Edelman v. Boeing Air Transport, Inc.

Background

A Washington company that runs airplanes and maintains airports in Cheyenne and Rock Springs sued Wyoming officials and the two cities to stop a state excise tax on gasoline used at those airports. The company bought gasoline both inside and outside Wyoming, mixed and stored it in tanks at the airports, and used that fuel to fill planes that carried passengers, mail, and express in interstate commerce. Lower courts disagreed about whether the state could tax gasoline purchased outside Wyoming but stored and used at the airports.

Reasoning

The Court focused only on whether taxing gasoline when it is withdrawn from in-state storage to fill planes unfairly burdens interstate commerce. The State’s law, as enforced, taxes the gasoline at the moment it is taken from the airport tanks and placed into the airplanes, not while the planes are traveling across state lines. The Court explained that storage and withdrawal are acts completed before interstate commerce begins, so the tax falls on those local acts rather than directly on the use of fuel in interstate transportation. The Court distinguished an earlier case where a tax was applied as the vessel operated in interstate commerce and was therefore invalid.

Real world impact

The decision allows Wyoming to collect the excise tax as applied to fuel withdrawn from storage at its airports. Airlines that store and draw fuel in the State must expect the tax in those circumstances. The ruling is limited to the state’s current interpretation and does not decide other possible ways the tax might be applied in the future.