Aero Mayflower Transit Co v. Board of Railroad Com Rs of State of Montana

• Decision Date: 08 December 1947
• Docket Number: No. 39,39
• Citation: 332 U.S. 495,68 S.Ct. 167,92 L.Ed. 99
• Parties: AERO MAYFLOWER TRANSIT CO. v. BOARD OF RAILROAD COM'RS OF STATE OF MONTANA et al
• Court: U.S. Supreme Court

332 U.S. 495

68 S.Ct. 167

92 L.Ed. 99

AERO MAYFLOWER TRANSIT CO.

v BOARD OF RAILROAD COM'RS OF STATE OF MONTANA et al.

No. 39.

Argued Oct. 15, 1947.

Decided Dec. 8, 1947.

Appeal from the Supreme Court of the State of Montana.

Mr. Edmond G. Toomey, of Helena, Mont., for appellant.

Mr. Clarence Hanley, of Helena, Mont., for appellees.

Mr. Justice RUTLEDGE delivered the opinion of the Court.

Again we are asked to decide whether state taxes as applied to an interstate motor carrier run afoul of the commerce clause, Art. I, § 8, of the Federal Constitution.

Two distinct Montana levies are questioned. Both are imposed by that state's Motor Carriers Act, Rev.Codes Mont.(1935) §§ 3847.1—3847.28. One is a flat tax of $10 for each vehicle operated by a motor carrier over the state's highways, payable on issuance of a certificate or permit, which must be secured before operations begin, and annually thereafter. § 3847.16(a).¹ The other is a quarterly fee of one-half of one per cent of the motor car- rier's 'gross operating revenue,' but with a minimum annual fee of $15 per vehicle for class C carriers, in which group appellant falls. § 3847.27.² Each tax is declared expressly to be laid 'in consideration of the use of the highways of this state' and to be 'in addition to all other licenses, fees and taxes imposed upon motor vehicles in this state.'

Prior to July 1, 1941, the fees collected pursuant to §§ 3847.16(a) and 3847.27 were paid into the state treasury and credited to 'the motor carrier fund.'³ After that date, by virtue of Mont.Laws, 1941, c. 14, § 2, they were allocated to the state's general fund.

Appellant is a Kentucky corporation, with its principal offices in Indianapolis, Indiana. Its business is exclusively interstate. It consists in transporting household goods and office furniture from points in one state to destinations in another. Appellant does no intrastate business in Montana. The volume of its interstate business there is continuous and substantial, not merely casual or occasional.⁴ It holds a certificate of convenience and necessity issued by the Interstate Commerce Commission, pursuant to which its business in Montana and elsewhere is conducted.

In 1935 appellant received a class C permit to operate over Montana highways, as required by state law.⁵ Until 1937, apparently, it complied with Montana requirements, including the payment of registration and license plate fees for its vehicles operating in Montana and of the 5¢ per gallon tax on gasoline purchased there.⁶ However, in 1937 and thereafter appellant refused to pay the flat $10 fee imposed by § 3847.16(a) and the $15 minimum 'gross revenue' tax laid by § 3847.27. In consequence, after hearing on order to show cause, the appellee board⁷ in 1939 revoked the 1935 permit and brought this suit in a state court to enjoin appellant from further operations in Montana.

Upon appellant's cross-complaint, the trial court issued an order restraining the board from enforcing the 'gross revenue' tax laid by § 3847.27. But at the same time it enjoined appellant from operating in Montana until it paid the fees imposed by § 3847.16(a). On appeal the state supreme court held both taxes applicable to interstate as well as intrastate motor carriers and construed the term 'gross operating revenue' in § 3847.27 to mean 'gross revenue derived from operations in Montana.'⁸ It then sustained both taxes as against appellant's constitutional objections, state and federal. Accordingly, it reversed the trial court's judgment insofar as the 'gross revenue' tax had been held invalid, but affirmed the decision relating to the flat $10 tax. Mont., 172 P.2d 452, 460.

We put aside at the start appellant's suggestion that the Supreme Court of Montana has misconstrued the state statutes and therefore that we should consider them, for purposes of our limited function, according to appellant's view of their literal import. The rule is too well settled to permit of question that this Court not only accepts but is bound by the construction given to state statutes by the state courts.⁹ Accordingly, we accept the state court's rulings, insofar as they are material, that the two sections apply alike to interstate and intrastate commerce and that 'gross operating revenue' as employed in § 3847.27 comprehends only such revenue derived from appellant's operations within Montana, not outside that state. ¹⁰

Moreover, since Montana has not demanded or sought to enforce payment by appellant of more than the flat $15 minimum fee for class C carriers under § 3847.27,¹¹ we limit our consideration of the so-called 'gross revenue' tax to that fee. This too is in accordance with the state supreme court's declaration: 'Even if it be admitted that the manner of arriving at a sound basis upon which the tax on gross revenue (should be calculated) is not provided by the statute, a c ntention to which we do not agree, no difficulty would arise in putting into effect the minimum fee of $15.00 required for each company vehicle operated within the state.'¹² Although the state court did not concede that the statute comprehended no workable or sound basis for calculating the tax above the minimum, we take this statement as a clear declaration that it would sustain the minimum charge even if for some reason the amount of the tax above the minimum would have to fall.

