ERROR TO THE SUPREME COURT OF APPEALS OF THE STATE OF WEST VIRGINIA.
Holmes, Van Devanter, McReynolds, Brandeis, Sutherland, Butler, Sanford, Stone; Taft took no part in the consideration or decision of this case.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
This writ brings up a decree by the Supreme Court of Appeals, West Virginia, which construed § 2-a, c. 1, Acts of the Legislature, Extraordinary Session 1925,*fn* and sustained
it against objections based upon § 8, Art. I, Federal Constitution and the Fourteenth Amendment. The grounds relied upon for reversal are without merit and the decree must be affirmed.
The original proceeding challenged the validity of the tax prescribed by § 2-a and sought an injunction to prevent defendant State officers from attempting to enforce it. The chief objection rested upon the direction of the statute that, "The measure of this tax is the value of the entire production in this State, regardless of the place of sale or the fact that deliveries may be made to points outside the State." The trial court held that the tax would substantially burden and interfere with interstate commerce and ordered an appropriate injunction.
In an opinion, 102 W. Va. 272, indicating very definite purpose to follow rulings here, the court below, as shown by the authoritative head note, declared: "Under Section
a, Chapter 1, supra, the State may take into consideration the gross proceeds of a commodity produced in this State and sold in another State, but only for the purpose of determining the value of such commodity within the State and before it enters interstate commerce." And among other things it there said --
"If the taxation value of the products named in the statute be limited to their value in the State, and before they enter interstate commerce, the statute does not manifest a purpose to violate Art. I of the Federal Constitution, and we so hold." "We therefore hold, under the facts in this case, that the defendants may not treat the gross proceeds of plaintiff's sales outside the State as the worth of its gas within the State, but that they may enforce the Act upon the value thereof within the State, and before it enters interstate commerce. The injunction herein will be accordingly so modified."
The final order directed: "That the decree of the Circuit Court of Kanawha County, pronounced in this cause on the 25th day of May, 1926, in so far and in so far only as it enjoins the defendants from enforcing against the plaintiff the provisions of Sec. 2-a of . . . by imposing a tax upon the natural gas produced by the plaintiff, based upon the value thereof within the State and before it enters interstate commerce, be and the same hereby is modified and corrected so as to permit defendants to impose and enforce against the plaintiff a tax, under said section, upon the natural gas so produced by it, based upon the value thereof within the State and before it enters upon interstate commerce, and that in all other respects said decree as hereby modified and corrected be and the same hereby is affirmed."
The chief business of plaintiff in error is production and purchase of natural gas in West Virginia and the continuous and uninterrupted transportation of this through pipe lines into ...