RICHFIELD OIL CORPORATION v. STATE BOARD OF EQUALIZATION (1944)

This is an appeal from a judgment for plaintiff in an action to recover, with interest a sum paid under protest as a retail sales tax and as interest thereon.

Plaintiff is a foreign corporation authorized to do business in California and engaged in producing, refining and selling crude oil and crude oil products. On December 3, 1936, the New Zealand Government, acting through its official purchasing agency, the Stores Control Board, invited bids for the supply of fuel oil required by the New Zealand Division of the Royal Navy. The invitation provided that bids were to be for delivery ‘f.o.b. N.Z. Government tank steamer at any port beyond New Zealand specified by the tenderer.’ Plaintiff instructed its agent in New Zealand to submit a bid specifying that the price quoted was f.o.b. ship's rail of buyer's tanker at the Richfield Marine Terminal at Long Beach, California. Plaintiff's bid was accepted and a written contract for the sale of oil was entered into in New Zealand on Februray 4, 1937. The contract contained, among others, the following provisions: ‘(1). Price * * * Fob 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 Richfeld 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 * * *, 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 the Master of the ‘Nucula’ and the oil consigned to the Naval-Officer-In-Charge, Auckland, New Zealand.

On May 14, 1937, pursuant to the contract, plaintiff delivered the oil into the ‘Nucula’ at Long Beach, California. The oil was processed at plaintiff's refinery at Watson and piped to its storage tanks at Long Beach, from which it was loaded aboard the vessel. Following such delivery, plaintiff handed to the master of the vessel customary shipping documents, including a bill of lading designating plaintiff as shipper and providing for delivery unto the Naval Officer in Charge at the Port of Auckland, New Zealand. Plaintiff also filed with the United States Collector of Customs a Shipper's Export Declaration, which reported the shipment by plaintiff from Long Beach, California, to Auckland, New Zealand. Thereafter, the entire supply of oil was delivered to the New Zealand Division of the Royal Navy at Auckland, and payment therefor was made to plaintiff in London, England.

On September 25, 1940, defendant assessed a retail sales tax against plaintiff measured by gross receipts from the foregoing transaction. Plaintiff paid the tax with interest, a total of $1,514.78, under protest on July 7, 1942. In September, it filed a claim for refund which was denied. The present action was then commenced.

The cause was submitted to the trial court on the pleadings and on stipulation of fact entered into by the parties. The trial court found, in addition to the facts heretofore recited that oil had never been produced in New Zealand in sufficient quantities to supply the needs of the New Zealand Division of the Royal Navy, that plaintiff had previously made a shipment of oil to New Zealand under identical circumstances, and that it had always been the intent of the parties to the contract that the oil would be exported to New Zealand without interruption. The court concluded that plaintiff was entitled to a refund of the amount paid, together with interest thereon, and entered judgment accordingly. This appeal followed.

The California Sales Tax Law imposes a tax upon retailers, measured by gross receipts, ‘for the privilege of selling tangible personal property at retail,’ and authorizes retailers to collect the tax from the consumers. Revenue and Taxation Code, ss 6051, 6052, St.1941, p. 536. A sale is defined therein as ‘any transfer of title of possession * * * in any manner or by any means whatsoever, of tangible personal property * * *.’ s 6006. By express provision of the law, gross receipts from sales of property which the state is prohibited from taxing under the Constitution of the United States are exempt from computation of the amount of tax imposed. ss 6351, 6352.

The sale or taxable event in the present case occurred when the fuel oil was loaded aboard the tanker ‘Nucula’ at Long Beach, California, it being conceded that title to the oil passed to the New Zealand Government at that time. In support of the judgment, however, plaintiff contends that gross receipts from the sale were not subject to taxation under the law by reason of the prohibition of the federal Constitution that ‘No State shall * * * lay any Imposts or Duties on Imports or Exports, except what may be absoultely necessary for executing it's (its) Inspection Laws.’ Art. I, s 10, cl. 2. Defendant contends, on the other hand, that the sale of oil preceded its exportation and consequently was a local transaction subject to state taxation. It further contends that even if the oil attained the status of an export prior to the sale, the ‘export-import’ clause of the Constitution does not prohibit the imposition of a sales tax based on that transaction.

