Opinion · Supreme Court of the United States
State Tax Comm'n of Miss. v. Interstate Natural Gas Co.
State Tax Comm'n of Miss. v. Interstate Nat. Gas Co., 284 U.S. 41 (1931)
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1931-11-23
- Topic
- general
How later courts describe this case
- movement of gas into local supply lines constitutes part of interstate business
Citator
UpLaw has not yet analyzed State Tax Comm'n of Miss. v. Interstate Natural Gas Co.. The absence of a flag is not a finding that it is good law.
- Cited by
- 40 opinions
Headnotes
- Constitutional Law — Commerce Clause The sale of natural gas wholesale to local, independent distributors from a supply that passes into and through the state in interstate commerce does not become a local affair subject to a local privilege tax merely because the vendor, in order to deliver the quantities sold, uses a thermometer and a meter and reduces the pressure; such activity is plainly incident to interstate commerce. 284 U.S. at 42-43
- Constitutional Law — Commerce Clause Activities conducted under a contract are not converted into intrastate commerce subject to state taxation by the mere form of the parties' agreement where the work performed by the vendor is done upon gas flowing continuously in interstate commerce to prepare it for wholesale delivery to independent distributors, who in turn dispose of it by retail. 284 U.S. at 42-43
STATE TAX COMMISSIONv. GAS CO.,284 U.S. 41(1931)
52 S.Ct. 62
STATE TAX COMMISSION OF MISSISSIPPI ET AL.v. INTERSTATE NATURAL GAS CO.,
INC.
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF MISSISSIPPI.
No. 40.
Argued October 26, 1931.
Decided November 23, 1931.
APPEAL from a decree enjoining the Commission from enforcing a
privilege tax.
The New York contracts are simply executory contracts of sale. The appellee cannot tell what gas it will sell to the distributor at Woodville, or what gas it will carry on through Mississippi into Louisiana. None of the gas is actually sold before it leaves the gas fields in Louisiana. It is true that the appellee is transporting gas with a view to selling it, but, before it relinquishes the title and control of any of it by delivery to the distributor,Page 42it must, under the very terms of its executory contract, prepare and treat it for sale and delivery. Appellee alone controls and operates its taps, regulators, thermometers and meters.
The sale is actually consummated at a time when the commodity is in Mississippi. This is not a case of delivery of an interstate shipment sent in response to an order. It is a case where the original package, being transported in interstate commerce, is broken, and the commodity prepared for sale and actually sold and delivered in Mississippi.
The method of measuring the tax by the number of miles of pipe line is reasonable. The tax can be validly imposed, even though it incidentally and indirectly affect and burden interstate business.St. Louis R. Co. v.Arkansas,235 U.S. 350;NewYorkv.Sohmer,235 U.S. 549;Cheney Bros. v.Massachusetts,246 U.S. 147;Pullman Car Co. v.Adams,189 U.S. 420;Hump Hair Pin Mfg. Co. v.Emmerson,258 U.S. 290;U.S. Express Co. v.Minnesota,223 U.S. 335;Mainev.Grand Trunk Ry. Co.,142 U.S. 217;Sproutv.South Bend,277 U.S. 163.
It was not within the power of the parties by the form of their contract to convert a local business into an interstate business protected by the commerce clause, when the contract achieved nothing else.Superior Oil Co. v.Mississippi ex rel.Knox,280 U.S. 390;General Oil Co. v.Crane,209 U.S. 211;Sonneborn Bros. v.Keeling,266 U.S. 505;Atlantic CoastLine R. Co. v.Standard Oil Co.,275 U.S. 254;CarsonPetroleum Co. v.Vial,279 U.S. 95;East Ohio Gas Co. v.Tax Commission,283 U.S. 465.
DistinguishingOzark Pipe Line Co. v.Monier,266 U.S. 555;Missouriv.Kansas Gas Co.,265 U.S. 298;Peoples GasCo. v.Pennsylvania,270 U.S. 550;Pennsylvania Gas Co. v.Public Service Comm.,252 U.S. 23;Pennsylvaniav.WestVirginia,262 U.S. 533;Public Utilities Comm. v.Landon,245 U.S. 236;Eureka GasPage 43Co. v.Hallahan,257 U.S. 265;United Fuel Gas Co. v.Hallahan,257 U.S. 277.Mr. David Clay Bramlettefor appellee.
The facts are agreed. The plaintiff has a trunk line of pipe extending from gas fields in Louisiana through Mississippi and back to Louisiana; 72.42 miles having a diameter of 22 inches, 8.11 miles having a diameter of 12 inches and 4.99 miles a diameter of 10 inches. It sells daily to distributors in Louisiana about 70,000,000 cubic feet of natural gas in summer and about 75,000,000 feet in winter. In Mississippi it sells as will be explained from 204,000 to 520,000 feet according to the season. The gas flows continuously from the gas fields in Louisiana and obviously, for much the greater part at least, in interstate commerce. But the appellants rely upon business done under two similar contracts made in New York to show that there was intrastate commerce in Mississippi that may be taxed without burdening the main activity that the State cannot touch.OzarkPipe Line Corp. v.Monier,266 U.S. 555,563.East Ohio GasCo. v.Tax Commission,283 U.S. 465,470. Distributing companies tap the plaintiff's pipes near Natchez and the town of Woodville. The gas withdrawn by the distributors is measured by a thermometer and a meter furnished by the plaintiff which is the only way in which it can be measured. The pressure of the gas is reduced by the plaintiffPage 44before it passes into the purchaser's hands. The work done by the plaintiff is done upon the flowing gas to help the delivery and seems to us plainly to be incident to the interstate commerce between Louisiana and Mississippi. The plaintiff simply transports the gas and delivers it wholesale not otherwise worked over than to make it ready for delivery to the independent parties that dispose of it by retail.Missouriv.Kansas GasCo.,265 U.S. 298.Public Utilities Comm. v.Landon,249 U.S. 236,245.Ozark Pipe Line Corp. v.Monier,266 U.S. 555.Decree affirmed.