Oklahoma Tax Commission v. Jefferson Lines, Inc.

PETITIONER:Oklahoma Tax Commission
RESPONDENT:Jefferson Lines, Inc.
LOCATION:U.S. Department of Transportation

DOCKET NO.: 93-1677
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eighth Circuit

CITATION: 514 US 175 (1995)
ARGUED: Nov 28, 1994
DECIDED: Apr 03, 1995

Steven D. DeRuyter – on behalf of the Respondent
Stanley P. Johnston – on behalf of the Petitioner

Facts of the case


Media for Oklahoma Tax Commission v. Jefferson Lines, Inc.

Audio Transcription for Oral Argument – November 28, 1994 in Oklahoma Tax Commission v. Jefferson Lines, Inc.

Audio Transcription for Opinion Announcement – April 03, 1995 in Oklahoma Tax Commission v. Jefferson Lines, Inc.

Sandra Day O’Connor:

The opinion in number 93-1677, Oklahoma Tax Commission v Jefferson Lines Inc. will be announced by Justice Souter.

David H. Souter:

This case comes to us on Writ of Certiorari to the Eight Circuit.

Oklahoma taxes sales and transportation for hire when the sale is made within the state.

As with sales taxes generally, the buyer must pay the tax to the seller who then transfer collected tax over to the state.

In this case Jefferson Lines, a bus company refused to collect and pass along sales taxes on bus travel from Oklahoma to other states.

Although it did collect and remit taxes to travel that began and ended within the state.

In the course of bankruptcy proceedings, the state start to recover the uncollected taxes, but Jefferson objected arguing that by taxing ticket sales at 4% regardless of whether the trip takes place wholly within Oklahoma, what takes a passenger out of state, Oklahoma was acting in violation of the Commerce Clause.

Jefferson maintained that by taxing more than a portion of the ticket price that reflected travel within Oklahoma or itself, Oklahoma was taxing value derived from travel through other states.

Jefferson further argued that the tax payer was thus place at the risk of multiple taxation because any other state through which the bus travels would be able to impose its own taxes upon Jefferson or its passengers for use of the roads.

Jefferson relied for support on the case of Central Greyhound Lines, Inc. against Mealey, decided by this court in 1948 which struck down the tax on bus tickets by New York on much of the same grounds; although there the tax was collected not indirectly from the purchases but directly from the bus company.

The Bankruptcy Court agreed with Jefferson, the District Court affirmed and so did the Court of Appeals.

In an opinion filed with the clerk of court today, we reverse the judgment of the Eight Circuit and hold that Oklahoma’s tax does not violate the Commerce Clause.

The sale of the transportation services here the payment for receipt of the ticket for present commencement of the trip because in one state alone, and is akin to the traditional sales transaction, which at least in the context of the sale of goods, we have long recognized as permitting a full sales tax to the buyer.

We therefore classify Oklahoma’s tax with taxes of sales generally.

In so far as Central Greyhound points the other way, we find that it differs from Oklahoma’s sales tax and that the New York tax was placed directly on the seller and it was that feature which give rise the possibility of multiple taxation.

Here the tax falls on the buyer of the services who is no more subject to multiple taxation than the buyer of goods would be.

Justice Scalia has filed an opinion concurring in the judgment in which Justice Thomas joins.

Justice Breyer has filed a dissenting opinion in which Justice O’Connor joins.