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, goods not intended for export when a general tax is laid on all property alike, are not exempt therefrom 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 v. Burgess, 117 U.S. 504, 6 S.Ct. 835, 29 L.Ed. 988; Cornell v. Coyne, 192 U.S. 418, 24 S.Ct. 383, 48 L.Ed. 504. On the other hand, goods in the actual course of transportation to a foreign destination and goods delivered to a common carrier for that purpose are in the process of exportation and constitutionally cannot be taxed. A. G. Spalding & Bros. v. Edwards, 262 U.S. 66, 43 S.Ct. 485, 67 L.Ed. 865; see William E. Peck & Co. v. Lowe, 247 U.S. 165, 175, 38 S.Ct. 432, 62 L.Ed. 1049; Turpin v. Burgess, supra, 117 U.S. at page 506, 6 S.Ct. 835, 29 L.Ed. 988; Coe v. Errol, 116 U.S. 517, 527, 6 S.Ct. 475, 478, 29 L.Ed. 715. It was said in Coe v. Errol, supra, that goods exported to a foreign country do not cease to be part of the common property of the state of their origin for tax purposes until they ‘have been shipped or entered with a common carrier for transportation * * * or have been started upon such transportation in a continuous route or journey.’ Cf. Railroad Commission v. Texas & P. R. Co., 229 U.S. 336, 33 S.Ct. 837, 57 L.Ed. 1215; Texas & N. O. R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 S.Ct. 229, 57 L.Ed. 442; Southern P. Terminal Co. v. Interstate Commerce Comm., 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310.

Applying these general principles or formulas to the facts of the present case, we are of the opinion that the sale of oil was a step in its exportation and that the tax in question was improperly levied. The case of A. G. Spalding & Bros. v. Edwards, supra, is substantially on all fours with the present case and the decision of the United States Supreme Court therein is, of course, controlling. In that case, Delgado & Compania, a Venezuelan firm, requested New York commission merchants to buy certain sporting goods for their account. The commission merchants ordered the goods grom the plaintiff, instructing it to deliver the same to a specified exporting carrier in New York addressed to Delgado & Compania. The plaintiff delivered the goods as directed and received a receipt from the carrier which it sent to the commission merchants, who exchanged it for a bill of lading in their own name. The commission merchants paid plaintiff and in due time the goods were transported and delivered to Delgado & Compania in Venezuela. In holding that a tax based on that sale could not constitutionally be imposed upon plaintiff, the court stated, 262 U.S. at page 69, 43 S.Ct. at page 486, 67 L.Ed. 865, in language equally applicable to the case at bar, ‘The very act that passed the title, and that would have incurred the tax had the transaction been domestic, committed the goods to the carrier that was to take them across the sea, for the purpose of export and with the direction to the foreign port upon the goods. The expected and accomplished effect of the act was to start them for that port.’

