallon of any fuel oil sold or used in this state — whether it was imported by the user or another. That the exaction sought to be levied against respondent is neither a tax on imports nor an unconstitutional burden on interstate commerce, is firmly established by numerous decisions of the supreme court of the United States. Nashville, C. St. L.R. v. Wallace,288 U.S. 249, 77 L. Ed. 730, 53 S. Ct. 345, 87 A.L.R. 1191; Wiloil Corp. v.Pennsylvania, 294 U.S. 169, 79 L. Ed. 838, 55 S. Ct. 358; McGoldrick v. Berwind-White Coal Mining Co.,309 U.S. 33, 60 S. Ct. 388; McGoldrick v. Compagnie GeneraleTransatlantique, 309 U.S. 430, 60 S. Ct. 670.

In the case first cited, the court had under consideration a statute which, for all intents and purposes, is indistinguishable from ours. Sustaining the validity of the statute, the court said:

"Chapter 58, Tennessee Public Acts, 1923, as amended by Chapter 67, Tennessee Public Acts, 1925, is said, by its caption, to impose a privilege tax `on persons . . . and corporations engaged in or carrying on the business . . . of selling or storing or distributing gasoline . . .' within the state at the rate of 2¢ per gallon on the gasoline sold or stored, the tax `to be used solely in the construction and maintenance of a highway system in the state.' But § 3 provides: `The tax imposed by this Act shall apply to persons, firms or corporations, dealers or distributors storing any of the products mentioned in this Act and distributing the same or allowing the same to be withdrawn from storage whether such withdrawal be for sale or other use. . . .' Storage of the gasoline and withdrawal of it from storage within the state for use or sale, are, as the state Supreme Court has held, the events which, by the very terms of the statute, call it into operation. . . .

"The tax is assailed both on the ground that it is imposed on the gasoline while still a subject of interstate commerce in the course of transportation from points of origin to points outside the state of Tennessee; and on the ground that it is in effect a tax upon the use of the gasoline in appellant's business as an interstate carrier, and is thus an unconstitutional burden on interstate commerce.

"The gasoline, upon being unloaded and stored, ceased to be a subject of transportation in interstate commerce and lost its immunity as such from state taxation. General Oil Co. v. Crain,209 U.S. 211; Bacon v. Illinois, 227 U.S. 504; SusquehannaCoal Co. v. South Amboy, 228 U.S. 665, 669; Hart Refineries v. Harmon, 278 U.S. 499; Gregg Dyeing Co. v. Query,286 U.S. 472. The fact that the oil was, in the ordinary course of appellant's business, later withdrawn from storage for use, some within and some without the state, part of it thus becoming again the subject of interstate transportation, did not affect the power of the state to tax it all before that transportation commenced. Neither the appellant, the shippers, nor the carrier, at the time of the shipment of the gasoline from points of origin, arranged a destination for any part of the oil other than the appellant's storage tanks in Tennessee. Although in the usual course of business a variable and undefined part of it, when segregated for that purpose, would again be transported across state boundaries, appellant was free to distribute the oil either within or without the state for use in its business or for any other purpose. . . . The oil in storage was not a subject of interstate commerce and so was a part of the common mass of goods within the state, subject to local taxation. . . .

"It cannot be doubted that, when the gasoline came to rest in storage, the state was as free to tax it, notwithstanding its prospective use as an instrument of interstate commerce, as it was to tax appellant's right of way, rolling stock or other instruments of interstate commerce, which are subject to local property taxes. . . . Here the tax is imposed on the successive exercise of two of those powers, the storage and withdrawal from storage of the gasoline. Both powers are completely exercised before use of the gasoline in interstate commerce begins. The tax imposed upon their exercise is therefore not one imposed on the use of the gasoline as an instrument of commerce and the burden of it is too indirect and remote from the function of interstate commerce itself to transgress constitutional limitations."

MAIN, J., concurs with BLAKE, C.J.