AMERICAN OIL CO. V. NEILL, 380 U. S. 451 (1965)

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U.S. Supreme Court

American Oil Co. v. Neill, 380 U.S. 451 (1965)

American Oil Co. v. Neill

No. 19

Argued January 25-26, 1965

Decided April 26, 1965

380 U.S. 451


From its Seattle Regional Office, the Government Services Administration (GSA) invited bids to supply motor fuel for use by government agencies in Idaho and other States. Utah Oil Refining Company (Utah Oil) made bids from its Salt Lake City offices, including two bids for supplying gasoline to the Atomic Energy Commission (AEC), each bid being made alternatively for delivery f.o.b. Salt Lake City or the AEC site in Idaho. GSA at Seattle, awarded Utah Oil the contract for delivery of the gasoline at Utah Oil's Salt Lake City bulk plant, where title passed. AEC arranged for transportation of the gasoline to its Idaho site by common carriers. Utah Oil was licensed as a "dealer" in Idaho, but its activities there were unrelated to the GSA contract. Appellee Idaho State Tax Collector imposed an excise tax on the transaction under a statute taxing the "dealer" who first "receives" motor fuel in the State, the statute making a licensed dealer the constructive recipient of motor fuel unloaded in Idaho which it sold out of state for in-state use to a purchaser without a license. The tax was paid under protest by Utah Oil which appellant, its successor in interest, now seeks to have refunded. The trial court granted appellant summary judgment, holding the tax invalid, since applied to a sale outside Idaho. The Idaho Supreme Court reversed.


1. The operating incidence of the tax fell on the dealer, who was not required to pass it on to or collect it from the consumer. Pp. 380 U. S. 455-457.

2. A State's imposition of an excise tax with respect to an out of state transaction upon a dealer entirely dissociated from any in-state activities violates the Due Process Clause. Pp. 380 U. S. 457-459.

(a) The vendor's knowledge that the commodity sold was for use in the State would not of itself make the tax on the out of state sale permissible. P. 380 U. S. 457.

(b) Since every phase of the transaction here occurred outside the taxing State, neither the fact that the dealer was licensed in the State nor that it performed activities in the State suffices to uphold the tax. Pp. 380 U. S. 458-459.

86 Idaho 7, 383 P. 2d 350, reversed and remanded.

Page 380 U. S. 452

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