Richfield Oil Corp. v. State Board of Equalization

This is an appeal from a judgment for plaintiff in an action to recover retail sales tax paid under protest.

Plaintiff, a corporation, is engaged in producmg and selling oil and oil products in California. The New Zealand Government for use by its navy invited offers to sell oil to it for delivery “f.o.b. N.Z. Government tank steamer at any port beyond New Zealand specified by the tenderer.” Plaintiff, in the course of its business, submitted an offer with the price quoted f.o.b. ship’s rail of buyer’s tanker at its storage terminal at Long Beach, California. Pursuant thereto a contract of sale was executed specifying that “(1) Price . . . f.o.b. Los Angeles, payment in London, ... (3) Delivery shall be given to the order of the Naval Secretary, Navy Office, Wellington, into N. Z. Naval tank steamer R.F.A. ‘Nucula’ at Los Angeles, California. . . .

“(7). The Richfield Oil Co. shall advance to the Master of the ‘Nucula’ at Los Angeles a sum in dollars the equivalent of up to £300 to meet disbursements at port of loading on each trip, such advance to be repaid when payment is made for the fuel oil.

“ (8). Bills of Lading and other customary shipping documents shall be handed to…

I dissent.

Under the prevailing decisions of the United States Supreme Court the tax imposed in the present case is prohibited by the “import-export” clause of the Constitution of the United States which provides that “No State shall . . . lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws. . . .” (Art. I, § 10, cl. 2.) Since the question is entirely one of federal law, we are bound by those decisions.

It is admittedly difficult to ascertain the precise point at which the products of a state which are exported to foreign countries cease to be a part of the general mass of property of that state, subject to nondiscriminatory taxation as such, and become “exports” entitled to the constitutional protection against the imposition of taxes or duties. Clearly, where a general tax is laid on all property alike, goods not then intended for export are not exempt because they happen to be exported afterwards. (Brown v. Houston, 114 U.S. 622 [ 5 S.Ct. 1091 , 29 L.Ed. 257 ].) And, goods are not exempt from such taxation merely because they are intended for exportation or manufactured under a contract for export. (Turpin…