Group No. 1 Oil Corp. v. Bass

Petitioner brought suit in the District Court for Western Texas to recover federal income taxes alleged to have been illegally exacted for its fiscal years 1925 to 1928, inclusive. It set up that in those years it received income derived from the sale of oil and gas produced under leases to it by the State of Texas; that these leases were instrumentalities of the State for the development of its public domain; and that petitioner’s income derived from them was constitutionally immune from the tax as one imposed by the Federal Government on an instrumentality of the State. The District Court…