It is true that the Spalding case involved article 1, section 9, clause 5 of the Constitution, which prohibits Congress from lying taxes on articles exported from any state, rather than section 10, clause 2, but it has been repeatedly said that the prohibitions of those sections are identical. Turpin v. Burgess, 117 U.S. 504, 506, 6 S.Ct. 835, 29 L.Ed. 988; Brown v. Maryland, 12 Wheat. 419, 6 L.Ed. 678, 687. Defendant seeks to distinguish the case, however, on the ground that while delivery therein was to a common carrier, delivery in the present case was to the purchaser's carrier. The distinction is one of form rather than substance. Delivery of goods to a common carrier for transportation is regarded as the beginning of the export journey because the destination of the goods is thereby fixed and certain. Cf. Turpin v. Burgess, supra, 117 U.S. at page 507, 6 S.Ct. 835, 29 L.Ed. 988; Superior Oil Co. v. Mississippi, 280 U.S. 390, 396, 50 S.Ct. 169, 74 L.Ed. 504; Coe v. Errol, 116 U.S. 517, 527, 6 S.Ct. 475, 29 L.Ed. 715. But delivery of the oil to the ‘Nucula’ in this case as effectively fixed its destination as did the delivery of the goods to the common carrier in the Spalding case. Here, as there, title passed upon delivery, and the passage of title enables the purchaser to change the destination of goods and therby evade the tax. But, as stated in A. G. Spalding & Bros. v. Edwards, supra, 262 U.S. at page 70, 43 S.Ct. at page 486, 67 L.Ed. 865, ‘There was not the slightest probability of any such change and it did not occur,’ and ‘theoretical possibilities may be left out of account.’

The law is not concerned with the means of shipment except to inquire whether the means chosen reasonably guarantees continuity of the export journey and foreign delivery in good faith. The means selected in this case, in the light of all the circumstances, satisfies that inquiry. The transaction in issue featured a contract negotiated and entered into in New Zealand for the sale of oil to supply foreign needs. Under that contract plaintiff was obligated to deliver the oil to the order of ‘Naval Secretary, Navy Office, Wellington’ into the tanker ‘Nucula’ at Long Beach, furnish the mastor of the tanker with customary shipping documents, including a bill of lading consigning the oil to the ‘Naval-Officer-In-Charge, Auckland, New Zealand,’ and advance a sum equal to 300 to the master to meet disbursements at the port of loading. Plaintiff performed the obligations of its contract. It also executed an export declaration, and, as provided in the contract, received payment for the oil in London, England. From the incpetion of negotiations the parties contemplated an exportation of oil, and the oil was in fact exported to New Zealand. The only local phase of the sale was the delivery to the carrier in this state, and that delivery was the first step in the exportation. As stated in A. G. Spalding & Bros. v. Edwards, supra, 262 U.S. at page 70, 43 S.Ct. at page 486, 67 L.Ed. 865, ‘To put it at any later point would fail to give to exports the liberal protection that hitherto they have received.’

The present case is even stronger than the Spalding case, for whereas here, the alleged local transaction was a direct sale to the foreign consumer and the oil was actually loaded aboard the carrier, the sale in the Spalding case was to an intermediary and the goods were merely delivered to the carrier.

Defendant argues that unless the Spalding case is distinguished or overruled an anomalous situation will exist in that the sale in the present case would have been taxable had the oil been intended for and transported in interstate commerce. It cites Department of Treasury v. Wood Preserving Corp., 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188; Superior Oil Co. v. Mississippi, 280 U.S. 390, 50 S.Ct. 169, 74 L.Ed. 504; and Standard Oil Co. v. Johnson, 56 Cal.App.2d 411, 132 P.2d 910, in support of the constitutionality of such a tax under the commerce clause. While a few cases have suggested that the prohibitions of the commerce and export-import clauses of the Constitution are substantially identical insofar as taxation is concerned (Crew-Levick Co. v. Pennsylvania, 245 U.S. 292, 295, 38 S.Ct. 126, 62 L.Ed. 295; Brown b. Maryland, 12 Wheat. 419, 6 L.Ed. 678), other cases have rejected even an analogy between the two. Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643, 67 L.Ed. 1095 (retusing to apply original package doctrine to sales of articles transported in interstate commerce); Woodruff v. Parham, 8 Wall. 123, 19 L.Ed. 382; cf. Fairbank v. United States, 181 U.S. 283, 306, 21 S.Ct. 648, 45 L.Ed. 862. And, in two of the three cases involving the commerce clause cited by defendant, the Spalding case was expressly distinguished on the ground that it involved the export-import clause of the Constitution. Superior Oil Co. v. Mississippi, supra; Standard Oil Co. v. Johnson, supra. The distinction thus drawn between cases involving exports and cases dealing with interstate commerce is not without basis. Section 10, clause 2 in terms prohibits state taxation of exports, while section 8, clause 3 merely commits the regulation of commerce to the federal government. Modern authorities recognize that those engaged in interstate commerce must pay their just share of state tax burdens, and that a state tax infringes the authority of Congress over interstate commerce only when it discriminates against or directly burdens such commerce. McGoldrick v. Berwind-White Coal Min. Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876. Defendant itself asserts that under the commerce clause ‘The question of where interstate or foreign commerce begins is wholly seaprate and apart from the question of what events occurring within a state are taxable.’

