For the prosecutor, Milton, McNulty & Augelli.
For the defendant City of Jersey City, Charles A. Rooney (John J. Meehan, of counsel).
For the defendant State of New Jersey, Division of Tax Appeals, Department of Taxation and Finance, Walter D. Van Riper, Attorney-General.
Before Justices Donges, Colie and Eastwood.
The opinion of the court was delivered by
EASTWOOD, J. Certiorari has been allowed to review the judgment of the New Jersey Division of Tax Appeals, Department of Taxation and Finance, made on November 12th, 1946, reversing the action of the Hudson County Board of Taxation setting aside and cancelling an assessment against prosecutor in the sum of $175,000, for the year 1943, upon fuel oil and kerosene owned by prosecutor and located in tanks
owned by Tankport Terminals, Inc., situate within the taxing district of Jersey City. By its judgment the State Division of Tax Appeals reinstated the validity of the assessment, but reduced it to the sum of $85,504.24.
Prosecutor is engaged in the business of buying and selling fuel oil and kerosene, having as its principal suppliers the Standard Oil Company of New Jersey and the Shell Oil Company. The source of supply is referred to in the testimony as the "gulf." The modus operandi of Maritime Petroleum Corporation is as follows: During the months of June, July and August of any year the prosecutor enters into contracts with its customers for the furnishing of fuel products. The contracts are actually entered into at a time when the prosecutor has as yet not received title to any oil from its suppliers. The amount of fuel contracted to be sold by the prosecutor is the factor governing the quantity purchased by it. The fuel is then shipped by tanker from the "gulf" to the storage point at Tankport, where it is pumped into tanks leased by the prosecutor and title to the fuel is then transferred to Maritime Petroleum Corporation. Prosecutor does not own the tankers in which the fuel is shipped, nor does it maintain any of its employees at Tankport Terminals, Inc., where the fuel is stored. The fuel is not processed in any way while it remains at Tankport Terminals, Inc., and it remains there for an indeterminate period, where it is mingled with fuel owned by other companies, and where it awaits shipment to the ultimate destination of the customers of prosecutor. Dependent upon the will of prosecutor's customers, the fuel is obtained at the storage site and transported by them either by truck or barge. Whatever the mode of transportation, the product in both cases is taken in facilities and equipment either owned or hired by customers of the prosecutor.
Prosecutor contends that the personal property in question is exempt from taxation under the provisions of R.S. 54:4-3.20, exempting personal property merely stored in a warehouse which is engaged in the business of storing goods for hire. It is said that the assessment complained of should be set aside on the further grounds that the fuel oil had no situs in the municipality for the purpose of taxation; that
prosecutor's property was in the course of interstate commerce and, therefore, not subject to taxation by the municipality. It is claimed by the defendants that the fuel oil was not stored in a warehouse for hire, but was actually held at Tankport Terminals, Inc., for the convenience of buyers either within or without the state; that the oil had come to rest within the state and was no longer in the course of interstate commerce and constituted a part of the general mass of property within the state subject to local taxing power; and further, that prosecutor is not entitled to ...