Pierce Oil Corp. v. Hopkins

Background

A gasoline seller (Pierce Oil Corporation) sued Arkansas tax officials to stop a state law that requires sellers to collect one cent per gallon from buyers for gasoline expected to be used in motor vehicles on the State’s highways. The law also requires sellers to register with county clerks, file monthly sales reports for each county, and pay the collected tax monthly, with failure to report or pay treated as a misdemeanor. The federal trial court dismissed the suit and the court of appeals affirmed, bringing the question to this Court under the Judicial Code.

Reasoning

The Court considered whether the statute violated the federal Constitution or was too uncertain to enforce. It explained that the statute directs the seller to collect the tax from the purchaser at the time of sale, and that a State may regulate and tax the business of selling gasoline and impose incidental burdens on sellers. The Court rejected the vagueness challenge because the State’s highest court had interpreted the law to require collection only on gasoline the seller reasonably believes will be used in motor vehicles on highways. The Court therefore upheld the statute.

Real world impact

As a result, gasoline dealers in Arkansas must collect and remit the one-cent tax for highway-use fuel, follow monthly reporting and payment procedures, and face criminal penalties for failure to comply. The State court’s interpretation narrows collection to sales the seller reasonably expects to be used on highways. Equal protection arguments were not considered because they were not raised below, and the state-constitutional issue is not before this Court.