Gregg Dyeing Co. v. Query

Background

Two parties — a private company that ran a bleachery in Aiken and the City of Greenville — sued to block South Carolina’s Gasoline Tax Act of 1930. Both bought gasoline outside the State, had it shipped in interstate commerce, unloaded it into storage tanks in South Carolina, and kept it stored more than twenty‑four hours until used in their businesses or for public purposes. The statute imposed a six‑cent license tax per gallon on gasoline imported and stored in the State for twenty‑four hours or more intended for in‑state use, but excluded gasoline already taxed under other state laws.

Reasoning

The Supreme Court focused on whether the tax placed a direct burden on interstate commerce or unlawfully discriminated against out‑of‑state gasoline. Relying on the state court’s construction that interstate commerce ended once the gasoline was at rest in local storage, the Court held a State may tax products stored and used locally. The Court accepted the view that the 1930 law complements earlier statutes so that consumers and producers within the State pay comparable taxes, and found no substantial discrimination. The equal protection challenge failed for the same practical‑operation reasons.

Real world impact

The decision means businesses and municipal users who import and store gasoline in South Carolina for over twenty‑four hours must pay the six‑cent tax just like in‑state suppliers and producers who use or sell gasoline. The ruling affirms the lower court judgments; it leaves unresolved questions about foreign imports and did not decide one procedural issue about the City’s federal question standing.