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Timestamp: 2019-04-25 18:57:13+00:00

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[304 U.S. 307, 308] Messrs. Frederick E. Matson and Harry T. Ice, both of Indianapolis, Ind., for appellant.
In this case we are called upon to determine whether the Indiana Gross Income Tax Act of 1933,1 as construed and applied, burdens interstate commerce and impairs the obligation of contract in contravention of article 1, sections 8 and 10, of the Constitutio o f the United States.
The appellant, an Indiana corporation, manufactures road machinery and equipment and maintains its home office, principal place of business, and factory in the State. It sells 80 per cent. of its products to customers [304 U.S. 307, 309] in other states and foreign countries upon orders taken subject to approval at the home office. Shipments are made from the factory and payments are remitted to the home office. Pursuant to a practice of investing surplus funds not immediately required in its business, the appellant owns and receives interest upon bonds and notes of Indiana municipal corporations which, at the time they were issued, were declared by statute to be exempt from taxation.
The regulations issued by the Department of the Treasury, pursuant to authority granted by the Act, treat the exaction as a gross receipts tax;8 and the Attorney General says in his brief that it is a privilege tax upon the receipt of gross income. We think this a correct description.
We conclude that the tax is what it purports to be-a tax upon gross receipts from commerce. Appellant's sales to customers in other states and abroad are interstate and foreign commerce. The Act, as construed, imposes a tax of one per cent. on every dollar received from these sales.
So far as the sale price of the goods sold in interstate commerce includes compensation for a purely intrastate activity, the manufacture of the goods sold, it may be reached for local taxation by a tax on the privilege of manufacturing, measured by the value of the goods manufactured,14 or by other permissible forms of levy upon [304 U.S. 307, 314] the intrastate transaction. 15 It is because the tax, forbidden as to interstate commerce, reaches indiscriminately and without apportionment, the gross compensation for both interstate commerce and intrastate activities that it must fail in its entirety so far as applied t r eceipts from sales interstate.
The appellant insists that the exemption granted in the Acts of 1903 and 1919 constitutes a contract with purchasers of municipal securities the obligation of which is unconstitutionally impaired by the attempt to tax the interest they yield. The State replies that the Acts were [304 U.S. 307, 315] not intended to create a contract and did not in fact do so, but that if they did, the covenant did not embrace interest payable on municipal obligations but only ad valorem taxation upon them.
In the light of the foregoing facts we are of opinion that the case is controlled by Hale v. Iowa State Board, [304 U.S. 307, 316] 302 U.S. 95 , 58 S.Ct. 102. We are unable, therefore, to hold that the decision of the Supreme Court is plainly wrong, even upon the assumption that in adopting the statutory exemption the legislature intended to, and in fact did, contract with purchasers of municipal bonds.
The Indiana statute of 1933 here invalidated imposes 'a tax, measured by the amount or volume of gross income, ... upon ... all residents of the State of Indiana, and upon the gross income derived from sources within the State of Indiana, of all persons and ... companies, ... who are not residents of ... Indiana, but are engaged in business in this state.' Acts Ind.1933, c. 50, 2. The tax is general in effect throughout the entire State, applying to all who do business and who receive annual incomes in the State above $1,000 (with minor exceptions). It falls uniformly upon all such gross incomes whether derived from interstate or intrastate business or from investments, interest or services. 1 [304 U.S. 307, 317] There is no contention that the statute was inspired by any spirit of antagonism or hostility to interstate commerce or that it discriminates against interstate commerce in amount or method of application.
Concurrently with the passage of this Revenue Act, the Indiana legislature limited the tax that could be imposed upon other forms of property by the State or any 'taxing units within the state.' 2 The Supreme Court of Indiana in the opinion below3 said. 'Legislative history indicates that one of the purposes of the Gross Income Tax Law was to redistribute governmental burdens and relieve property of a tax burden which was thought to be too great.' Indiana passed this gross income tax law at a time when depressed economic conditions were causing the fiscal policies of many States to turn toward similar legislation. 4 [304 U.S. 307, 318] Serious financial difficulties of the States stimulated efforts to find new sources of taxation, andthe widespread belief that property was bearing an unfair burden of taxes also substantially contributed to the levying of these new taxes. 5 [304 U.S. 307, 319] Appellant is an Indiana corporation engaged in the business of manufacturing and selling road machinery. All of the machinery is manufactured in Indiana. Its office, only plant and all its properties are located in Indiana. Its products are sold to ultimate purchasers in Indiana and other States by independent distributors or through sales agents of appellant. All sales must be approved by, and all payments made to appellant's office in Indiana. While appellant is thus engaged in interstate commerce, obviously, a major portion of its activities takes place in Indiana.
