286 U.S. 472
GREGG DYEING CO.
QUERY et al.
CITY OF GREENVILLE et al.
Nos. 170, 245.
Argued Dec. 10, 1931.
Decided May 31, 1932.
Messrs. James M. Lynch, of Florence, S. C., and P. F. Henderson, of Aiken, S. C., for appellants. [286 U.S. 472, 473] Messrs. John M. Daniel, Atty. Gen., and J. Fraser Lyon, of Columbia, S. C., for appellees.
Mr. Chief Justice HUGHES delivered the opinion of the Court.
By these actions, within the original jurisdiction of the Supreme Court of South Carolina, appellants sought to restrain the enforcement of the state statute known as the 'Gasoline Tax Act of 1930' (Acts So. Car., 1930, p. 1390). The statute was assailed upon state and federal grounds, the latter being that the act violated the commerce clause (article 1, 8, par. 3), and the equal protection clause of the Fourteenth Amendment of the Federal Constitution. The state court overruled these contentions and dismissed the complaints. The cases are brought here by appeal. [286 U.S. 472, 474] The provisions of the statute which give rise to the federal questions are found in sections 1 and 6 as follows:
[286 U.S. 472, 475] 's 6. Nothing within this Act shall be construed to impose a license tax upon any selling agent, consumer, or retailer, selling, consigning, shipping, distributing or using gasoline, combinations thereof, or substitutes therefor, which may have been bought from any oil company on which the license taxes imposed by Act No. 34, Acts of the General Assembly of 1925, approved the 23rd of March, 1925, and Act No. 102, Acts of the General Assembly of 1929, approved the 16th day of March, 1929, have been paid nor shall this Act be construed as applying in the case of interstate commerce.'
In the case of Gregg Dyeing Company (No. 170), the facts alleged in the complaint were admitted by demurrer, and other facts were stipulated as if the complaint had set them forth. It thus appeared that plaintiff conducted a bleachery in Aiken, S. C., and used gasoline in its processes; that its practice is to buy gasoline in bulk from dealers outside the state of South Carolina and to have the gasoline shipped in interstate commerce to plaintiff's plant where the gasoline is unloaded and stored, and kept in storage, in plaintiff's tanks, for more than twenty-four hours and until it is needed for use, and in its entirety is used by plaintiff in its manufacturing business and for its own purposes, and is not brought into the state for resale and is not resold; that there is in Charleston, S. C., a refinery maintained by the Standard Oil Company at which large quantities of gasoline are produced; that much of the gasoline thus produced, and much that is brought into the state by oil companies for resale, is stored within the state for more than twenty-four hours before it is sold or used, and is not taxed for its importation and/or storage in South Carolina, but is taxed when it is used or sold in that state by such oil companies; and that such gasoline, produced [286 U.S. 472, 476] in the refinery above mentioned, as is shipped to other states is not taxed in South Carolina. Final judgment was rendered in favor of defendants upon the demurrer. 164 S. E. 588.
In the case brought by the City of Greenville (No. 245), plaintiff alleged that it was a municipal corporation which had brought into the state of South Carolina gasoline in tank car lots, purchased outside the state, and thereafter had stored, and used and consumed it for public purposes. Defendants demurred, there was an agreed statement of facts in addition to the allegations of the complaint, and the judgment upon the demurrer thus raised the same federal questions as those presented in the case first mentioned.
In maintaining rights asserted under the Federal Constitution, the decision of this Court is not dependent upon the form of a taxing scheme, or upon the characterization of it by the state court. We regard the substance rather than the form, and the controlling test is found in the operation and effect of the statute as applied and enforced by the state. St. Louis Southwestern Railway Co. v. Arkansas, 235 U.S. 350, 362 , 35 S. Ct. 99; Hanover Fire Insurance Co. v. Harding, 272 U.S. 494, 509 , 510 S., 47 S. Ct. 179, 49 A. L. R. 713. The operation and effect of this tax act has been determined definitely by the state court in the instant cases. Construing the act, that court has said:
We may lay aside, as not here involved, any question relating to importations from foreign countries. As to interstate commerce, the questions are (1) whether the act as applied by the state court imposes a direct burden upon that commerce, and (2) whether, although the subject of the tax would otherwise be within the power of the state, the tax is invalid because it creates an unconstitutional discrimination against transactions in interstate commerce.
As to the first question, we are not concerned with what the tax is called, but with what the statute does. It imposes an exaction with respect to gasoline purchased in other states and brought into South Carolina and there placed by appellants, in storage for future use within the State. By the terms of the act, as construed by the state court and applied to these appellants, interstate commerce in relation to the subject of the tax has ended. The gasoline has come to rest within the state, having been placed in appellants' storage tanks and added to appellants' property kept for local purposes. In such circumstances the state has the authority 'to tax the products or their storage or sale.' Texas Co. v. [286 U.S. 472, 479] Brown, 258 U.S. 466, 478 , 42 S. Ct. 375, 379; Sonneborn Bros. v. Cureton, 262 U.S. 506 . 519, 520, 43 S. Ct. 643; Hart Refineries v. Harmon, 278 U.S. 499, 501 , 502 S., 49 S. Ct. 188, 189. Not only may local sales of gasoline thus brought into the state be taxed, but its use as well. This was specifically determined in Bowman v. Continental Oil Co., 256 U.S. 642, 648 , 649 S., 41 S. Ct. 606. See Hart Refineries v. Harmon, supra; Breece Lumber Co. v. Asplund, 283 U.S. 788 , 51 S. Ct. 352. There is an exception in the case of a tax directly on use in interstate commerce, as on use in interstate transportation. Helson v. Kentucky, 279 U.S. 245, 252 , 49 S. Ct. 279; Eastern Air Transport v. South Carolina Tax Commission, 285 U.S. 147 , 52 S. Ct. 340, 76 L. Ed. -, decided March 14, 1932. In view of these well-established principles, we find no ground for concluding that the state could not impose the tax with respect to the gasoline of appellants which was kept within the state for use in their local enterprises. As the Court said, in Hart Refineries v. Harmon, supra, interstate transportation having ended, the taxing power of the state in respect of the commodity may, so far as the commerce clause of the Federal Constitution is concerned, 'be exerted in any way which the state's Constitution and laws permit.' This, of course, is on the assumption that the tax does not discriminate against the commodity because of its origin in another state.
