MCGOLDRICK V. GULF OIL CORP., 309 U. S. 414 (1940)

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U.S. Supreme Court

McGoldrick v. Gulf Oil Corp., 309 U.S. 414 (1940)

McGoldrick v. Gulf Oil Corp.

No. 473

Reargued February 27, 1940

Decided March 25, 1940

309 U.S. 414


1. The tax imposed by § 601 of the Revenue Act of 1932 on importation of crude petroleum is, by force of the provisions of that section, to be treated as a duty imposed by the Tariff Act of 1930, which, in turn, incorporated by reference customs regulations relating to the entry of merchandise in bonded manufacturing warehouses for exportation or disposition as ships' stores; section 630 of the Revenue Act (amendment of 1933) exempts from tax any article sold for use as fuel, ships' stores, etc., on vessels actually engaged in foreign trade, and, read in conjunction with the Tariff Act, provides that articles manufactured from imported articles and laden for use on vessels engaged in foreign commerce under customs regulations are to be duty free and considered or held to be exported for the purpose of drawback provisions of § 601 of the Revenue Act and § 309(b) of the Tariff Act. P. 309 U. S. 423.

2. Under these provisions, oil imported in bond in the crude form into a State, converted into fuel oil in a bonded warehouse, and withdrawn duty free for sale for fuel to a vessel engaged in foreign trade is, from the time of importation until the moment of lading on the vessel, segregated from the common mass of

Page 309 U. S. 415

property within the State and subject to the supervision and control of federal customs officials. P. 309 U. S. 425.

3. A customs regulation providing that "imported goods in a bonded warehouse are exempt from taxation under the general laws of the several States" was incorporated in the Tariff Act of 1930 by reference, and, when applied to the facts of the present case, states only what is implicit in the Congressional regulation of commerce presently involved. Pp. 309 U. S. 426, 309 U. S. 429.

4. The provisions of the Revenue Act of 1932, read with those of the Tariff Act of 1930 and with other statutes and regulations, afford a comprehensive scheme for the regulation of the importation of crude petroleum and of its control while in the course of manufacture in bond into fuel oil, and its delivery as ships' stores to vessels in foreign commerce, all calculated to insure the devotion of the manufactured oil exclusively to that purpose. P. 309 U. S. 426.

5. The statutes and regulations, taken together, operate as regulations of foreign commerce. P. 309 U. S. 427.

6. The purpose of the exemption from the tax laid upon importation of crude petroleum when it or its product is used as ships' stores by vessels engaged in foreign commerce is, first, to encourage importation of crude oil for such use, and thus to enable American refiners to meet foreign competition and to recover trade which had been lost by the imposition of the tax, and, secondly, to promote foreign commerce through the sale of tax free fuel to vessels engaged in it. P. 309 U. S. 427.

7. The adoption of these means of regulating and promoting foreign commerce was within the Congressional power. P. 309 U. S. 427.

8. The laying of a duty on imports, although an exercise of the taxing power, is also an exercise of the power to regulate foreign commerce. The exemption of imports from the duty or the allowance of a drawback when they are devoted to particular purposes or uses, or when they are exported or otherwise sent out of the country, is likewise a regulation of foreign commerce. P. 309 U. S. 428.

9. New York City sales tax imposed on sales to vessels engaged in foreign commerce of fuel oil manufactured from imported crude petroleum in bond, held invalid as an infringement of the Congressional regulation of the commerce. Pp. 309 U. S. 423-428.

281 N.Y. 647; 22 N.E.2d 480, affirmed.

Certiorari, 308 U.S. 545, to review the affirmance of a judgment reversing a ruling of the Comptroller of the City of New York which applied the city sales tax to fuel oil sold in bond to vessels engaged in foreign commerce. The writ of certiorari was dismissed, ante, p. 2, because it did not appear that the judgment below did not rest upon an adequate nonfederal ground. A petition for rehearing based on an amended remittitur of the New York Court of Appeals, 282 N.Y. 612, 25 N.E.2d 392, was granted, the judgment of dismissal vacated, p. 692. See 256 App.Div. 207, 9 N.Y.S.2d 544.

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