Defendant advances two arguments in support of the contention that the tax imposed in the present case, although based upon gross receipts from the sale of oil in the process of exportation, does not violate article I, section 10, clause 2 of the Constitution: First, the tax is one imposed on retailers for the privilege of selling and is not an ‘impost’ or ‘duty’ on exports within the meaning of the constitutional prohibition. Second, the constitutional prohibition against state taxation or exports does not apply to exports originating in the taxing state. In our opinion, neither argument is sound.

In the early case of Brown v. Maryland, 12 Wheat. 419, 444, 6 L.Ed. 678, 687, where the state argued that a license tax on importers did not contravene article I, section 10, clause 2 since it was a tax on the person rather than the article, the Supreme Court said: ‘It is impossible to conceal from ourselves, that this is varying the form, without varying the substance. It is treating a prohibition which is general, as if it were confined to a particular mode of doing the forbidden thing. All must perceive that, a tax on the sale of an article * * * is a tax on the article itself. * * * So, a tax on the occupation of an importer is * * * a tax on importation. It must add to the price of the article, and be paid by the consumer, or by the importer himself, in like manner as a direct duty on the article itself would be made.’ By way of dictum the court announced that a license tax on exporters would likewise contravene the prohibitions of the Constitution. And in the more recent case of Crew-Levick Co. v. Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295, it was expressly held that a state license tax on wholesale venders of merchandise, measured by gross receipts, is in effect an impost on exports when applied to merchandise sold and shipped to customers in foreign countries. Cf. United States v. Hvoslef, 237 U.S. 1, 35 S.Ct. 459, 59 L.Ed. 813, Ann.Cas.1916A, 286; Fairbank v. United States, 181 U.S. 283, 21 S.Ct. 648, 45 L.Ed. 862.

The case of Crew-Levick Co. v. Pennsylvania, supra, is also authority for the proposition that the constitutional protection of exports is not limited to exports originating outside the taxing state. There, the State of Pennsylvania unsuccessfully sought to tax exports originating in that state. While it may be conceded that article I, section 10, clause 2 was conceived in the desire to prevent the seaboard states from exacting tribute from their sister states (see Cook v. Pennsylvania, 97 U.S. 566, 574, 24 L.Ed. 1015; Woodruff v. Parham, 8 Wall. 123, 134, 135, 75 U.S. 123, 134, 135, 19 L.Ed. 382), the prohibition is general in its terms. As stated in Blount v. Munroe, 60 Ga. 61, 67, ‘The constitution does not prescribe that no state shall levy such a tax on exports of articles brought from other states to her seaport towns, but simply and without exception, it lays the ban of prohibition upon all exports.’

The judgment is affirmed.

