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Carter v. Department of Transportation11/13/1995
ontends she was personally affected by the tax because the tax affects her distributor, who then imposes the tax on her, which she in turn imposes on her customers. The District Court concluded Carter was not personally aggrieved by the gasoline tax. The court found whether Carter was personally harmed by the gasoline tax statutes depended on where the "legal incidence" of the tax fell. The concept of legal incidence differs from the question of where the economic burden falls. United States v. Delaware (3rd Cir. 1992), 958 F.2d 555, 561.
Shortly before this case was submitted on briefs, the United States Supreme Court decided a case discussing "legal incidence." The Court considered the taxing authority of the State of Oklahoma over the Chickasaw Nation, specifically whether the state could impose a motor fuel excise tax upon fuel sold by Chickasaw Nation retail stores on Tribal trust land. Oklahoma Tax Commission v. Chickasaw Nation (1995), ___ U.S. ___, 115 S.Ct. 2214, 132 L.Ed.2d 400. In that case the Court held, " he initial and frequently dispositive question in Indian tax cases . . . is who bears the legal incidence of a tax." Chickasaw, ___ U.S. at ___, 115 S.Ct at 2220.
As part of its analysis the Court looked at the language of the Oklahoma statute. The relevant statute in that case did not expressly identify who was to bear the legal incidence of the tax, whether it was the distributor, the retailer, or consumers; nor did the statute contain a "pass through" provision. A "pass through" provision would require distributors and retailers to pass on the cost of the tax to the consumer. Chickasaw, at ___, 115 S.Ct at 2221. The Oklahoma statutes were found to have ensured that the distributer was not burdened with the tax; distributors acted merely as "transmittal agents" for taxes imposed on the retailer. Chickasaw, at ___, 115 S.Ct. at 2222. The incidence of the tax rested with the retailer. Accordingly, since the retailer was Tribal, the tax infringed upon the right of Tribal self government. See, e.g. Bryan v. Itasca County (1976), 426 U.S. 373, 96 S.Ct. 2102, 48 L.Ed.2d 710.
Montana differs from Oklahoma in this respect. In Montana the relevant statute concerning the gasoline tax reads as follows:
15-70-204. (Temporary) Gasoline license tax — rate. (1) Every distributor shall pay to the department of transportation a license tax for the privilege of engaging in and carrying on business in this state in an amount equal to:
(b) for each gallon of all other gasoline distributed by the distributor within the state . . .
(i) 24 cents per gallon beginning July 1, 1993; and
(ii) 27 cents per gallon beginning July 1, 1994.
The statute clearly states the tax is to be paid by the distributor. The distributor is defined in the statutes as:
15-70-201. (6) "Distributor" means:
(a) any person who engages in the business in this state of producing, refining, manufacturing, or compounding gasoline for sale, use, or distribution;
(b) any person who imports gasoline for sale, use, or distribution;
(c) any person who engages in the wholesale distribution of gasoline in this state and chooses to become licensed to assume the Montana state gasoline tax liability;
(d) any exporter as defined in subsection (8);
(e) any dealer licensed as of January 1, 1969, except a dealer at an established airport;
(f) any person in Montana who blends alcohol with gasoline.
Therefore, anyone who distributes gas and licenses themselves as a distributor is subject to the tax. In this case the retailer is not
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