Gurley v. Rhoden, 421 U.S. 200 (1975)

CERTIORARI TO THE SUPREME COURT OF MISSISSIPPI

Syllabus

Mississippi imposes a 5% sales tax upon the "gross proceeds" of retail sales of tangible personal property, including gasoline, and such gross proceeds are computed without deduction for any taxes. Mississippi also imposes a gasoline excise tax on each gallon sold by a distributor, which, in the case of a distributor bringing gasoline into the State otherwise than by common carrier, accrues at the time when and at the point where the gasoline is brought into the State. And a federal gasoline excise tax is imposed on each gallon sold by a "producer," 26 U.S.C. § 4081(a), defined to include any person to whom gasoline is sold tax-free, § 4082(a). Contending that the denial of a deduction for the Mississippi and federal excise taxes in computing the gross proceeds of retail gasoline sales for purpose of the sales tax was unconstitutional as a taking of property without due process in violation of the Fourteenth Amendment, and that he acts as a mere collector of the excise taxes whose legal incidence is upon the purchaser-consumer, petitioner, an operator of several service stations in Mississippi who purchased his gasoline tax-free in other States and transported it to Mississippi in his own trucks, paid the sales taxes under protest and sued for a refund in state court. His suit was dismissed, and the Mississippi Supreme Court affirmed, holding that the legal incidence of both excise taxes is on petitioner, and not on the purchaser-consumer.

Held: The denial of the deduction of the Mississippi and federal gasoline excise taxes in computing the gross proceeds of retail sales for purposes of the sales tax is not unconstitutional. Pp. 203-212

(a) As reflected by the language of 26 U.S.C. §§ 4081(a) and 4082(a), and their legislative history, the legal incidence of the federal excise tax is on the statutory "producer," such as petitioner, and not on his purchaser-consumer. Pp. 204-208.

(b) The Mississippi Supreme Court’s holding that the legal incidence of the state excise tax falls on petitioner, being consistent with a reasonable interpretation of the statute, is conclusive. Pp. 208-210.

(c) Petitioner’s claim that liability for the excise taxes and sales tax arises simultaneously and results in a sales tax upon the excise tax is without merit, since the excise taxes attach prior to the point of the retail sale. Pp. 210-211.

(d) Petitioner is not denied equal protection as against dealers in other States who are not required to include the federal excise tax as part of the sales tax base, since the prohibition of the Equal Protection Clause is against its denial by the State as between taxpayers subject to its laws. Pp. 211-212

288 So.2d 868, affirmed.

BRENNAN, J., delivered the opinion of the Court, in which all other Members joined except DOUGLAS, J., who took no part in the consideration or decision of the case.