497 U.S. 916 (1990), 88-421, Ashland Oil, Inc. v. Carlyl

Docket Nº:No. 88-421
Citation:497 U.S. 916, 110 S.Ct. 3202, 111 L.Ed.2d 734
Party Name:Ashland Oil, Inc. v. Carlyl
Case Date:June 28, 1990
Court:United States Supreme Court

Page 916

497 U.S. 916 (1990)

110 S.Ct. 3202, 111 L.Ed.2d 734

Ashland Oil, Inc.

v.

Carlyl

No. 88-421

United States Supreme Court

June 28, 1990

ON APPEAL FROM THE CIRCUIT COURT OF KANAWHA COUNTY,

WEST VIRGINIA

Syllabus

During the years at issue, West Virginia imposed a gross receipts tax on persons selling tangible property wholesale, but exempted local manufacturers. The State Tax Commissioner upheld the tax assessed on sales by appellant Ashland Oil, Inc., a Kentucky corporation, finding that the tax was constitutional. While Ashland's appeal was pending in the State Circuit Court, this Court, in Armco, Inc. v. Hardesty, 467 U.S. 638, invalidated the State's tax scheme as discriminatory against interstate commerce. The Circuit Court granted Ashland summary judgment on the basis of Armco, but the State Supreme Court of Appeals reversed, holding that Armco did not apply retroactively. On remand, the Circuit Court affirmed the Tax Commissioner's decision.

Held: Armco applies retroactively to the taxes assessed against Ashland under the rule advocated by either the dissent or the plurality in American Trucking Assns., Inc. v. Smith, 496 U.S. 167. Under the dissent's reasoning, Armco applies retroactively because constitutional decisions apply retroactively to all cases on direct review. Under the plurality's approach, the same result obtains because Armco neither overruled clear past precedent nor decided a wholly new issue of first impression and, thus, fails to meet the first prong of the retroactivity test of Chevron Oil Co. v. Huson, 404 U.S. 97, 106-107.

Reversed and remanded.

[110 S.Ct. 3203] PER CURIAM.

Appellant Ashland Oil, Inc., a Kentucky corporation, is an integrated oil company that maintains business locations worldwide, including in West Virginia. During the years at issue here, West Virginia imposed a gross receipts tax on persons selling tangible property at wholesale. W.Va.Code 11-13-2c (1983). Local manufacturers were exempt from the tax. 11-13-2. The West Virginia Tax Department conducted a detailed audit of Ashland's tax returns for fiscal years ending September 1975 and 1976 and assessed a

Page 917

deficiency in tax payments of $181,313.22 for wholesale sales with West Virginia destinations. Ashland filed a timely petition for reassessment, primarily contending that the tax was unconstitutional as applied, because there was an insufficient connection between its in-state activities and the transactions sought to be taxed. Juris.Statement 38a. After the State Tax Commissioner rejected Ashland's petition, Ashland appealed to the Circuit Court of Kanawha County. While the appeal was pending, this Court decided Armco, Inc. v. Hardesty, 467 U.S. 638 (1984), which invalidated the West Virginia tax scheme that had also been applied against Ashland as discriminatory against interstate commerce. The State Circuit Court granted Ashland summary judgment on the basis of our decision in Armco.

The West Virginia Supreme Court of Appeals reverse, holding that Armco did not apply retroactively, and remanded for further proceedings. Relying on its state law criteria for retroactivity, see Bradley v. Appalachian Power Co., 163 W.Va. 332, 256 S.E. 879 (1979), which it considered to "follow closely the analysis employed by the United States Supreme Court in Chevron Oil Co. v. Huson, 404 U.S. 97, 106-[1]07 . . . (1971)," Ashland Oil, Inc. v. Rose, 177 W.Va. 20, 23, n. 6, 350 S.E.2d 531, 534, n. 6 (1986), the court determined that Armco

represented a reversal of prior precedent, and that retroactive application of the Armco rule would cause severe hardship.

Id. at 25, 350 S.E.2d at 536. Accordingly, the court held that the State was not precluded from collecting the gross receipts taxes due for the fiscal years preceding the date of decision in Armco. Id. at 25-26, 350 S.E.2d at 536-537. We dismissed Ashland's appeal of this decision for want of a final judgment. Ashland Oil, Inc. v. Rose, 481 U.S. 1025 (1987). On remand, the Circuit Court rejected Ashland's remaining claim, and the State Supreme Court of Appeals denied Ashland's request for review.

Page 918

In its appeal to this Court, Ashland contends, among other claims, that the State Supreme Court of Appeals erred in determining that Armco applied prospectively [110 S.Ct. 3204] only. Because "[t]he determination whether a constitutional decision of this Court is retroactive . . . is a matter of federal law," American Trucking Assns., Inc. v. Smith, 496 U.S. 167, 177 (1990), we must examine the state court's determination that Armco is not retroactive in light of our nonretroactivity doctrine.

Applying the view of retroactivity delineated by either the dissent or the plurality in American Trucking Assns., we must reverse the state court's decision. Under the reasoning of the dissent in American Trucking Assns., Armco applies retroactively to the taxes assessed against Ashland because constitutional...

