288 U.S. 249 (1933)
The Nashville, Chattanooga & St. Louis Railway Company is an interstate rail carrier.1 It purchases large quantities of gasoline outside the state of Tennessee.2 The railway brings the gasoline into the state in tank cars.3 Upon arrival, the gasoline is unloaded from the tank cars and placed in the railway's own storage tanks within Tennessee.4 None of the gasoline is sold by the railway.5 Instead, it is all withdrawn from storage and used as a source of motive power for its interstate railway operations in Tennessee, Kentucky, Alabama, and Georgia.6
The Tennessee legislature enacted Chapter 58 of the Public Acts of 1923, as amended by Chapter 67 of the Public Acts of 1925.7 This statute imposes a privilege tax on the storage of gasoline at the rate of two cents per gallon.8 The tax applies to persons storing gasoline and withdrawing it from storage, whether for sale or other use.9 The proceeds are to be used for highway construction and maintenance.10 State officials charged with collecting the tax asserted that the statute applied to the railway and demanded payment of the tax in a specified amount.11
The railway filed suit in the Chancery Court of Davidson County, Tennessee, under the Uniform Declaratory Judgments Act, chapter 29 of the Tennessee Public Acts of 1923.12 The complaint joined as defendants the Attorney General and the state officials responsible for tax collection.13 The railway sought a judicial declaration that the tax as applied to the railway was invalid under the commerce clause and the Fourteenth Amendment.14 The Chancery Court sustained the defendants' demurrer to the bill and entered a final decree dismissing it on the merits.15
The Supreme Court of Tennessee affirmed the decree of the Chancery Court.16 The railway appealed to the United States Supreme Court under section 237(a) of the Judicial Code.17 Following submission of the jurisdictional statement, the Supreme Court ordered the cause set down for argument.18 The Court invited counsel to address whether a case or controversy was presented in view of the declaratory judgment proceedings in the state court.19
Whether a proceeding brought under the Tennessee Uniform Declaratory Judgments Act to challenge the constitutionality of a state excise tax presents a case or controversy within the appellate jurisdiction of the Supreme Court?20
The judicial power extends only to cases and controversies.21 The Constitution does not require traditional forms of procedure or remedies.22 A state declaratory judgment proceeding presents a justiciable case when adverse parties assert concrete legal rights threatened with imminent invasion.23 The judgment finally determines those rights without further revision by another agency.24
Yes. The railway filed its bill under the Tennessee Declaratory Judgments Act against the Attorney General and the state officials charged with collecting the gasoline tax. Those officials had asserted the tax applied and demanded payment in a specified amount. The Chancery Court sustained the demurrer and entered a final decree dismissing the bill on the merits.
The Supreme Court of Tennessee affirmed. That adjudication resolved a real dispute between adverse parties over the railway's duty to pay the tax and would have been justiciable if presented in a conventional injunction suit.25
The proceeding presents a case or controversy within the appellate jurisdiction of the Supreme Court.26
Whether a state excise tax on the storage and withdrawal of gasoline from storage violates the Commerce Clause when applied to gasoline purchased outside the state by an interstate rail carrier and stored in the state pending its use?27
A state may impose a nondiscriminatory tax on the storage and withdrawal of gasoline after interstate transportation has ended.28 This is true even when the gasoline is later used as an instrument of interstate commerce.29 The taxable events of storage and withdrawal are fully completed before interstate use begins.30 The tax does not fall directly on the commerce itself.31
No. The railway purchased gasoline outside Tennessee.32 It transported the gasoline into the state in tank cars.33 The railway unloaded it and placed it in its own storage tanks within Tennessee before withdrawing any portion for use in interstate rail operations across four states.34 Upon unloading and storage the gasoline ceased to be a subject of interstate transportation and became part of the common mass of property within the state.35
The tax is measured by the successive exercises of storage and withdrawal, both of which occur before any use in interstate commerce commences, rendering the burden on commerce too indirect to transgress constitutional limits.36
The tax does not violate the Commerce Clause.37
Whether such a tax violates the Fourteenth Amendment on the ground that it is levied as a charge for the use of highways that the taxpayer does not use?38
A state tax levied on the storage of gasoline is not invalid under the Fourteenth Amendment merely because the taxpayer does not use the highways whose construction and maintenance are funded by the tax proceeds.39 The power to tax does not depend on the taxpayer's receipt of any special benefit.40 The levy is a tax rather than a toll or user charge.41
No. The Tennessee statute imposes a privilege tax on the storage and withdrawal of gasoline whose proceeds are dedicated to highway construction.42 Yet the railway's complaint alleged only that it does not use those highways and that railroads bear a heavier tax burden than motor carriers.43 The levy remains a tax, not a charge for highway use, and the allegations examined against the state statutes fail to demonstrate any discrimination forbidden by the Fourteenth Amendment.
The tax does not violate the Fourteenth Amendment.44