This power to regulate commerce among the States 'like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution.' 6 [304 U.S. 307, 320] The question, therefore, is whether-in the absence of regulatory legislation by Congress condemning state taxes on gross receipts from interstate commerce-the commerce clause, of itself, prohibits all such state taxes, as 'regulations' of interstate commerce, even though general, uniform and nondiscriminatory.
All state taxes on gross receipts from interstate commerce do not discriminate against, or impose extraordinary burdens upon, that commerce. Those that do not, do no more than impose a normal burden of government upon that commerce. On the other hand, some state gross income taxes may be designed or applied so as seriously to impede the freedom of interstate commerce. If interstate commerce should be so impeded, Congress might- under its commerce power-find it 'necessary and proper' to condemn all state taxes on gross receipts, in order to 'carry into execution' its granted power to regulate and protect interstate commerce. 7 We are not here confronted with such a congressional enactment. Should the Indiana law, and all state taxes on gross receipts from interstate commerce, as such-in the absence of such enactment-be condemned as a regulation of interstate commerce in the constitutional sense?
'It (the tax under consideration) is not a general tax on the incomes of all the inhabitants of the state, but a special tax on transportation companies. Conceding, however, that an income tax may be imposed on certain classes of the community, distinguished by the character of their occupations, this is not an income tax on the class to which it refers, but a tax on their receipts for transportation. ... It is clearly not such, but a tax on transportation only.' (Italics supplied.) [304 U.S. 307, 323] Previous decisions had held that the Commerce Clause did not prohibit state taxes on gross receipts from interstate commerce. 9 The effect of these prior decisions was modified by the Philadelphia & S. Mail Steamship Co. Case. The latter case decided (contrary to the previous decisions) that a state tax on gross receipts received for actual interstate transportation is prohibited by the Commerce Clause. In that case the tax invalidated was a selective [304 U.S. 307, 324] tax applied to the particular business of transportation. Consequently, the Court did not decide whether a state could constitutionally impose a general gross income tax (such as Indiana's) to an interstate business ( such as appellant's) not involving transportation. Crew Levick Co. v. Pennsylvania, 245 U.S. 292 , 38 S.Ct. 126, December, 1917, and United States Glue Co. v. Oak Creek, 247 U.S. 321 , 38 S.Ct. 499, Ann.Cas.1918E, 748, June, 1918, marked the all-inclusive condemnation of state taxes on gross receipts from interstate commerce, as a class-without regard to discrimination or generality.
A tax upon property used in interstate commerce, even with an augmented value due to such use, is not a regulation of commerce, is valid and is within the powers of the state. 10 Yet, the constitutional validity of a tax on property does not turn upon whether the property is profitable to its owner.Gr oss receipts from interstate commerce-as from all sources- vary and will probably rise and fall with property values. Therefore, the total amount exacted from interstate commerce under a gross receipts tax can fluctuate just as the total paid under a property tax. Since property and corporate franchises used in interstate commerce can be constitutionally taxed by States, whether profitable or unprofitable, it seems difficult to justify a constitutional test for state income taxes based upon existence or absence of profit.
The application of such a constitutional test will-as a practical matter-inevitably result in exempting all [304 U.S. 307, 326] enterprises engaged in interstate commerce from all state gross income taxes on interstate commerce receipts, whether profitable or not. At the same time, local intrastate enterprises, doing business in the same communities, must pay state gross receipts taxes whether profitable or unprofitable. Such a construction of the Commerce Clause-designed to prevent a State from imposing unfair tax burdens upon those engaged in interstate commerce-actually serves to impose an unfair and discriminatory burden upon local intrastate business. Failure of an interstate business to make a profit does not relieve the State of its burden in affording protection for that business. While the Federal government is charged with the constitutional duty of protecting and fostering interstate commerce by proper regulation11 it has not attempted to provide local governmental protection for those engaged in such commerce. However desirable it may be, as a tax policy, to tax in accordance with ability to pay, the failure to make a profit should not of itself create a constitutional exemption from a tax which the State might otherwise impose. 12 And, as a practical matter, state taxing authorities may be moved by the consideration that profits are not always capable of ascertainment with complete accuracy and certainty. 13 [304 U.S. 307, 327] It has been suggested, however, that Indiana might by law apportion to itself that part of a tax on gross receipts from interstate commerce to which it is entitled. Such an apportionment by Indiana woul, in effect, fix the portion of such a tax for the other forty-seven States which appellant's interstate business might touch. Indiana has no authority to determine what, how, when or to what extent other States may tax within their respective boundaries. If such power of apportionment or allocation exists at all, it must be true that the only repository of a power touching complex and national aspects of interstate commerce is not Indiana, not the Judiciary-but the National Congress.
