Court Opinion

ID: 9419898
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:52:00.487418+00
Date Added: 2024-06-11T17:22:21.172298
License: Public Domain

Mr. Justice Rutledge,
concurring.
This is a case in which the grounding of the decision is more important than the decision itself. Whether the Court now intends simply to qualify or to repudiate entirely, except in result, Adams Mfg. Co. v. Storen, 304 U. S. 307, I am unable to determine from its opinion. But that one or the other consequence is intended seems obvious from its refusal to rest the present decision squarely on that case, together with the wholly different foundation on which it now relies. In either event, the matter is important and calls for discussion.
I.
The Adams case held the Indiana tax now in issue to be invalid when applied, without apportionment, to gross receipts derived from interstate sales of goods made by Indiana manufacturers who sold and shipped them to purchasers in other states. “The vice of the statute” as thus applied, it was held, was “that the tax includes in its measure, without apportionment, receipts derived from activities in interstate commerce; and that the exaction is of such a character that if lawful it may in substance be laid to the fullest extent by States in which the goods are sold as well as those in which they are manufactured. Interstate commerce would thus be subjected to the risk of a double tax burden to which intrastate commerce is *260not exposed, and which the commerce clause forbids.” (Emphasis added.) 304 U. S. 307, 311.1
Today’s opinion refuses to rest squarely on the Adams case, although that case would be completely controlling if no change in the law were intended. No basis for distinguishing the cases on the facts or the ultimate questions is found or stated. The Court takes them as identical.2 Yet it places no emphasis upon apportionment, the absence of which the Adams opinion held crucial. The Court also puts to one side as irrelevant the factor there most stressed, namely, the danger of multiple taxation, that is, of similar taxation by other states, if the Indiana tax should be upheld in the attempted application.
Those matters were the very essence of the Adams decision. They were in its words “the vice” of the statute as applied. The Adams opinion gives no reason for believing that the application of the tax would not have been sustained if either of the two elements vitiating it had been absent. On the contrary, the fair, indeed the necessary, inference from the language and reasons given is that the tax would not have been voided if there had been no danger of multiple state taxation or if the tax had been apportioned so as to eliminate that risk. Moreover those *261groundings were strictly in accord with long lines of previous decisions rendered here,3 were intended to conform to them and to preserve them unimpaired.
Yet now they are put to one side, either as irrelevant or as not controlling and therefore presumably as insufficient,4 in favor of another rationalization which ignores them completely. Shortly, this is, in reiterated forms, that the tax as applied is laid “directly on” interstate commerce, is a levy “on the very sale” or “the very process” of such commerce, is therefore and solely thereby a “burden” on it, and consequently is an exaction the commerce clause forbids. What outlaws it is neither comparative disadvantage with local trade nor any actual or probable clogging or impeding effect in fact.5 It is simply the “direct” bearing and “incidence” of the tax on interstate commerce and this alone. Stripped of any discriminatory element and of any actual or probable tendency to block or impede the commerce in fact, this “direct incidence” is itself enough without more to invalidate the tax, although it is one of general application singling out the commerce neither for separate nor for distinct or invidious treatment.
If this ever was the law, it has not been such for many years. In a sense it is a reversion to ideas once preva*262lent, but long since repudiated,6 about the “exclusiveness” of Congress’ power over interstate commerce which, if now resurrected for general application, will strike down state taxes in a great variety of forms sustained consistently of late. Not since Cooley v. Board of Wardens, 12 How. 299, has the notion prevailed that the mere existence of power in Congress to regulate commerce excludes the states from exacting revenue from it through exercise of their powers of taxation.7 Yet if a general tax, applying to all commerce alike, is to be outlawed, regardless of discriminatory consequences or actual or probable impeding effect in fact, simply because it bears “directly” on the commerce and for no other reason, not only will there be a resurrection of Marshall’s “exclusive” idea, never prevailing after the Cooley case. The effect will be to knock down many types of state taxes held valid since that landmark decision.8
That consequence must follow if the presently asserted basis for decision is to be taken as a principle fit for general application and intended to be so used. We cannot assume that the Court intends it to be used otherwise, for that would be to make of it an arbitrary formula applied to dispose of the present case alone and having no validity for any other situation. But the ground relied upon is broad enough to include many other types of situation and of tax, and cannot be restricted logically or in reason to these narrow facts. If discrimination and real risk, in *263the sense of practical effect to clog or impede trade, are irrelevant to the validity of this type of tax, they are equally irrelevant to many others, unless sheer fiction and arbitrary distinction based on inconsequential factors are to be controlling. If the grounding which disregards them is adequate for disposing of this case, it is adequate also for disposing of many others involving it in which the Court has been at great pains to rest on other factors, unnecessarily it now would seem.
