TABER, TREASURER OF PAYNE COUNTY,
v.
INDIAN TERRITORY ILLUMINATING OIL CO.

U.S. | 1937-02-01
No. 280
300 U.S. 1 Supreme Court of the United States (1937) Positive Treatment
Also reported at: 81 L. Ed. 463 · 57 S. Ct. 334 · 1937 U.S. LEXIS 1145 · SCDB 1936-066
Cited by 12 cases

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Synopsis

The Supreme Court held that Oklahoma could constitutionally impose a nondiscriminatory ad valorem tax on property used by an oil company operating under a lease of restricted Pawnee Indian lands, rejecting the company's claim that it was immune from taxation as a federal instrumentality. The Court established that while the federal government's operations may be immune from direct taxation that burdens the exercise of governmental powers, a nondiscriminatory property tax on an agent or contractor's equipment does not impermissibly interfere with federal functions and thus is valid.

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Opinion of the Court
Mr. Chief Justice Hughes

Mr. Chief Justice Hughes delivered the opinion of the Court.

The respondent, Indian Territory Illuminating Oil Company, holds an oil and gas lease covering lands of restricted Pawnee Indians. The question relates to the constitutional authority of the State of Oklahoma to tax certain property used by the respondent in its operations as lessee. The Supreme Court of Oklahoma held that the property was not taxable because the lessee was a federal instrumentality and Congress had not consented to its taxation. 177 Okla. 67; 57 P. (2d) 1167. We granted certiorari. October 12, 1936.

The property is described as “one dwelling, portable, one garage, one tool house, engines, pump, water well equipment, tanks, derricks, casing, tubing, rods, pipelines, and one trailer truck, of the aggregate value of $15,869.23.” The tax is an ad valorem tax for the year 1933-34. There is no allegation or finding that the tax was discriminatory, the sole contention being that the property was not subject to ad valorem taxation because of its use as an adjunct to the production of oil and gas from the leasehold.

Our decisions distinguish between a non-discriminatory tax upon the property of an agent of government and one which imposes a direct burden upon the exertion of governmental powers. In the former case where there is only a remote, if any, influence upon the exercise of governmental functions, we have held that a non-dis criminatory ad valorem tax is valid, although the property is used in the operations of the governmental agency. This distinction, recognized by Chief Justice Marshall in McCulloch v. Maryland, 4 Wheat. 316, 436, was stated and applied after full consideration in Thomson v. Pacific Railroad, 9 Wall. 579, 591, and Railroad Company v. Peniston, 18 Wall. 5, 31-36. Recent illustrations are found in Alward v. Johnson, 282 U. S. 509, 514, where the tax which was sustained was laid upon property used in operating an automotive stage line between points in California under a mail carrier’s contract; and in Tirrell v. Johnston, 293 U. S. 533, where a tax known as the “gasoline road toll” was held to be payable by a rural mail carrier who delivered the mail by means of his own motor vehicle. See, also, Thomas v. Gay, 169 U. S. 264, 273; Baltimore Shipbuilding Co. v. Baltimore, 195 U. S. 375, 382; Choctaw, O. & G. R. Co. v. Mackey, 256 U. S. 531, 536, 537; Willcuts v. Bunn, 282 U. S. 216, 226; Susquehanna Power Co. v. Tax Commission (No. 1), 283 U. S. 291, 294; Eastern Air Transport v. Tax Commission, 285 U. S. 147, 153.

In Indian Territory Illuminating Oil Co. v. Board of Equalization, 288 U. S. 325, an ad valorem tax upon crude oil, held by the company in its storage tanks, was sustained against the claim that the oil was exempt because in its production the taxpayer was operating as an instrumentality of the United States. There the taxpayer relied, as does the state court here, upon the ruling in Jaybird Mining Co. v. Weir, 271 U. S. 609, where an ad valorem tax upon ores mined under a lease of restricted Indian land and in the bins on that land was held to be invalid. But we pointed out that in the Jaybird case the tax “was assessed on the ores in mass; and the royalties and equitable interests of the Indians had not been paid or segregated.” Indian Territory Illuminating Oil Co. v. Board of Equalization, supra, p. 327. In those circumstances the tax was regarded as an attempt to tax an agency of the federal government. Emphasizing that distinction, we said in reference to the Indian Territory Illuminating Oil Company: “Such immunity as petitioner enjoyed as a governmental instrumentality inhered in its operations as such, and being for the protection of the Government in its function extended no farther than was necessary for that purpose.” Id., p. 328.

In that view, the immunity cannot be said to extend to a nondiscriminatory ad valorem tax upon the property of the petitioner which is involved in the instant case. The judgment is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.

Reversed.

Cases With Similar Vibessemantic neighbors from the corpus

Citator

Cited By

  • James v. Dravo Contracting Co., 302 U.S. 134 (U.S. 1937)
    …ss Co. v. McLean, 291 U. S. 17. Choctaw & Gulf R. Co. v. Harrison, 235 U. S. 292; Gillespie v. Oklahoma, 257 U. S. 501; Jaybird Mining Co. v. Weir, 271 U. S. 609. Indian Territory Oil Co. v. Board, 288 U. S. 325; Taber v. Indian Territory Oil Co., 300 U. S. 1. The Solicitor General's argument, noticed later, would, however, validate a tax of any description imposed upon federal instrumentalities, provided the exaction were non-discriminatory. Osborn v. Bank, 9 Wheat. 738, 867. Federal Land Bank v. Cro…
  • Okla. Tax Comm'n v. Tex. Co., 336 U.S. 342 (U.S. 1949)
    …taxation. Indian Territory Illuminating Oil Co. v. Board of Equalization, 288 U. S. 325.23 And equipment used by a lessee of restricted Indian lands has been held subject to the same sort of exaction. Taber v. Indian Territory Illuminating Oil Co., 300 U. S. 1. Cf. Thomas v. Gay, 169 U. S. 264, sustaining a state tax on cattle grazing on tribal lands leased from Indians by the non-Indian owner of the cattle. Anomalous in the light of these rulings was the evolution of a line of decisions of this Court co…
  • Helvering v. Claiborne-Annapolis Ferry Co. of Annapolis, 93 F.2d 875 (4th Cir. 1938)
    …ee, also, Indian Territory Illuminating Oil Co. v. Board of Equalization, 288 U.S. 325, 53 S.Ct. 388, 77 L.Ed. 812; Willcuts v. Bunn, 282 U.S. 216, 226, 51 S.Ct. 125, 127, 75 L.Ed. 304, 71 A.L.R. 1260; Taber v. Indian Territory Illuminating Oil Co., 300 U.S. 1, 57 S.Ct. 334, 335, 81 L.Ed. 463. In the case last cited the Supreme Court, speaking through Chief Justice Hughes, said: “Our decisions distinguish between a nondiscriminatory tax upon the property of an agent of government and one which imposes a…
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