The state court answered the contention as to discrimination against interstate commerce by referring to other statutes of the state imposing a tax upon the sale and use of gasoline within the state. The state court said that the act in question 'taxes all gasoline stored for use and consumption upon which a like tax has not been paid under other statutes. By the kindred Acts all users are taxed.' But appellants question the right to invoke other statutes to support the validity of the act assailed. To stand the test of constitutionality, they say, the act must be constitutional 'within its four corners,' that is, [286 U.S. 472, 480] considered by itself. This argument is without merit. The question of constitutional validity is not to be determined by artificial standards. What is required is that state action, whether through one agency or another, or through one enactment or more than one, shall be consistent with the restrictions of the Federal Constitution. There is no demand in that Constitution that the state shall put its requirements in any one statute. It may distribute them as it sees fit, if the result, taken in its totality, is within the state's constitutional power. Where the Supreme Court of the state has held that two or more statutes must be taken together, we accept that conclusion as if written into the statutes themselves. Hebert v. Louisiana, 272 U.S. 312, 317 , 47 S. Ct. 103, 48 A. L. R. 1102. See Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 73 , 31 S. Ct. 337, Ann. Cas. 1912C, 160.
Reading together the statutes with respect to gasoline taxes, the state court took the view that, as to the gasoline tax with respect to sales within the state, the burden actually rests upon the consumer, although not placed upon the consumer directly. No reason is found to challenge this view. Texas Co. v. Brown, supra, 258 U. S. at page 479, 42 S. Ct. 375; Panhandle Oil Co. v. State of Mississippi ex rel. Knox, 277 U.S. 218, 222 , 48 S. Ct. 451, 56 A. L. R. 583; Indian Motocycle Co. v. United States, 283 U.S. 578, 579 , 51 S. Ct. 601. So far as dealers in gasoline within the state are concerned, there appears to be no ground for appellants' claim of discrimination. The point with respect to appellants is that they are not dealers, but users, consumers of gasoline in their business. They are required to pay the tax with respect to the gasoline they keep for such use and consumption within the state. As to such gasoline, they pay precisely the same amount per gallon as other consumers within the state are in effect required to pay through the tax on the dealers from whom such consumers buy. Discrimination is asserted in relation to manufacturers who produce gasoline within the state and consume it in their enterprises. Appellants have directed particular [286 U.S. 472, 481] attention to the case of a refining company which produces gasoline in South Carolina and consumes gasoline in its business and also sells it within the state. The state court, construing the applicable statute, has held that in such a case the producing company is taxed with respect to the gasoline it uses as well as with respect to the gasoline it sells. The decision is unequivocal that 'all oil companies in South Carolina are required to pay and do pay the tax upon any gasoline they sell and all that they use in South Carolina.' With respect, then, to the gasoline used by appellants in their business, there is in this aspect no discrimination against them because their gasoline has its origin in another state, as others either buying or producing gasoline within the state pay the tax at the same rate in relation to their consumption.
Discrimination, like interstate commerce itself, is a practical conception. We must deal in this matter, as in others, with substantial distinctions and real injuries. Shaffer v. Carter, 252 U.S. 37, 55 , 40 S. Ct. 221. Appellants' attack upon the tax comes to this, in the last analysis, that the tax in their case is laid with respect to the gasoline they have bought outside the state and keep in storage for use and consumption in their business, whereas others are taxed, not with respect to the gasoline they keep in store for use and consumption, but for the gasoline they use and consume. But appellants have admitted, as the state court has said, that 'the only kind of storage affected' is that for the purpose of use and consumption. In this view the state court found no distinction of substance with respect to the practical operation of the taxing statutes in pari materia, as all in like case, appellants and others who use gasoline in their business enterprises, pay the same amount on the gasoline they consume. Appellants had the burden of showing an injurious discrimination against them because they bought their gasoline outside the state. This burden they have [286 U.S. 472, 482] not sustained. They have failed to show that, whatever distinction there existed in form, there was any substantial discrimination in fact.
The same considerations, with respect to discrimination, apply to the claim that the statute in question violates the equal protection clause of the Fourteenth Amendment. The statement of this Court in General American Tank Car Corporation v. Day, 270 U.S. 367, 373 , 46 S. Ct. 234, 236, is apposite: 'In determining whether there is a denial of equal protection of the laws by such taxation, we must look to the fairness and reasonableness of its purposes and practical operation, rather than to minute differences between its application in practice and the application of the taxing statute or statutes to which it is complementary.'
The right of the city of Greenville (No. 245) to raise the questions presented under the Federal Constitution does not appear to have been challenged or passed upon by the state court and has not been discussed at this bar. Accordingly, that question has not been considered here.