It also urged that a gross receipts tax under the Commerce Clause is invalid because it might result in multiple burdens on interstate commerce. 14 The possibility is suggested that the States may use gross income taxes to [304 U.S. 307, 328] create direct, extraordinary, and unjust burdens upon interstate commerce and that this possibility requires that all state taxes on gross interstate commerce receipts be condemned as within the prohibition of the Commerce Clause. Congress was undoubtedly given the exclusive power to regulate commerce in order that undue, unjust and unfair burdens might not be imposed upon such commerce. 15 It was not intended, however, that interstate commerce should enjoy a preferred status over intrastate business or to remove those engaged in interstate commerce from the ordinary and usual burdens of the government which affords such commerce protection. 16 A court may act to protect a litigant from unfair and unjust burdens upon the litigant's interstate business. Yet, it would seem that only Congress has the power to formulate rules, regulations and laws to protect interstate commerce from merely possible future unfair burdens. Here the record does not indicate any charge or proof of an existing extraordinary, unfair or multiple tax burden on appellant. The tax burden from which appellant is here exempted is one which the local taxpayers of Indiana must bear. As a result, an unjust and unfair burden is actually imposed upon intrastate business, because of an apprehension of a possible future injury to interstate commerce. The control of future conduct, the prevention of future injuries and the formulation of regulatory rules in the fields of commerce and taxation, all present legislative problems.
It has been often said that no formula can be devised for determining in all cases whether or not a state tax is prohibited by the Commerce Clause, and that 'the question is inherently a practical one, depending for its decision on the special facts of each case ....'20 A formula which arbitrarily stamps every state gross receipts tax as a violation of the Commerce Clause, on the ground that it can be used for cumulative tax purposes, leaves unanswered the possibility that other taxes, previously held valid, may be used with like effects on interstate commerce; disregards the fact that in many cases, as here, [304 U.S. 307, 330] such a tax can be fairly and uniformly applied to both interstate and intrastate commerce; and in effect actually denies a State the privilege of using such a tax unless willing to impose unjust and unequal burdens upon its own citizens engaged in intrastate commerce.
The receipt of income is a taxable event and need not necessarily enjoy the immunity of the income's source. 21 Appellant's receipt of gross income could be taxed in one State only, because appellant received income only in Indiana. A sales tax might possibly be imposed upon independent distributors of appellant's products who do business in other States. Such tax would be constitutional only if it did not discriminate against appellant's products. 22 Distributors in States other than Indiana do [304 U.S. 307, 331] business under the protection of their respective States. Under these circumstances, nondiscriminatory sales taxes in those States upon the distributors create no unfair multiplication of taxes and would not be unconstitutional. 23 The manufacturer who receives protection under the laws of Indiana and the distributors who receive protection under the laws of the States in which products are sold, should be subject to uniform, nondiscriminatory taxes imposed by the sovereign power of the States in which both do business under State protection.
If it be true, as urged, that some state gross receipts taxes may possibly in the future be multiplied so as to burden interstate commerce unfairly, it is equally true that other state gross receipts taxes (as the Indiana tax) may not, in the absence of such multiplication, result in such burdens. Since the present litigation has developed that no such unfair burdens have been imposed upon appellant's interstate business, appellant can only be exempted from payment of this tax by application of a regulatory rule or law which condemns all such state taxes-whether fair or unfair. If such a general rule or law is to be promulgated it would seem that under our constitutional division of governmental powers such a regulatory policy should be considered and determined by Congress under its exclusive grant. It will be time enough for judicial protection when a litigant actually proves, in a particular case, that state gross receipts taxes levied against the litigant have resulted in unfai a nd unjust discrimination against the litigant because of engagement [304 U.S. 307, 333] in interstate commerce. Many arguments-which we might believe to be sound- can be advanced against the legislative policy of a gross receipts tax. These objections, however, are not the criterion of its constitutionality. With the wisdom of such fiscal policy of a State we are not concerned. 27 The interests of interstate commerce will best be fostered, preserved and protected-in the absence of direct regulation by the Congress-by leaving those engaged in it in the various States subject to the ordinary and nondiscriminatory taxes of the States from which they receive governmental protection. For these reasons I believe that the entire judgment of the court below should be affirmed.