I dissent. In arriving at the conclusion that the plaintiff is exempt from the payment of sales tax upon the transaction in controversy, the majority of this court has ignored the more recent cases decided by the United States Supreme Court, and has based its decision upon what may be termed the old approach as applied to interstate and foreign commerce. Under that approach a state is entirely inhibited from coming into contact with that commerce through its taxing power. On the other hand, cases decided by the United States Supreme Court since 1937 signify a new approach, whereby complete immunity from various state taxes which resulted from the earlier doctrine has been repudiated. See Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944; J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429; Gwin, White & Prince, Inc., v. Hennefore, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272; McGoldrick v. Berwind-White Coal Min. Co., 309 U.S 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 61 S.Ct. 246, 85 L.Ed. 267, 130 A.L.R. 1229; Department of Treasury v. Wood Preserving Corp., 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188. The essence of these decisions is recognition that not all state taxation is to be condemned because, in some manner, it has an effect upon interstate commerce, and recognition that there may be local activities by a taxpayer within a state, which may be sufficient to support a tax independent of the character of the transaction as a whole, and though the tax may have some incidental effect on other than the purely local or intrastate aspects of that commerce.

In McGoldrick v. Berwind-White Coal Min. Co., supra, a New York City tax upon the sale of goods for consumption was upheld as applied to a Pennsylvania corporation engaged in the production of coal in Pennsylvania and delivered by it to customers in New York. The tax was held to be conditioned upon events occurring within the state delivery or the transfer of title or possession. It was said that not all state taxation is to be condemned because, in some manner it has an effect upon commerce, and it is only when the tax operates to regulate commerce between the states or goreign nations to an extent that infringes the authority of Congress that the tax can be said to exceed constitutional limitations.

In State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 61 S.Ct. 246, 250, 85 L.Ed. 267, 130 A.L.R. 1229, a tax on a foreign corporation's privilege of doing business was sustained Liability was not imposed until the declaration of dividends payable to out-of-state stockholders. The court stated that, ‘The simple but controlling question is whether the state has given anything for which it can ask return. The substantial privilege of carrying on business in Wisconsin, which has here been given, clearly supports the tax, and here state has not given the less merely because it has conditioned the demand of the exaction upon happenings outside its own borders. The fact that a tax is contingent upon events brought to pass without a state does not destroy the nexus between such a tax and transactions within a state for which the tax is an exaction.’

In Department of Treasury v. Wood Preserving Corp., 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188, the Indiana Gross Income Tax Act of 1933, c. 50, was upheld as applied to a foreign corporation engaged in the business of purchasing railroad ties and selling them to purchasers with whom it had a contract for treating the ties by creosoting them. As to the dealings in question it appeared that the taxpayer purchased and received the ties from local producers in Indiana and sold them to the Baltimore & Ohio Railroad Company, making delivery f.o.b. cars on the railroad tracks in Indiana, pursuant to contract. The ties were then forthwith transported to Ohio for treatment. It was held that the tax was predicated upon local transactions which were none the less intrastate because the ties were intended for interstate shipment. It was pointed out that the taxpayer did not pay the freight for the transportation and that there was a completed delivery to the railroad company in Indiana. J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429, which arose under the same taxing act of Indiana, wha distinguished. There the tax was laid upon receipts from sales where delivery was made to customers in other states and abroad.

The California sales tax here under discussion has been held applicable to a sale of petroleum pruducts within the state to purchasers intending to transport the products out of state. Standard Oil Co. v. Johnson, 56 Cal.App.2d 411, 132 P.2d 910. In that case delivery of some of the items, was made f.o.b. the purchasers tank cars. See, also, O'Kane v. State, 283 N.Y. 439, 28 N.E.2d 905, and Trotwood Trailers v. Evatt, 142 Ohio St. 197, 51 N.E.2d 645, upholding the validity of similar taxes, based upon local transactions prior to interstate transportation.

