United Air Lines, Inc. v. Mahin
Headline: Illinois allowed to tax aviation fuel stored and loaded for interstate flights; Court upheld the state use tax as applied but sent the case back for state-law clarification.
Holding: The Court held that Illinois's use tax on fuel withdrawn from storage and loaded for interstate flights does not unconstitutionally burden interstate commerce, but remanded for state-law clarification of the exemption.
- Allows states to tax fuel stored and loaded for interstate flights.
- Affirms earlier precedents that allow taxing storage or withdrawal of fuel.
- Sends case back for Illinois court to decide exemption details.
Summary
Background
United Air Lines, a major airline, sued Illinois over a state "use" tax on aviation fuel that the airline bought in another State, stored in Illinois for two to twelve days, and then loaded onto planes at Chicago's O'Hare and Midway airports for interstate flights. Illinois changed an earlier agency rule in 1963 so that the tax would apply when fuel was taken from storage and placed in airplane tanks. The Illinois Supreme Court upheld the tax as applied to fuel used on interstate flights, and the airline asked the U.S. Supreme Court to review the decision.
Reasoning
The central question was whether Illinois violated the constitutional ban on states taxing interstate commerce by taxing fuel stored and loaded in Illinois for interstate trips. The Court agreed with the Illinois high court that the taxable event is storage or withdrawal from storage, not mere consumption in flight, and it relied on earlier cases that allowed a State to tax storage before loading. Because of that reasoning the Court held the tax did not unconstitutionally burden interstate commerce. The Court nevertheless vacated and remanded so the state court can decide a separate state-law issue about a temporary-storage exemption and the older "burn off" method of measuring tax.
Real world impact
Airlines that store fuel in a State may remain subject to use taxes measured by storage or withdrawal. States can rely on the storage-based rule affirmed here, but the case was sent back for the Illinois court to clarify whether the exemption applies. The ruling is not a final answer on the state exemption and could change after the remand.
Dissents or concurrances
Justices Douglas, Stewart, and White dissented, arguing that taxing fuel loaded for interstate trips is an unconstitutional tax on interstate commerce and would reverse the Illinois judgment.
Opinions in this case:
Ask about this case
Ask questions about the entire case, including all opinions (majority, concurrences, dissents).
What was the Court's main decision and reasoning?
How did the dissenting opinions differ from the majority?
What are the practical implications of this ruling?