State v. Arkansas Fuel Oil Corp.

In order to avoid conflict with the Commerce Clause of the United States Constitution, Art. I, Sec. 8, the power use tax was based upon the power generated and employed. See: Coverdale v. Arkansas-Louisiana Pipeline Co., 303 U.S. 604, 58 S.Ct. 736, 82 L.Ed. 1043, a test case wherein the impost was recognized to be a tax on the activity of generating power as distinct from the activity of applying the power to operate transmission service. It is, therefore, a privilege, excise or occupational license tax, but is in no sense a property tax, although measured by the horsepower capacity of the…