Hope Natural Gas Co
In Hope Natural Gas Co., 102 W. Va. 272, 135 S.E. 582, (1926), aff'd. 274 U.S. 284 (1927), the tax in question was one that taxed "every person engaging or continuing within this state in the business of mining and producing for sale, profit, or use, any coal, oil, natural gas, limestone, sand or other mineral product, or felling timber for sale, profit, or use." 102 W. Va. at 275, 135 S.E. at 583.
The amount of the tax was "equal to the value of the articles produced as shown by the gross proceeds derived from the sale thereof by the producer . . . multiplied by certain specified rates." Id.
In the case of natural gas, the rate was "one and seventeen-twentieths of one percent." Id.
Hope contended, among other things, that the tax as applied to its natural gas that was transported through its pipe line system and sold to customers in Ohio and Pennsylvania violated the Commerce Clause of the United States Constitution.
The Tax Commissioner contended that "there is no tax on the sale of the transportation of the gas or on the proceeds from the sale thereof." 102 W. Va. at 279, 135 S.E. at 584 . Rather, "the gross sales price is simply the taxable measure of the commodity." Id.
Hope, on the other hand, contended that the tax act evidenced a plain intention to tax the gross proceeds of sales in interstate commerce.
The Court held "that the Tax Commissioner may not treat the gross proceeds of plaintiff's sales outside the state as the worth of the gas within the state, but that the Tax Commissioner enforce the act upon the value thereof within the state and before it enters interstate commerce." 102 W. Va. at 284, 135 S.E. at 586.
In so-holding, the Court observed:
"There is a presumption, however, that the Legislature did not intend to violate any provisions of the federal constitution. In fact, it has been declared our duty to "restrain the operation of the statute within narrower limits than its words import" when satisfied that a literal interpretation will include cases not intended by the Legislature. Consequently, we are warranted in presuming that the Legislature did not mean to include, as an element of value, so much of the gross proceeds of the sale of an article in interstate commerce as is represented by the cost of transportation, and we restrain the operation of the statute accordingly." (102 W. Va. at 276, 135 S.E. at 583.)