General Motors Corp. v. Tracy, 519 U.S. 278, 8 (1997)

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Cite as: 519 U. S. 278 (1997)

Opinion of the Court

sion Ordered Investigation of the Availability of Gas Transportation Service Provided by Ohio Gas Distribution Utilities to End-Use Customers, No. 85-800-GA-COI (Ohio Pub. Util. Comm'n, Apr. 15, 1986); see generally Natural Gas Marketing and Transportation Committee, 1990 Annual Report, in Natural Resources Energy and Environmental Law, 1990 Year in Review 57, 91-92, and n. 207 (1991).

This new market structure led to the question whether purchases from non-LDC sellers of natural gas qualified for the state sales tax exemption under Ohio Rev. Code Ann. § 5739.02(B)(7) (Supp. 1990). In Chrysler Corp. v. Tracy, the Ohio Supreme Court held that they do not. The court reasoned that independent marketers do not "suppl[y]" natural gas as required by § 5727.01(D)(4), because they do "not own or control any physical assets to . . . distribute natural gas." 73 Ohio St. 3d, at 28, 652 N. E. 2d, at 187. This determination of state law led in turn to the case before us now.

During the tax period in question here, petitioner General Motors Corporation (GMC) bought virtually all the natural gas for its Ohio plants from out-of-state marketers, not LDC's.4 Respondent Tax Commissioner of Ohio applied the State's general use tax to GMC's purchases, and the State Board of Tax Appeals sustained that action. GMC appealed to the Supreme Court of Ohio on two grounds. GMC first contended that its purchases should be exempt from the sales tax because independent marketers fell within the statutory definition of "natural gas company." The State Supreme Court, citing its decision the same day in Chrysler, rejected this argument. See General Motors Corp. v. Tracy, 73 Ohio St. 3d 29, 30, 652 N. E. 2d 188, 189 (1995). GMC also argued that denying the tax exemption to sales by marketers violated the Commerce and Equal Protection Clauses. The Ohio court initially concluded that the State's

4 App. 156. Pursuant to Ohio's regulations authorizing LDC's to provide local transportation services, GMC took delivery of much of this gas from local utilities. Id., at 156-157.

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