Jerome H. Sheip Co. v. Amos

Decision Date17 October 1930
PartiesJEROME H. SHEIP CO. et al. v. AMOS, State Comptroller.
CourtFlorida Supreme Court

En Banc.

Suit by the Jerome H. Sheip Company and others against Ernest Amos as State Comptroller. From an order sustaining a general demurrer to the bill of complaint, and denying injunctive relief, complainants appeal.

Affirmed. Appeal from Circuit Court, Leon County; E. C Love, Judge.

COUNSEL

Watson & Pasco & Brown, of Pensacola, and R. Don McLeod, Jr., for Apalachicola, for appellants.

Fred H Davis, Atty. Gen., and H. E. Carter Asst. Atty. Gen., for appellee.

OPINION

STRUM J.

The purpose of this suit is to determine the validity of the tax imposed by chapter 13756, Acts of 1929 (page 456) upon the storage of certain petroleum products.

To a bill of complaint seeking to enjoin collection of the tax by the comptroller, a general demurrer was sustained, and injunctive relief denied, from which order this appeal is taken.

In testing the validity of, as well as if construing, a statute, resort may be had if necessary to the history of the legislation, the public history of the times in which it was passed, and it may be compared with cognate laws in order to determine its purpose, meaning, and effect as an aid in determing its validity. Aldridge v. Williams, 3 How. 9, 11 L.Ed. 469; U.S. v. Trans-Missouri Freight Ass'n, 166 U.S. 318, 17 S.Ct. 540, 41 L.Ed. 1019; Texas & P. R. Co. v. I. C. C., 162 U.S. 218, 16 S.Ct. 666, 40 L.Ed. 947. See also Amos v. Matthews (Fla.) 126 So. 308, 316; 25 R. C. L. 1015.

Chapters 14575 and 14573, Acts of 1929, impose an excise aggregating 6 cents per gallon upon the sale of gasoline, such tax to be paid to the state by the dealer. The tax imposed upon that privilege is impotent when gasoline is purchased in interstate commerce and stored in this state by the owner for his own future use. Since there is no sale which the state could tax, gasoline so purchased and stored, though mingled with the common mass of property in this state and though enjoying the protection afforded by the laws of this state, would escape payment of its proportion of the public revenue designed to be derived from the use of gasoline in this state.

Chapter 13756 provides in effect that, in addition to a license tax of $5, every person, firm, corporation, municipality, county, or subdivision thereof shall pay a tax of 5 cents per gallon, or such amount as will correspond to the sales tax, for every gallon of gasoline or like products of petroleum 'which shall have been shipped or imported into this State from any other State or foreign country, and which shall thereafter, for a period of twenty-four hours after it loses its interstate character as a shipment of interstate commerce, be kept in storage in this State to be used and consumed in this State' (section 1), and with reference to which no sales tax has been paid. Products in transit through this state in interstate or foreign commerce are exempt, and, as to products coming to rest here, payment of either the sales tax or the storage tax exonerates from liability for the other; only one of these two taxes being collected.

Chapter 13756, supra, now under consideration, is complementary to chapters 14575 and 14573, supra, in effectuating the state's public policy as to the revenue to be derived from the use of gasoline in this state. While passed primarily for revenue purposes, and to forestall evasion of the sales tax (see Texas Co. v. Brown, 258 U.S. 466, 481, 42 S.Ct. 375, 66 L.Ed. 721, 728), the statute is also regulatory in effect. The storage of gasoline in large quantities is inimical to public safety. If no financial advantage can be gained from storing it, one of the most substantial inducements to store it is removed. That result is accomplished by imposing a storage tax equivalent to the sales tax, thus tending to curb the practice of storing. See Foster & Creighton v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 A. L. R. 971.

The bill of complaint alleges, in substance, that complainants buy large quantities of gasoline in tank cars at points beyond the state of Florida at the prevailing market price of 8 1/2 to 12 1/2 cents per gallon, and have the same shipped to them in interstate commerce to their respective places of business in the state of Florida, to be used and consumed in their respective businesses.

Complainants first contend that the tax is a direct property tax, and as such is void because not based upon value nor imposed according to principles of equality and uniformity.

To support that contention, complainants rely largely upon Dawson v. Kentucky Distilleries, 255 U.S. 288, 41 S.Ct. 272, 65 L.Ed. 638. In that case, the statute purported to impose upon persons in the business of manufacturing, owning, or storing whisky, a 'license' tax upon every gallon of whisky 'either withdrawn from a bonded warehouse or transported in bond from Kentucky to a point outside that state.' The court held that the tax so imposed was a direct property tax, because its incidents were inconsistent with the essentials of an excise. The court carefully pointed out that, because of the incidents prescribed for the operation of that tax, it 'is not one imposed upon the business of owning, storing and removing whisky from bond,' or 'upon the business or occupation of the warehouseman,' because the tax might become payable although the whisky had not been stored for any appreciable time. It may be conceded, in passing, as true of the tax here under consideration that it is not made to depend upon the length of time the gasoline remains in storage. In the Kentucky Distilleries Case, however, the court was influenced in its decision that that tax was not a storage tax by the circumstance that the Kentucky statute was so framed that 'a particular lot of whisky may pass through a dozen bonded warehouses without one of them being obliged to pay the tax.' The court further said: 'So long as the shisky is stored in bond within the state it is free from tax. One may own and store the whisky for years in the hope of selling it at a profit, and yet be free from any obligation ever to pay this tax, if, before it is removed from bond within the state, the whisky is sold to another, or if, while so owned, it is destroyed or forfeited to the government.' That vital element is not found in the tax here under consideration. Here, if the storage continues for twentyfour hours after the property loses its interstate character, the tax attaches. As pointed out by the lower court with reference to the tax involved in the Kentucky Distilleries Case: 'The thing really taxed is the act of the owner in taking his property out of storage into his own possession' for use. '* * * The whole value of the whisky depends upon the owner's right to get it from the place where the law compelled him to put it, and to tax the right is to tax the value.' Freiberg v. Dawson (D. C.) 274 F. 420, 433. The essential difference between the Kentucky tax and the tax now under consideration is that the present act of storing the commodity, which is a species of 'use,' and not its future withdrawal, which is merely a change in the form of possession not amounting to a taxable 'use,' is made the criterion of our tax.

