Duke Power Co. v. Query

• Decision Date: 11 April 1935
• Docket Number: No. 3197,3198.,3197
• Citation: 10 F. Supp. 669
• Court: U.S. District Court — District of South Carolina
• Parties: DUKE POWER CO. v. QUERY et al. SOUTHERN PUBLIC UTILITIES CO. v. SAME.

10 F. Supp. 669

DUKE POWER CO. v. QUERY et al.

SOUTHERN PUBLIC UTILITIES CO. v. SAME.

Nos. 3197, 3198.

District Court, E. D. South Carolina.

April 11, 1935.

Haynsworth & Haynsworth, of Greenville, S. C., and W. S. O'B. Robinson, J. C. McGowan, and J. H. Marion, all of Charlotte, N. C., for plaintiffs.

Jno. M. Daniel, Atty. Gen. for S. C., and J. Fraser Lyon, Gen. Counsel, of Columbia, S. C., for defendants.

MYERS, District Judge.

These are consolidated actions at law, in which the plaintiffs seek to recover from the defendant South Carolina Tax Commission certain taxes paid under protest as assessed by said commission under the South Carolina Electric Power Tax Act of May 9, 1931, 37 St. at Large, p. 357, § 1 (section 2558, Code 1932), entitled: "An Act to Raise Revenue for the Support of the State Government by the Imposition of an Excise Tax Upon Electric Power Generated and Sold Within This State," and providing as follows:

"Section 1. Be it enacted by the General Assembly of the State of South Carolina: (a) That in addition to all other taxes of every kind now imposed by law, every person, firm or corporation engaged in the business of manufacturing or generating hydro-electric power in the State of South Carolina shall be subject to the payment of an excise, license or privilege tax of five-tenths of one mill upon each kilowatt hour of hydro-electric power manufactured or generated, and said tax shall be paid to and collected by South Carolina Tax Commission.

"(b) That in addition to all other taxes of every kind now imposed by law, every person, firm or corporation engaged in the business of manufacturing or generating electric power by the use of steam power in the State of South Carolina shall be subject to the payment of an excise, license, or privilege tax of five-tenths of one mill upon each kilowatt hour of electric power so manufactured or generated and said tax shall be paid to and collected by South Carolina Tax Commission.

"(c) That in addition to all other taxes of every kind now imposed by law, every person, firm or corporation engaged in the business of selling electric power within the State of South Carolina shall be subject to the payment of an excise, license, or privilege tax of five-tenths of one mill upon each kilowatt hour of electric power sold in the State of South Carolina and said tax shall be paid to and collected by South Carolina Tax Commission: Provided, That if such seller procures electric power which has been subject to the payment of the excise, license or privilege tax hereinbefore provided a credit on said tax to the amount of the excise tax already required to be paid by the person, firm or corporation generating the same within this State shall be allowed: Provided, further, That the provisions of this Act shall not apply to the electric power manufactured or generated in another State and brought into this State until such power has lost its interstate character and immunities: Provided, further, That the provisions of this Act shall not apply to any person, firm or corporation owning and operating an electric manufacturing or generating plant of ten horse power or less, nor shall the provisions of this Act apply to industrial plants manufacturing or generating power for its own use, or for use upon its own premises by its bona fide operatives or employees but the tax shall be paid upon so much thereof as may be sold to other than its employees: Provided, further, That the provisions of this Act shall not apply to municipalities manufacturing or generating electricity for the use of its customers."

The right to recovery set out in the complaint is the allegation that "the act complained of and the assessment and the collection of the taxes as hereinafter complained of, deprived the plaintiff of its property and denied to it the equal protection of the laws, in violation of the Fourteenth Amendment of the United States Constitution."

The defendants demurred on the ground that no cause of action has been stated, and argument has been heard on the demurrers, with full consideration of the exhaustive briefs filed.

The effort is made in argument to differentiate the instant cases from the attack upon the Electric Power Tax Act made in the consolidated cases of South Carolina Power Company v. South Carolina Tax Commission, Broad River Power Company v. Query and Lexington Water Power Company v. Query on application for interlocutory injunction in each case (referred to as "The Power Tax Case"), decided by a statutory three-judge court, and reported in (D. C.) 52 F.(2d) 515.

This court, upon full consideration, is unable to find any point presented here which has not been fully considered in the opinion in the Power Tax Case, except the alternative suggestion that plaintiffs are entitled in the computation of the sales tax provided by subsection (c) of section 1 to a credit of the full generation tax paid by the plaintiffs under subsections (a) and (b), of section 1 rather than to the credit of the generation tax paid upon the power so sold and otherwise subject to the sales tax under said subsection (c). This credit provision is so evidently for the purpose of preventing a double tax on power sold that the point may be dismissed, without...