It is indeed rather surprising to discover that there is a strong possibility that all three of these taxes are unconstitutional in their present statutory forms. But this appears to be the effect of a recent decision of the state supreme court. The case referred to, State v. Inland Empire Refineries, involved the validity of a 1939 statute imposing an excise tax of one-fourth cent per gallon upon the distribution of petroleum products other than motor fuel, lubricants, and medicants. The statute was held unconstitutional in its entirety upon three independent grounds. First, the discrimination against vendors and users of fuel oil and in favor of vendors and users of other fuels such as coal or wood, etc. was held to violate the equal protection clause of the United States Constitution and the equal privileges clause of the state constitution. Second, the exemptions from the tax of fuel oil sold to vessels engaged in foreign commerce, of that sold to a gas company and used by it to manufacture gas for distribution to the public, and of that refined within the state, were held to violate the same constitutional provision; and since these exemptions were deemed inseparable, the whole statute was thereby rendered invalid. Third, the provisions requiring distributors to secure a license, pay a fee, and file a surety bond, inasmuch as they applied to distributors who imported petroleum products into the state and those who purchased from such importers, were held to impose an improper burden upon interstate commerce in contravention of the commerce clause of the Federal Constitution.
John B. Sholley,
Are the Gasoline, Cigarette, and Sales Taxes Unconstitutional?,
15 Wash. L. Rev. & St. B.J.
Available at: https://digitalcommons.law.uw.edu/wlr/vol15/iss4/2