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20 practice notes
  • 811 S.W.2d 286 (Ark. 1991), 90-39, Pledger v. Bosnick
    • United States
    • Arkansas Supreme Court of Arkansas
    • June 10, 1991
    ...Trucking Associations, Inc. v. Smith, 496 U.S. 167, 110 S.Ct. 2323, 110 L.Ed.2d 148 (1990); Ashland Oil, Inc. v. Caryl, Tax Commissioner, 497 U.S. 916, 110 S.Ct. 3202, 111 L.Ed.2d 734 (1990) and National Mines Corporation v. Caryl, Tax Commissioner, 497 U.S. 922, 110 S.Ct. 3205, 111 L.Ed.2d......
  • 470 N.W.2d 80 (Mich.App. 1991), 119584, Caterpillar, Inc. v. Department of Treasury
    • United States
    • Michigan Court of Appeals of Michigan
    • June 21, 1991
    ...the threshold inquiry. If it is not satisfied, the other two prongs are irrelevant. See, e.g., Ashland Oil, Inc. v. Caryl, 497 U.S. ----, 110 S.Ct. 3202, 111 L.Ed.2d 734 (1990). We conclude that the three-pronged test is satisfied in this case. First, although the Court of [188 Mich.App. 62......
  • 626 N.E.2d 75 (Ohio 1994), 92-1682, Hyde v. Reynoldsville Casket Co.
    • United States
    • Ohio Supreme Court of Ohio
    • February 9, 1994
    ...the decision--is a matter of federal law." (Emphasis added.) Quoting this language, the court in Ashland Oil, Inc. v. Caryl (1990), 497 U.S. 916, 918, 110 S.Ct. 3202, 3204, 111 L.Ed.2d 734, 737, refused to apply the West Virginia Supreme Court's state-law criteria for retroactivity, st......
  • 823 P.2d 971 (Or. 1992), SC S37704, Ragsdale v. Department of Revenue
    • United States
    • Oregon Supreme Court of Oregon
    • January 3, 1992
    ...a decision of the Supreme Court of the United States applies retroactively presents a question of federal law. Ashland Oil, Inc. v. Caryl, 497 U.S. 916, 110 S.Ct. 3202, 3204, 111 L.Ed.2d 734 (1990) (per curiam). [2] Because we interpret ORS 305.765 as requiring a refund for the 1988 tax yea......
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19 cases
  • 811 S.W.2d 286 (Ark. 1991), 90-39, Pledger v. Bosnick
    • United States
    • Arkansas Supreme Court of Arkansas
    • June 10, 1991
    ...Trucking Associations, Inc. v. Smith, 496 U.S. 167, 110 S.Ct. 2323, 110 L.Ed.2d 148 (1990); Ashland Oil, Inc. v. Caryl, Tax Commissioner, 497 U.S. 916, 110 S.Ct. 3202, 111 L.Ed.2d 734 (1990) and National Mines Corporation v. Caryl, Tax Commissioner, 497 U.S. 922, 110 S.Ct. 3205, 111 L.Ed.2d......
  • 470 N.W.2d 80 (Mich.App. 1991), 119584, Caterpillar, Inc. v. Department of Treasury
    • United States
    • Michigan Court of Appeals of Michigan
    • June 21, 1991
    ...the threshold inquiry. If it is not satisfied, the other two prongs are irrelevant. See, e.g., Ashland Oil, Inc. v. Caryl, 497 U.S. ----, 110 S.Ct. 3202, 111 L.Ed.2d 734 (1990). We conclude that the three-pronged test is satisfied in this case. First, although the Court of [188 Mich.App. 62......
  • 626 N.E.2d 75 (Ohio 1994), 92-1682, Hyde v. Reynoldsville Casket Co.
    • United States
    • Ohio Supreme Court of Ohio
    • February 9, 1994
    ...the decision--is a matter of federal law." (Emphasis added.) Quoting this language, the court in Ashland Oil, Inc. v. Caryl (1990), 497 U.S. 916, 918, 110 S.Ct. 3202, 3204, 111 L.Ed.2d 734, 737, refused to apply the West Virginia Supreme Court's state-law criteria for retroactivity, st......
  • 823 P.2d 971 (Or. 1992), SC S37704, Ragsdale v. Department of Revenue
    • United States
    • Oregon Supreme Court of Oregon
    • January 3, 1992
    ...a decision of the Supreme Court of the United States applies retroactively presents a question of federal law. Ashland Oil, Inc. v. Caryl, 497 U.S. 916, 110 S.Ct. 3202, 3204, 111 L.Ed.2d 734 (1990) (per curiam). [2] Because we interpret ORS 305.765 as requiring a refund for the 1988 tax yea......
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1 books & journal articles
  • Inconsistency with the Internal Consistency Test
    • United States
    • Louisiana Law Review Nbr. 77-3, April 2017
    • April 1, 2017
    ...discussing the application of the Armco decision. See Armco, Inc. v. Hardesty, 467 U.S. 638 (1984). See also Ashland Oil, Inc. v. Caryl, 497 U.S. 916 (1990). In Ashland, the Court stated the general rule that “constitutional decisions apply retroactively to all cases on direct review.” Id. ......