Southern Pacific Co. v. Gallagher, 306 U.S. 167 (1939)

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Southern Pacific Co. v. Gallagher

No. 212

Argued December 12, 1938
Decided January 30, 1939
306 U.S. 167

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF CALIFORNIA

Syllabus

1. California tax on storage and use -- i.e., upon retention and exercise of ownership -- may be applied consistently with the commerce clause and the due process clause of the Fourteenth Amendment to an interstate railroad company in respect of supplies purchased outside of the State and brought in for prompt application in the operation of its road, such as office supplies, and rails, equipment, machinery, tools, etc., used in replacements, repairs, and extensions, and including articles ordered out of the State on specifications suitable only for use in the transportation facilities and installed immediately upon arrival at the California destination. P. 172.

2. There is an interval after the articles have reached the end of their interstate movement and before their consumption in interstate operation has begun when the "use and storage" are subject to local taxation. Helson & Randolph v. Kentucky, 279 U.S. 245, distinguished. P. 176.

23 F.Supp. 193 affirmed.

Appeal from a decree of a three-judge district court refusing a permanent injunction and dismissing the bill in a suit to restrain enforcement of the California Use Tax. The court below had at first granted an interlocutory injunction, 20 F.Supp. 940.