While all of the foregoing cases involved interstate commerce, and no case has arisen wholly concerned with foreign commerce since the advent of the modern view, yet those cases are authority in the field of foreign commerce, for the destination has no effect on the character of acts completed in a state. Otherwise the anomalous situation exists, that an act which is local if done where goods are intended for interstate commerce, is not local if done where goods are intended for foreign commerce, and California must accord a discriminatory favor to purchasers of commodities which go to a foreign country instead of a sister state or intrastate. If the imposition of a nondiscriminatory tax upon the privilege of selling, such as is the California sales tax, conditioned upon a sale and the passing of title by delivery within the borders of the state is not a regulation of commerce, nor a burden thereon, forbidden by article I, section 8, clause 3 of the federal Constitution, then it must follow as a matter of course that it is not an ‘impost’ or ‘duty’ on exports within the meaning of article I, section 10, clause 2 of that Constitution. It is to be noted that we do not have before us any form of direct tax on goods intended for export, or on the privilege of exporting, and the tax is not measured in terms of export or import. The California Retail Sales Tax is a general excise tax on the privilege of selling, a distinctly local activity, as distinguished from a personal property tax or a tax on the sale or because of the sale. Western Lithograph Co. v. State Board of Equalization, 11 Cal.2d 156, 78 P.2d 731, 117 A.L.R. 838; Roth Drug, Inc., v. Johnson, 13 Cal.App.2d 720, 57 P.2d 1022. To export is to send merchandise from one country to a foreign country. Exportation is the act of sending or carrying merchandise from one country to another. 1 Bouv.Law Dict., Rawle's Third Revision, p. 1161; Black, Law Dictionary). An export tax falls upon the one who takes the goods out of the country. Krauter v. Menchacatorre, 202 App.Div. 200, 195 N.Y.S. 361. In Brown v. Houston, 114 U.S. 622, 5 S.Ct. 1091, 1095, 29 L.Ed. 257, the court said, ‘A duty on exports must either be a duty levied on goods as a condition, or by reason of their exportation, or, at least, a direct tax or duty on goods which are intended for exportation. Whether the last would be a duty on exports, it is not necessary to determine.’ The California Retail Sales Tax is neither of these. The act of exportation in the case at bar is an immaterial consequence, subsequent to the occurrence of the taxable event, to wit: the transference of title and possession by delivery within the borders of this state. The mere fact that the goods were delivered on board a ship instead of inland to the purchaser does not transmute the fundamental nature of the tax. Furthermore, constitutional history discloses that the primary intent and purpose of article I, section 10, clause 2, was to prevent the seaboard states from benefiting, because of their location, at the expense and to the detriment of the remainder of the states. This much the majority opinion concedes. It was not intended to prevent the imposition of general taxes upon local privileges merely because goods were to be exported. Woodruff v. Parham, 8 Wall. 123, 134, 19 L.Ed. 382; The Federalist, No. 42; Story, Constitution, p. 714 (4th ed.); Warren, Making of the Constitution, p. 557. However, as pointed out in the majority opinion, the prohibition not being limited in terms has been applied to exports originating in the seaboard states. Crew-Levick Co. v. Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295. But the attitude of the United States Supreme Court, now recognizing the definitely local attributes of transactions also having foreign consequences, and the right of the states to deal therewith, makes possible more nearly the attainment of the original purposes of the constitutional provision, by preserving the right of the states to impose general taxes not aimed at foreign commerce, even though a state may still be prohibited from directly levying upon its own exports by virtue of the broad terms of the clause.

The majority opinion in reaching a contrary result relies principally upon the case of A. G. Spalding & Bros. v. Edwards, 262 U.S. 66, 43 S.Ct. 485, 67 L.Ed. 865. That case decided back in 1923 is distinguishable in a number of its aspects from the case at bar. The tax was not conditioned upon any local activity of the taxpayer or the consummation of any transaction within a state. It was not imposed by a state government but by the federal government itself, and was an excise tax upon the goods themselves. It was vitiated under article I, section 9, clause 5 of the Constitution. Further, delivery of the merchandise was made by the taxpayer to a common carrier which in turn transported the goods to the purchaser in a foreign port. In the case at bar the purchaser came to this country, received the goods and was thereafter free to take them wherever it chose.

