Wiley Blount Rutledge

“ The Oklahoma gross production tax requires payment of five per cent of the gross value of production, including royalty interests. It is imposed on every person engaged in the production in Oklahoma of petroleum, crude oil or other mineral oil, and natural gas and casinghead gas. ”

“ In 1908 Oklahoma imposed, in addition to ad valorem property taxes, a gross production tax, the progenitor of the present tax bearing that label, on oil, gas and other minerals produced within the state. ”

“ The respondents are 'private persons' who seek immunity 'for their property or gains because they are engaged in operations under a government contract or lease.' The functions they perform in operating the leases are hardly more governmental in character than those performed by lessees of school lands or, indeed, by many contractors with the Government. The lessees in the Mountain Producers case stood identically with the respondents in all these respects. ”

“ Although this decision may be taken to mark a turning point in expansion of the lessee's immunity, it was not immediately permitted to impair the Gillespie rationale. A tax on income would be no greater burden where, under applicable state law, 'title' to the oil did not 'p ss' until the oil was removed from the ground. ”

“ But, so far as concerns private persons claiming immunity for their ordinary business operations (even though in connection with governmental activities) , no implied constitutional immunity can rest on the merely hypothetical interferences with governmental functions here asserted to sustain exemption. In the light of the broad groundings of the Mountain Producers decision and of later decisions, we cannot say that the Gipsy Oil, Large Oil and Barnsdall Refineries decisions remain immune to the effects of the Mountain Producers decision and others which have followed it. ”

“ With certain exceptions, [1] the lands from which was extracted the petroleum sought to be taxed are held in trust by the United States, pursuant to allotments made under the General Allotment Act, [2] for various members of the Pottawatomie, Apache, Comanche, and Otoe and Missouria Tribes. [3] All the lands are located within the State of Oklahoma and at all material times they were restricted [4] against alienation by the Indian cestui owners without the consent of the Secretary of the Interior. [5] He approved each of the leases now in question. ”

“ Respondents strongly urge that the Mountain Producers decision is not controlling or effective to require reversal in these cases, since it involved a tax on ent income rather than gross production and excise taxes. ”

“ The Government, in its brief amicus curiae, states that, because differences in the value of different tracts of land would be reflected in the bonuses which lessees are willing to pay, an exact comparison of bonuses is impossible.↑ See James v. ”