This tax is repeatedly referred to in the act as a license tax, although that fact is not conclusive. It is the substantial effect and operation of the tax, and not its mere designation that controls. Its classification is to be determined by its characteristics, not by its designation. See Amos v. Matthews (Fla.) 126 So. 308; McCray v. U. S., 195 U.S. 27, 24 S.Ct. 769, 49 L.Ed. 78, 1 Ann. Cas. 561; St. Louis S.W. R. Co. v. Arkansas, 235 U.S. 350, 35 S.Ct. 99, 59 L.Ed. 265; Dawson v. Kentucky Distilleries & Warehouse Co., 255 U.S. 288, 41 S.Ct. 272, 65 L.Ed. 638.

The factors which determine liability for the gallonage tax are these: The gasoline, or other petroleum products, in question must be (a) imported into this state from another state or a foreign country; (b) it must be kept in storage in this state for a period of 24 hours after it has lost its identity as a shipment in interstate commerce; (c) it must be thus kept in storage to be used and consumed in this state; (d) it must be gasoline with reference to which no sales tax has been paid.

Factors (a) and (d) determine the general class of gasoline contemplated by the statute; factor (b) determines the specific subject of the tax, namely, the present act of storage; factor (c) limits factor (b), in that the tax is measured by gasoline that is not only kept in storage, but which is so kept to be used and consumed in this State. Primarily, liability for the tax arises by reason of the present act of storage, a species of use. Liability for the tax is not dependent upon the future and uncertain act of withdrawal, a mere change in the form of possession, as in the Kentucky Distilleries Case, supra, nor is it a tax upon consumption, although it is applicable only to the storage of gasoline 'to be used and consumed' in this state. If gasoline falling within factors (a) and (d) is consumed in this state without being stored, or if it be stored but not to be consumed in this state, the tax apparently would not apply under the terms of the statute. Even though the owner and the storer be the same person, the tax is one which affects the use of gasoline, and is specifically upon the privilege of storage. Storage is a particular use incident to ownership. The owner's privilege of storage is none the less taxable than when storer and owner are different persons.

It therefore becomes apparent that the tax is not upon the gasoline itself as property, but is an excise upon the privilege of storing gasoline;...

To continue reading

Request your trial
39 cases
  • American Bakeries Co. v. Haines City
    • United States
    • United States State Supreme Court of Florida
    • March 16, 1938
    ...126 Fla. 18, 170 So. 587; Singleton v. Knott, 101 Fla. 1077, 133 So. 71; Spencer v. Hunt, 109 Fla. 248, 147 So. 282; Sheip & Co. v. Amos, 100 Fla. 863, 130 So. 699. The generality of the title of a statute does not invalidate it so long as the title fairly comprehends and gives notice of th......
  • State Ex Rel. Lane Drug Stores, Inc. v. Simpson
    • United States
    • United States State Supreme Court of Florida
    • November 26, 1935
    ...... S.Ct. 792, 59 L.Ed. 1488; Peninsular Casualty Co. v. State, 68 Fla. 411, 67 So. 165; Amos v. Gunn, . 84 Fla. 285, 94 So. 615; Amos v. [122 Fla. 614] . Mathews, 99 Fla. 1 [65, 115], 6 So. 308; Sheip. & Co. v. Amos, supra [100 Fla. 863, 130 So. 699];. Liggett Co. v. Amos, 104 Fla. 609, 141 So. ......
  • Louis K. Liggett Co. v. Amos
    • United States
    • United States State Supreme Court of Florida
    • April 4, 1932
    ...to suppress the business taxed; that fact alone will not render an act of Congress unconstitutional. Hiers v. Mitchell, supra; Jerome H. Sheip & Co. v. Amos, supra, both federal cases supporting this rule. Others are cited in this opinion. The second net result extracted from these opinions......
  • Fernwood Lumber Co. v. Mississippi State Tax Commission
    • United States
    • United States State Supreme Court of Mississippi
    • September 25, 1933
    ...... v. Kreutzer, 112 Miss. 165, 72 So. 891; Thompson v. McLeod, 112 Miss. 383, 73 So. 193; Sheip Co. v. Amos, 130 So. 699, 705; Jackson v. McPherson,. 162 Miss. 164, 138 So. 604, 606; ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT