Commonwealth v. White Star Lines, Inc.

20 Pa. D. & C.2d 374, 1959 Pa. Dist. & Cnty. Dec. LEXIS 384
CourtPennsylvania Court of Common Pleas, Dauphin County
DecidedMarch 16, 1959
DocketCommonwealth Docket, 1954, no. 188
StatusPublished
Cited by1 cases

This text of 20 Pa. D. & C.2d 374 (Commonwealth v. White Star Lines, Inc.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Dauphin County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commonwealth v. White Star Lines, Inc., 20 Pa. D. & C.2d 374, 1959 Pa. Dist. & Cnty. Dec. LEXIS 384 (Pa. Super. Ct. 1959).

Opinion

Neely, J.,

— This matter is here on appeal by defendant, White Star Lines, Inc., from the action of the Board of Finance and Revenue in refusing defendant’s petition for redetermination of the amount of fuel use tax for the month of April 1953, made by the Department of Revenue under the provisions of the Fuel Use Tax Act of January 14, 1952, P. L. (1951) 1965, 72 PS §2614.1, et seq. The administrative procedure for determination of the amount of the tax and the provisions for appeal are set forth in section 7 of the act, 72 PS §2614.7. The case was tried by this court without a jury under the Act of April 22, 1874, P. L. 109, 12 PS §688, in accordance with the agreement of the parties. Defendant was a Pennsylvania corporation.

The parties have stipulated the facts. We adopt their stipulation as our findings of fact and incorporate the same herein by reference. In the course of our opinion we will discuss those facts which in our judgment are essential to the disposition of this case.

Defendant operated intrastate motor buses within this Commonwealth and within the State of West Virginia. It engaged in interstate transportation in Pennsylvania, Maryland, West Virginia and Ohio, and was certified by State and Federal regulatory commissions to carry on such transportation. Defendant also was authorized by the Interstate Commerce Commission to transport groups and parties from any point on its authorized lines to other points in the United States. [376]*376Defendant was licensed under the Fuel Use Tax Act of 1952. ■

As of December 31, 1955, defendant was dissolved by decree of the Court of Common Pleas of Franklin County. All its assets, including its claims against the Commonwealth for refund of fuel use taxes, were transferred and assigned to Potomac Edison Company, a Maryland corporation qualified to do business in Pennsylvania.

In its report of fuel use for the month of April 1953, defendant apportioned the fuel tax for that month on the basis of the percentage of fuel use of mileage traveled over Pennsylvania highways, as compared to the total miles traveled, and paid to the Commonwealth a tax based upon this apportionment. Defendant paid taxes for the privilege of using the highways in West Virginia and Maryland, which were in part covered by the amount of fuel placed in the supply tanks of the vehicles in Pennsylvania, carried into the States of West Virginia and Maryland and there consumed while transporting passengers in interstate commerce. The Maryland and West Virginia taxes are not excise taxes upon the use of fuel.

The Department of Revenue audited defendant’s books and accounts at its offices in Washington, Pa., and imposed a fuel use tax upon all fuel placed in the buses of defendant within Pennsylvania during the month of April 1953. The excess tax assessment, which amounted to $242.27, was assessed on that fuel which defendant consumed in propelling its buses on the highways of States other than Pennsylvania. All the fuel, however, was placed in the fuel supply tanks of defendant’s motor vehicles in Pennsylvania and the vehicles were propelled over- public, highways in this State before-entry into other States. The amount of tax due the- Commonwealth as assessed-by the Depart[377]*377ment of Revenue is $242.27 for the month of April 1953, which sum has been paid in full.

Defendant filed a petition for redetermination with the Department of Revenue. The Department denied the petition. Defendant’s petition for review was denied by the Board of Finance and Revenue, whereupon this appeal was prosecuted. At the trial of this case without a jury, the facts stipulated by the parties were placed upon the record. Various exhibits and petitioner’s tax return were received in evidence. Defendant contends that the tax in question violates the Federal Constitution because it offends against the fourteenth amendment (due process) and the commerce clause, article I, sec. 8.

An excise tax of three cents per gallon and a temporary tax of two cents per gallon were imposed by the Fuel Use Tax Act of 1952 on dealer-users upon, the use of fuel to propel motor vehicles on the public highways of this Commonwealth. The following provisions of the act are pertinent to our determination of this case:

Section 2, 72 PS §2614.2:

“ ‘Dealer-user’ shall mean . . . any person who delivers or places fuels into the fuel supply tanks or other fueling receptacles or devices ... of a motor vehicle, or who uses fuels within the meaning of the word ‘use’ as defined in this section. . . .

“ ‘Use’ shall mean and include . . . (b) the delivery or placing of fuels into the fuel supply tanks or other fueling receptacles ... of a motor vehicle in this Commonwealth for use in whole or part for the generation of power ... to propel such motor vehicle on the public highways of this Commonwealth.”

Section 4, 72 PS §2614.4:

“A permanent excise tax at the rate of three cents ($.03) a gallon ... is hereby imposed on all dealer-users upon the use of fuel within this Commonwealth, . . . The tax herein imposed shall not apply on fuels [378]*378not within the taxing power of this Commonwealth under the Commerce Clause of the Constitution of the United States.”

Section 5, 72 PS §2614.5:

“Every dealer-user upon whom a tax is imposed by this act shall pay the tax into the State Treasury,. . .” It seems to us that this language plainly taxes the transaction of placing the fuel into the supply tanks of vehicles to be driven on our public highways. This transaction occurs before the fuel is used in interstate commerce. The incidence of the tax is on a local activity, the delivery of the fuel for expected highway use.

In Nashville, Chattanooga & St. Louis Railway Co. v. Wallace, 288 U. S. 249 (1933), the Supreme Court was concerned with the Tennessee statute which imposed an excise tax on the withdrawal of gasoline from storage for sale or other uses. The taxpayer was an interstate rail carrier and contended that the tax was invalid, inter alia, on the ground that it was a tax upon the use of gasoline in the railroad’s business and was an unconstitutional burden on interstate com-' merce. The court, at pages 267-268, said:

“We cannot say that the tax is a forbidden burden on interstate commerce because appellant uses the gasoline, subsequent to the incidence of the tax, as an instrument of interstate commerce. Taxes said to burden interstate commerce directly when levied upon or measured by the operation of interstate commerce or gross receipts derived from it, are beyond the state taxing power, East Ohio Gas Co. v. Tax Commission, 283 U. S. 465, 470; Sprout v. South Bend, 277 U. S. 163. 170. 171; Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 297, . . .

“. . . 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 [379]*379interstate commerce begins.

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Bluebook (online)
20 Pa. D. & C.2d 374, 1959 Pa. Dist. & Cnty. Dec. LEXIS 384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commonwealth-v-white-star-lines-inc-pactcompldauphi-1959.