Wisconsin Elec. Power Co. v. United States, 336 U.S. 176 (1949)

Wisconsin Electric Power Co. v. United States

No. 237

Argued January 7, 1949
Decided February 14, 1949
336 U.S. 176

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. Dairies, engaged primarily in the collection, pasteurization, and distribution of fresh milk, purchased and used electricity in various ways in their general operations, including an undetermined amount used in pasteurizing milk.

Held: electricity supplied to these dairies through single meters, or through more than one meter but without differentiation as to use, is sold for "commercial consumption" (and not for industrial purposes), within the meaning of § 3411 of the Internal Revenue Code, and is taxable against the vendor under that section. Pp. 177-187.

2. The legislative history of this section indicates that the term "commercial" was meant to apply to the nature of the business in which the energy is consumed, and not to the specific purpose to which each measurable unit of electricity is devoted. Pp. 181-182.

3. The controlling factor in determining the applicability of the tax is the general nature of the business carried on at a given location. Pp. 182-184.

4. Though the process of pasteurizing, separately viewed, may be assumed to be industrial, the general nature of the business conducted by the dairy plants here involved was essentially commercial, notwithstanding the inclusion of pasteurization among their many activities. Pp. 184-185.

5. The conclusion here reached as to the applicability of the tax is supported by the legislative history and the administrative interpretation. Pp. 181-187.

168 F.2d 285 affirmed.

Petitioner sued in the District Court for a refund of taxes alleged to have been erroneously collected under § 3411 of the Internal Revenue Code. The District Court denied recovery. 69 F.Supp. 743. The Court of Appeals affirmed. 168 F.2d 285. This Court granted certiorari. 335 U.S. 842. Affirmed, p. 187.