[ Footnote 1 ] Indiana Acts 1933, c. 50, Ind.Stat.Ann., Burns', 64-2601 et seq.
[ Footnote 2 ] 7 N.E.2d 941, 944.
[ Footnote 3 ] Compare Miles v. Department of Treasury, 209 Ind. 172, 188, 199 N.E. 372, 379, 101 A.L.R. 1359.
[ Footnote 4 ] Compare Matson Navigation Co. v. State Board, 297 U.S. 441, 444 , 56 S.Ct. 553, 554.
[ Footnote 5 ] Compare American Manufacturing Co. v. St. Louis, 250 U.S. 459 , 39 S. Ct. 522; Oliver Iron Mining Co. v. Lord, 262 U.S. 172 , 43 S. Ct. 526; Hope Natural Gas Co. v. Hall, 274 U.S. 284 , 47 S.Ct. 639; Utah Power & Light Co. v. Pfost, 286 U.S. 165 , 52 S.Ct. 548.
[ Footnote 6 ] Compare Postal Telegraph Cable Co. v. Adams, 155 U.S. 688 , 15 S.Ct. 268, 360; United States Express Co. v. Minnesota, 223 U.S. 335 , 32 S.Ct. 211; Pullman Co. v. Richardson, 261 U.S. 330 , 43 S.Ct. 366.
[ Footnote 7 ] Indiana Acts of 1932, Sp.Sess. c. 10, p. 17.
[ Footnote 9 ] See Western Live Stock v. Bureau of Revenue, 303 U.S. 250 , 58 S.Ct. 546.
[ Footnote 10 ] Cook v. Pennsylvania, 97 U.S. 566 ; Fargo v. Michigan, 121 U.S. 230 , 7 S.Ct. 857; Philadelphia & Southern Mail S.S. Co. v. Pennsylvania, 122 U.S. 326 , 7 S.Ct. 1118; Galveston, etc., Ry. Co. v. Texas, 210 U.S. 217 , 28 S.Ct. 638; Meyer v. Wells Fargo & Co., 223 U.S. 298 , 32 S.Ct. 218; The Minnesota Rate Cases, 230 U.S. 352, 400 , 33 S.Ct. 729, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18; Crew Levick Co. v. Pennsylvania, 245 U.S. 292 , 38 S.Ct. 126; United States Glue Co. v. Oak Creek, 247 U.S. 321, 328 , 38 S.Ct. 499, Ann.Cas.1918E, 748; New Jersey Bell Telph one Co. v. State Board of Taxes & Assessment, 280 U.S. 338, 349 , 50 S.Ct. 111, 114; Fisher's Blend Station v. State Tax Commission, 297 U.S. 650, 655 , 56 S.Ct. 608, 610; Puget Sound Stevedoring Co. v. State Tax Commission, 302 U.S. 90 , 58 S.Ct. 72; Western Live Stock v. Bureau of Revenue, 303 U.S. 250 , 58 S.Ct. 546.
[ Footnote 11 ] Crew Levick Co. v. Pennsylvania, 245 U.S. 292 , 38 S.Ct. 126; Spalding & Bros. v. Edwards, 262 U.S. 66, 69 , 43 S.Ct. 485, 486; Cooney v. Mountain States Tel. & Teleg. Co., 294 U.S. 384, 393 , 55 S.Ct. 477, 482.
[ Footnote 12 ] Compare Bass, Ratcliff & Gretton v. State Tax Comm., 266 U.S. 271, 280 , 45 S.Ct. 82; Educational Films Corp. v. Ward, 282 U.S. 379, 387 , 388 S., 51 S.Ct. 170, 171, 71 A.L.R. 1226.
[ Footnote 14 ] Oliver Iron Mining Co. v. Lord, 262 U.S. 172 , 43 S.Ct. 526; Hope Natural Gas Co. v. Hall, 274 U.S. 284 , 47 S.Ct. 639; American Mfg. Co. v. St. Louis, supra.
[ Footnote 15 ] Utah Power & Light Co. v. Pfost, 286 U.S. 165 , 52 S.Ct. 548; Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17 , 54 S.Ct. 267; Chassaniol v. Greenwood, 291 U.S. 584 , 54 S.Ct. 541.
[ Footnote 16 ] Acts of Indiana 1903, c. 179, p. 322.
[ Footnote 17 ] Acts of Indiana 1919, c. 59, 5 (twentieth), p. 203.
