American Airways, Inc. v. Wallace
District Court, M.D. Tennessee · 1932-03-31 · cited 4×
This case involved a suit by American Airways, a nonresident airline primarily engaged in interstate commerce, seeking to enjoin Tennessee state officials from collecting a state excise tax on the storage and distribution of gasoline used to refuel its planes at in-state landing fields. The tax was imposed under Tennessee statutes as a privilege tax on businesses storing or distributing gasoline, computed on withdrawals from storage. The court denied the application for a temporary injunction, holding that the tax applied to the plaintiff's in-state business activities and did not constitute an unconstitutional burden on interstate commerce under the Commerce Clause. It reasoned that the tax targeted the privilege of engaging in storage and distribution within the state rather than directly regulating or burdening interstate transportation, and that the airline was not an instrumentality of the federal government exempt from such taxation. The court also noted the availability of an adequate remedy at law through payment under protest and a refund suit.