Charles Evans Hughes

“ These decisions in a variety of applications enforce what we deem to be the controlling view-that immunity from non-discriminatory taxation sought by a private person for his property or gains because he is engaged in operations under a government contract or lease cannot be supported by merely theoretical conceptions of interference with the functions of government. ”

“ Nor, when oil or gas is produced, does the statute base the percentage on market value. The gross income from time to time may be more or less than market value according to the bearing of particular contracts. We do not think that we are at liberty to construct a theoretical gross income by recourse to the expenses of production operations. The Refining Company for its own purposes undertook the expense of those operations, and Wyoming Associated was content to receive as its own return the cash payments for the oil produced, leaving to the Refining Company the risks of production. ”

“ Both the Congress and the States have the power to tax transfers or successions in case of death, and this power extends to the taxation by a state of bequests to the United States and to the taxation by the Congress of bequests to states or their municipalities. ”

“ Respondent, Mountain Producers Corporation, owned all the capital stock of the Wyoming Associated Oil Corporation and filed a consolidated income tax return for the year 1925. Two distinct questions are involved with respect to the taxable income of the above-mentioned affiliate. These are (1) as to the amount of the gross income of the affiliate for the purpose of the statutory allowance for depletion in the case of oil and gas wells (Revenue Act 1926, §§ 204 (c) (2) , 234 (a) (8) , 44 Stat. ”

“ Oklahoma, supra, could not be taxed by the state; for the lessee was an instrumentality used by the United States in fulfilling its duties to the Indians. [4] The Court said (257 U.S. 501, at page 506, 42 S.Ct. 171, 172, 66 L.Ed. 338) : 'The same considerations that invalidate a tax upon the leases invalidate a tax upon the profits of the leases, and, stopping short of theoretical possibilities, a tax upon such profits is a direct hamper upon the effort of the United States to make the best terms that it can for its wards.' Jaybird Mining Co. ”

“ In such a case, as the state was executing a trust imposed by Congress as a condition of the state's entering the Union, the cases in which the state had engaged in business enterprises, apart from what should be deemed to be its essential governmental functions, were thought to be inapplicable. ”