[ Footnote 18 ] South Bend v. University of Notre Dame Du Lac, 69 Ind. 344, 348; Read v. Yeager, 104 Ind. 195, 199, 3 N.E. 856.
[ Footnote 1 ] The generality of this tax is made clear in its definition of gross income as including, with minor exceptions, 'the gross receipts of the taxpayer received as compensation for personal services, and the gross receipts of the taxpayer derived from trades, businesses or commerce, and the gross receipts proceeding or accruing from the sale of property, tangible or intangible, real or personal, or service, or any or all of the foregoing, and all receipts by reason of the investment of capital, including interest, discount, rentals, royalties, fees, commissions or other emoluments, however designated ....' Section 1(f), chapter 50, Indiana Acts 1933.
[ Footnote 2 ] Acts of Indiana 1933, p. 1085, Act approved March 9, 1933. The Gross Income Tax Law was approved February 27, 1933, Acts 1933, Indiana, c. 50, 78th Sess., p. 388.
[ Footnote 3 ] 7 N.E.2d 941, 945.
[ Footnote 6 ] Cf. Gibbons v. Ogden, 9 Wheat. 1, 196, 197. Since Congress has not acted upon this subject, the present case does not involve a manifestation by Congress of its paramount and exclusive authority to regulate an aspect of interstate commerce with which the states may deal (because of its local nature) until Congress acts. Cf., New York C. & H.R. Co. v B oard of Chosen Freeholders of County of Hudson, 227 U.S. 248 , 35 S.Ct. 269.
[ Footnote 7 ] Cf., Houston, E. & W. Texas R. Co. v. United States, The Shreveport Case, 234 U.S. 342 , 350 et seq., 34 S.Ct. 833.
[ Footnote 8 ] '... the bare fact that one is carrying on interstate commerce does not relieve him from many forms of state taxation which add to the cost of his business. He is subject to a property tax on the instruments employed in the commerce ... and if the property devoted to interstate transportation is used both within and without the state, a tax fairly apportioned to its use within the state will be sustained .... Net earnings from interstate commerce are subject to income tax ... and, if the commerce is carried on by a corporation, a franchise tax may be imposed, measured by the net income from business done within the state, including suc p ortion of the income derived from interstate commerce as may be justly attributable to business done within the state by a fair method of apportionment. ... All of these taxes in one way or another add to the expense of carrying on interstate commerce, and in that sense burden it; but they are not for that reason prohibited.' Western Live Stock v. Bureau of Revenue, 303 U.S. 250 , 58 S.Ct. 546, 548.
'... we think it may safely be laid down that the gross receipts of railroad or canal companies, after they have reached the treasury of the carriers, though they may have been derived in part from transportation of freight between States, have become subject to legitimate taxation. It is not denied that net earnings of such corporations are taxable by State authority without any inquiry after their sources, and it is difficult to state any well-founded distinction between the lawfulness of a tax upon them and that of a tax upon gross receipts, or between the effects the w ork upon commerce, except perhaps in degree.' State Tax on Railway Gross Receipts, 15 Wall. 284, 293, 296.
'... It is as important to leave the rightful powers of the State in respect to taxation unimpaired as to maintain the powers of the Federal government in their integrity.
'It is to be observed that Congress has never undertaken to exercise this power in any manner inconsistent with the municipal ordinance under consideration, and there are several cases in which the court has asserted the right of the State to legislate, in the absence of legislation by Congress, upon subjects over which the Constitution has clothed that body with legislative authority.' Osborne v. Mobile, 16 Wall. 479, 481, 482.
[ Footnote 10 ] Cf., Cudahy Packing Company v. State of Minnesota, 246 U.S. 450, 453 , 454 S., 38 S.Ct. 373; United States Express Co. v. Minnesota, 223 U.S. 335, 345 , 347 S., 32 S.Ct. 211.
[ Footnote 11 ] Dayton-Goose Creek Railway Co. v. United States, 263 U.S. 456, 478 , 44 S.Ct. 169, 172, 33 A.L.R. 472.
[ Footnote 12 ] State Railroad Tax Cases, 92 U.S. 575 , 606; cf., Ohio Tax Cases, 232 U.S. 576, 590 , 34 S.Ct. 372.
