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Law School Case Brief

Taber v. Indian Territory Illuminating Oil Co. - 300 U.S. 1, 57 S. Ct. 334 (1937)

Rule:

It is necessary to distinguish between a non-discriminatory tax upon the property of an agent of government and one which imposes a direct burden upon the exertion of governmental powers. In the former case, where there is only a remote, if any, influence upon the exercise of governmental functions, a non-discriminatory ad valorem tax is valid, although the property is used in the operations of the governmental agency.

Facts:

An oil company challenged the right of the county treasurer to tax property used by the oil company in its operations as lessee on an oil and gas lease covering restricted Native American lands. The Court found that the property was not taxable because the lessee was a federal instrumentality and the United States Congress had not consented to its taxation. The county treasurer petitioned the case for review.

Issue:

Was the property taxable?

Answer:

Yes

Conclusion:

The judgment was reversed and remanded for further proceedings in light of the fact that there was no immunity from the nondiscriminatory ad valorem tax. The court found that there had been no allegation that the tax in question was discriminatory, but merely a contention that the property was not subject to ad valorem taxation because of its use. Further, because there was at best only a remote influence upon the exercise of governmental functions, the non-discriminatory ad valorem tax was valid even though the property was used in the operations of the governmental agency.

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