There was a marked difference in the components of the franchise tax base for domestic and foreign corporations. The latter had virtually no leeway to minimize their Alabama franchise tax liabilities. Given those facts, it was not surprising the Supreme Court found the Alabama foreign franchise tax to be unconstitutional. The basic guarantee of the Commerce Clause is to prohibit discrimination absolutely. Such wrongful action impedes, if not destroys altogether, the free flow of goods and services between states.
Interstate commerce is the economic lifeblood of the United States.
The Court has never tolerated any state's discrimination against citizens of other states even when those citizens were corporate entities and the discrimination was supposedly merely one of taxation. In these days of overlapping tax jurisdictions, it is even more imperative that the constitutional guarantee of the Commerce Clause be honored in fact as well as in theory. This nation's founders correctly concluded that anything other than a completely neutral state tax structure would choke off interstate commerce, to the detriment of all. It is to be hoped state lawmakers will not try, instead, to legislate taxes that discriminate in more subtle ways in an effort to circumvent South Central Bell entirely. The mere issuance of this opinion requires every multistate corporation to carefully compare its individual tax burden in states where it is a foreign corporation to the burden borne by its native counterparts.