[ Footnote 13 ] Cf., with reference to a state tax law assailed as violative of the Fourteenth Amendment, dissent of Mr. Justice Cardozo: 'But profits themselves are not susceptible of ascertainment with certainty and precision except as the result of inquiries too minute to be practicable. The returns of the taxpayer call for an exercise of judgment as well as for a transcript of the figures on his books. They are subject to possible inaccuracies, almost without number. Salaries of superintendence, figuring as expenses, may have been swollen inordinately; appraisals of plant, of merchandise, of patents, of what not, may be erroneous or even fraudulent. In the words of a student of the problem, 'statements of profits are affected both by accounting methods and by the optimistic or pessimistic light in which the future is viewed at the time when the accounts are made up.' ... These difficulties and dangers bear witness to the misfortune of forcing methods of taxation within a Procrustean formula. If the state discerns in business operations uniformities and averages that seem to point the way to a system easier to administer than one based upon a report of profits, and yet likely in the long run to work out approximate equality, it ought not to be denied the power to frame its laws accordingly.' Stewart Dry Goods Co. v. Lewis, 294 U.S. 550, 576 , 577 S., 55 S. Ct. 525, 536.
[ Footnote 14 ] See, Western Live Stock v. Bureau of Revenue, 303 U.S. 250 , 58 S. Ct. 546.
[ Footnote 15 ] Philadelphia & S. Mail Steamship Co. v. Pennsylvania, 122 U.S. 326, 346 , 7 S.Ct. 1118.
[ Footnote 16 ] See, Woodruff v. Parham, 8 Wall. 123, 137.
[ Footnote 17 ] American Mfg. Co. v. St. Louis, 250 U.S. 459 , 39 S.Ct. 522.
[ Footnote 18 ] Apparently, if the Indiana tax had been 'on the privilege of manufacturing, measured by the total gros r eceipts from sales of the manufactured goods, both intrastate and interstate' instead of designated as 'a tax, measured by the amount or volume of gross income' received from manufacturing and sales interstate and intrastate, the tax would be held valid. See, Western Live Stock v. Bureau of Revenue, 303 U.S. 250 , 58 S.Ct. 546.
[ Footnote 19 ] Hump Hairpin Co. v. Emmerson, 258 U.S. 290, 294 , 42 S.Ct. 305, 307; Maine v. Grand Trunk Railway Co., 142 U.S. 217 , 12 S.Ct. 121, 163; Wisconsin & Michigan Railway Co. v. Powers, 191 U.S. 379 , 24 S.Ct. 107; United States Express Co. v. Minnesota, 223 U.S. 335, 343 , 32 S.Ct. 211.
[ Footnote 20 ] Hump Hairpin Co. v. Emmerson, supra, at page 295, 42 S.Ct. at page 307.
[ Footnote 21 ] In sustaining an income tax law of the State of New York against a challenge that it violated the Fourteenth Amendment, it was said: 'That the receipt of income by a resident of the territory of a taxing sovereignty is a taxable event is universally recognized. Domicil itself affords a basis for such taxation. Enjoyment of the privileges of residence in the state and the attendant right to invoke the protection of its laws are inseparable from responsibility for sharing the costs of government. 'Taxes are what we pay for civilized society.' ... Neither the privilege nor the burden is affected by the character of the source from which the income is derived. For that reason income is not necessarily clothed with the tax immunity enjoyed by its source. ... It may tax net income from operations in interstate commerce, although a tax on the commerce is forbidden, United States Glue Co. v. Oak Creek, 247 U.S. 321 , 38 S.Ct. 499, Ann.Cas. 1918E, 748; Shaffer v. Carter, supra, ( 252 U.S. 37, 50 , 40 S.Ct. 221, 224).' New York ex rel. Cohn v. Graves, 300 U.S. 308, 312 , 313 S., 57 S.Ct. 466, 467, 108 A.L.R. 721. The dissent called attention to the fact that not only was the New York taxpayer subject to an income tax in that State by the decision b ut that 'New Jersey, in addition to tax on the land measured by its value, may lay a tax upon the income received by the owner for its use.' At page 318, 57 S.Ct. at page 470.
[ Footnote 23 ] Sonneborn Bros. v. Cureton, 262 U.S. 506 , 43 S.Ct. 643.
[ Footnote 24 ] See, Philadelphia & S. Mail Steamship Co. v. Pennsylvania, supra.
[ Footnote 25 ] County of Mobile v. Kimball, 102 U.S. 691 , 697.
[ Footnote 26 ] Woodruff v. Parham, 8 Wall. 123, 140.
[ Footnote 27 ] Cf. Purity Extract & Tonic Co. v. Lynch, 226 U.S. 192 , 33 S.Ct. 44.

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