Memphis Natural Gas Co. v. McCanless

CourtSupreme Court of Tennessee
Writing for the CourtGreen
Citation177 S.W.2d 841
PartiesMEMPHIS NATURAL GAS CO. v. McCANLESS (GROSS RECEIPTS TAX CASE).
Decision Date05 February 1944
177 S.W.2d 841
MEMPHIS NATURAL GAS CO.
v.
McCANLESS (GROSS RECEIPTS TAX CASE).
Supreme Court of Tennessee.
February 5, 1944.

Appeal from Chancery Court, Davidson County; Wm. J. Wade, Chancellor.

Suit by Memphis Natural Gas Company against George F. McCanless, Commissioner, etc., to recover tax paid under protest. From a decree for complainant, the Commissioner appeals.

Affirmed.

Canada, Russell & Turner, of Memphis, for complainant.

William F. Barry, Sol. Gen., of Nashville, Roy H. Beeler, Atty. Gen., and

Page 842

Thomas H. Malone, III, Asst. Atty. Gen., for the State.

GREEN, Chief Justice.


This suit was brought by Memphis Natural Gas Company to recover taxes alleged to have been illegally exacted of it by the Commissioner of Finance and Taxation and paid under protest. There was decree in favor of complainant by the chancellor, from which the commissioner has appealed.

The tax involved is known as the gross receipts tax and is levied by Chapter 108 of the Public Acts of 1937, art. 2, § 2, Item G, and by the Amendatory Act of the same year, Chapter 192, Section 19. The relevant sections of the two statutes are as follows:

Chapter 108, art, 2, § 2, Item G:

"Each person engaged in the business of furnishing or distributing gas, water, or electric current, whether to dealer, consumer, municipality or other customer, shall, for the privilege of doing such business, pay to the State for State purposes an amount equal to three (3%) per cent of the gross receipts derived from intrastate business in the State.

* * * * *

"It is the intention of this Item to levy a tax for the privilege of engaging in intrastate commerce carried on wholly within this State and not a part of interstate commerce."

Chapter 192, § 19:

"Be it further enacted, That the said Act be amended in Item B[G] (Gas, Water, Electric Power and Light Companies) by adding thereto at the conclusion of the first paragraph thereof, to be a part of the said paragraph the following sentence: `Persons engaged in the business of manufacturing gas or of distributing manufactured gas or natural gas shall, in lieu of the foregoing, pay an amount equal to one and one-half (1½%) per cent of the gross receipts derived from intrastate business in this State, which payment shall be subject to the same provisions, restrictions and credits hereinafter provided in this Item."

It will be observed with respect to natural gas that the tax is only levied on "distributing * * * natural gas." The case before us, therefore, is in a narrow compass, a determinative question being whether the complainant is distributing natural gas or is a distributor of that commodity in Tennessee.

The complainant maintains a pipe line from Louisiana through Arkansas and Mississippi to the outskirts of the City of Memphis, in Tennessee. From Memphis it has other and smaller pipe lines passing through Shelby County which reach Brownsville, Humboldt, Jackson and other Tennessee towns. At various points along complainant's lines it is tapped by service lines which carry gas to the homes and business places of customers in Memphis, Shelby County, and elsewhere. None of these service pipes, however, belong to the complainant, nor has the...

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5 cases
  • Memphis Natural Gas Co. v. McCanless
    • United States
    • Supreme Court of Tennessee
    • 4 Mayo 1946
    ...211; Memphis Natural Gas Co. v. Beeler, 315 U.S. 649, 62 S.Ct. 857, 86 L.Ed. 1090; Memphis Nat. Gas Co. v. McCanless, 180 Tenn. 688, 177 S.W.2d 841; Memphis Nat. Gas Co. v. McCanless, 180 Tenn. 695, 177 S.W.2d 843. After the chancellor had delivered a careful and comprehensive opinion which......
  • Memphis Natural Gas Co. v. McCanless
    • United States
    • Supreme Court of Tennessee
    • 5 Febrero 1944
    ...The nature of complainant's organization and of its business is described generally in Memphis Natural Gas Co. v. McCanless, Tenn.Sup., 177 S.W.2d 841, (the Gross Receipts Tax Case) just decided. For a fuller description see the opinions of this Court and the Supreme Court of the United Sta......
  • Texas Gas Transmission Corp. v. Atkins
    • United States
    • Tennessee Supreme Court
    • 23 Julio 1954
    ...We are of opinion that all of these transactions are controlled by what was held in Memphis Natural Gas Co. v. McCanless, 180 Tenn. 688, 177 S.W.2d 841, wherein it was held that the Memphis Natural Gas Company was not engaged in intrastate operation. The case was decided upon the factual si......
  • Commonwealth Natural Resources, Inc. v. Com., Nos. 771193
    • United States
    • Virginia Supreme Court of Virginia
    • 22 Noviembre 1978
    ...gas to Allied within the intendment of Code § 58-597. Page 795 CNG also relies upon Memphis Gas Company v. McCanless, 180 Tenn. 688, 177 S.W.2d 841 (1944), and Utilities Natural Gas Co. v. State, 133 Tex. 313, 128 S.W.2d 1153 (1939), as authority for the proposition that a sale to one or tw......
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