In rejecting appellant's contention that the tax imposed in the case at bar is one imposed on retailers for the privilege of selling, and is not an ‘impost’ or ‘duty’ on exports within the meaning of the constitutional prohibition, the majority opinion cites Brown v. Maryland, 12 Wheat. 419, 6 L.Ed. 678, and Crew-Levick Co. v. Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295, both of which dealt with license taxes upon importers. In the former case the tax in the form of a license actually and potentially discriminated against domestic products or dealers therein, and in the latter case the tax was measured by gross receipts from sales and not conditioned upon the exercise of the taxpayer's franchise or any other local privilege. Cf. I. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 310, 312, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429; McGoldrick v. Berwind-White Coal Min. Co., supra, 309 U.S. at pages 57, 58, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876. A $3.00 imposition upon wholesale vendors doing business within the state in both internal and foreign commerce was not questioned. It was similarly urged in McGoldrick v. Berwind-White Coal Min. Co., supra, that the conclusion there reached was inconsistent with the line of decisions following Robbins v. Taxing Dist. of Shelby County, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694, which have held invalid license taxes to the extent that they have sought to tax the occupation of soliciting orders for the purchase of goods to be shipped into the taxing state. It was noted that in some instances these taxes were aimed at suppression or placing at a disadvantage interstate business in favor of intrastate sales and otherwise these cases were tacitly disapproved, the court deeming it sufficient to say that the rule of Robbins v. Taxing District of Shelby County, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694, had been narrowly limited to fixed-sum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped interstate and that the effect on commerce of such a tax was wholly wanting in the present case.

It follows from the foregoing considerations that I cannot agree with my associates in holding that the California Retail Sales Tax on the privilege of selling, which is accomplished within the state, and is nondiscriminatory in its elements, is an ‘impost’ or ‘duty’ within the purview of article I, section 10, clause 2, of the Constitution. Included in such a tax is no evil which the framers of the Constitution could be supposed to have intended to prevent. They were concerned with taxes which might be imposed because of the foreign character of the goods or resulting in the exaction of tribute because of that character. Woodruff v. Parham, supra; Cook v. Pennsylvania, 97 U.S. 566, 574, 24 L.Ed. 1015. To otherwise hold is to disregard the underlying concept of the late cases reviewed herein, recognizing that transactions completed wholly within a state may be so related to privileges which the state is authorized to grant or deny as to warrant sustaining of their existence solely because of such relationship.

To my mind, it is perfectly absured to say that the framers of the Constitution of the United States ever contemplated the proscription of such a tax, and it requires a most conservative and strained interpretation of its provisions to arrive at the conclusion reached in the majority opinion.

Simply stated, we have a situation where a product ‘oil’ was produced, refined and stored, and finally sold and delivered by plaintiff to a purchaser in California. The plaintiff as such producer has enjoyed the privilege of doing business in California, the protection of its laws, and the service of its governmental agencies. It now seeks to evade the payment of a purely nondiscriminatory excise tax on the privilege of selling its products, under the specious argument that because it is selling such products to a foreign government for foreign consumption, such tax amounts to an impost or duty on exports and is invalid as being in contravention of article I, section 10, clause 2, of the Constitution of the United States. I say without fear of refutation that no court in this country has ever held such a tax invalid under the factual situation here related. It is the modern concept that the tax burden should be distributed in accordance with the benefits received and the ability of the taxpayer to pay, but under the majority decision in this case the plaintiff is escaping its fair share of the tax burden of this state, which means the shifting of its share of such burden to other taxpayers. Furthermore, the effect of this decision will be to permit the oil compenies of this state to recover from the state all of the sales taxes which they paid on the huge quantities of oil sold by them to Japan prior to Pearl Harbor, if they have protected their right to such recovery, as I presume they have. Such recovery will no doubt amount to millions of dollars and will have a serious effect upon the revenues of the state. It seems clear to me that such a result should not be reached in the absence of a clear and positive constitutional mandate which is not present in this case.

In my opinion, the judgment should be reversed.

GIBSON, Chief Justice.

SHENK, CURTIS, EDMONDS, and SCHAUER, J., concurred. TRAYNOR, J., did not participate therein.