With the issues thus narrowed, we have, in effect, two flat taxes, one for $10, the other for $15, payable annually upon each vehicle operated on Montana highways in the course of appellant's business, with each tax expressly declared to be in addition to all others and to be imposed 'in consideration of the use of the highways of this state.'

Neither exaction discriminates against interstate commerce. Each applies alike to local and interstate operations. Neither undertakes to tax traffic or movements taking place outside Montana or the gross returns from such movements or to use such returns as a measure of the amount of the tax. Both levies apply exclusively to operations wholly within the state or the proceeds of such operations, although those operations are interstate in character.

Moreover, it is not material to the validity of either tax that the state also imposes and collects the vehicle registration and license fee and the gallonage tax on gasoline purchased in Montana. The validity of those taxes neither is questioned nor well could be. Hendrick v. Maryland, 235 U.S. 610, 35 S.Ct. 140, 59 L.Ed. 385; Aero Transit Co. v. Georgia Commission, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439; Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643, 67 L.Ed. 1095; Edelman v. Boeing Air Transport, 289 U.S. 249, 53 S.Ct. 591, 77 L.Ed. 1155. Nor does their exaction have any significant relationship to the imposition of the taxes now in question. Dixie Ohio Co. v. Commission, 306 U.S. 72, 78, 59 S.Ct. 435, 438, 83 L.Ed. 495; Interstate Busses Corporation v. Blodgett, 276 U.S. 245, 251, 48 S.Ct. 230, 231, 72 L.Ed. 551. They are imposed for distinct purposes and the proceeds, as appellant concedes, are devoted to different uses, namely, the policing of motor traffic and the maintenance of the state's highways.¹³

Concededly the proceeds of the two taxes presently involved are not allocated to those objects.¹⁴ Rather they now go into the state's general fund subject to appropriation for general state purposes.¹⁵ Indeed this fact, in appellant's view, is the vice of the statute. But in that view appellant of the exactions. It is far too late to question that a state, consistently with the commerce clause, may lay upon motor vehicles engaged exclusively in interstate commerce, or upon those who own and so operate them, a fair and reasonable, nondiscriminatory tax as compensation for the use of its highways. Hendrick v. Maryland, supra; Clark v. Poor, 274 U.S. 554, 47 S.Ct. 702, 71 L.Ed. 1199; Aero Transit Co. v. Georgia Commission, supra; Morf v. Bingaman, 298 U.S. 407, 56 S.Ct. 756, 80 L.Ed. 1245; Dixie Ohio Co. v. Commission, supra; Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001; cf. South Carolina Highway Department v. Barnwell Bros., 303 U.S. 177, 58 S.Ct. 510, 82 L.Ed. 734. Moreover 'common carriers for hire, who make the highways their place of business, may properly be charged an extra tax for such use.' Clark v. Poor, supra, 274 U.S. at page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199.

The present taxes on their face are exacted 'in consideration of the use of the highways of this state,' that is, they are laid for the privilege of using those highways. And the aggregate amount of the two taxes taken together is less than the amount of similar taxes this Court has heretofore sustained. Cf. Dixie Ohio Co. v. Commission, supra; Aero Transit Co. v. Georgia Commission, supra. The state builds the highways and owns them.¹⁶ Motor carriers for hire, and particularly truckers of heavy goods, like appellant, make especially arduous use of roadways, entailing wear and tear much beyond that resulting from general indiscriminate public use. Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Although the state may not discriminate against or exclude such interstate traffic generally in the use of its highways, this does not mean that the state is required to furnish those facilities to it free of charge or indeed on equal terms with other traffic not inflicting similar destructive effects. Cf. Clark v. Poor, supra; Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Interstate traffic equally with intrastate may be required to pay a fair share of the cost and maintenance reasonably related to the use made of the highways.

This does not mean, as appellant seems to assume, that the proceeds of all taxes levied for the privilege of using the highways must be allocated directly and exclusively to maintaining them. Clark v. Poor, supra, 274 U.S. at page 557, ...