It will be appropriate, before turning to further consideration of the more pertinent decisions, to note the only basis upon which the Court grounds its ruling that “direct” state taxes on “the very process” of interstate commerce are void. This is because, in the words of the opinion, the commerce clause “by its own force created an area of trade free from interference by the States.” Although this is stated as grounding for the long-established conclusion that even without implementing legislation by Congress the clause is a limitation upon state power, it also is quite obviously the foundation of the further conclusion that “direct” taxes laid by the states within that area are outlawed regardless of any other factor than their direct incidence upon it.
II.
I agree that the commerce clause “of its own force” places restrictions upon state power to tax, as well as to regulate, interstate commerce. This has been held through various lines of decision extending back to Gibbons v. Ogden, 9 Wheat. 1, some of them unbroken.9 I also agree that this construction is consonant with the great purpose of the commerce clause to maintain our dis*264tinctively national trade free from state restrictions and barriers against it which the clause was adopted to prevent. But, at any rate since Cooley v. Board of Wardens, supra, this has not meant that the clause was intended to or could secure “by its own force” that vast area of commercial activity wholly free from “interference,” that is, from taxation and regulation, by the states.10 Nor for many years has it meant that the field of interstate commerce is to be free from such “interference,” simply because it is “direct” or has immediate incidence upon it.11 True, language frequently appears in the cases, especially the earlier ones, to the effect that “direct” taxation and regulation by the states are forbidden. But apart from its inconsistency with both language and results in other cases,12 in most of those where it has appeared there were other invalidating factors, such as singling out the commerce for special treatment, other types of discrimination, or failure to *265apportion where multiple state taxation could result if the tax were sustained.13
The fact is that “direct incidence” of a state tax or regulation, apart from the presence of such a factor, has long *266since been discarded as being in itself sufficient to outlaw state legislation. “Local” regulations, under the Cooley formula, bear directly on the commerce itself.14 But they are not outlawed for that reason. Calling them “incidental,” where this is done, does not make them “indirect,” except in judicial perspective. Police regulations bear no more indirectly or remotely upon the interstate commerce which must observe them than upon the local commerce falling equally within their incidence.
Again, an apportioned tax on interstate commerce is a “direct” tax bearing immediately upon it in incidence. But such a tax is not for that reason invalid. Decisions have sustained such taxes repeatedly, regardless of their direct bearing, provided the apportionment were fairly made and no other vitiating element were present, such as those above mentioned.15 It was this fact, without question, which the Court had in mind in the Adams case, when it carefully saved from its ban any question concerning such a tax as Indiana’s if properly apportioned in a situation like the ones presented there and now.16
*267III.
The language purporting to outlaw “direct” taxes because they are direct has appeared more frequently perhaps in relation to gross receipts taxes than any other, including both “direct” taxes, apportioned and unappor-tioned, and others considered “indirect” because purporting to be laid not “on the commerce itself” but upon some “local incident.” We have recently held that a tax having effects forbidden by the commerce clause will not be saved merely because it is cast in terms of bearing upon some “local incident.”17 As we then said, all interstate commerce takes place within the states and the consequences forbidden by the commerce clause cannot be achieved legally simply by the device of hooking the tax or other forbidden regulation to some selected “local incident.” That such a factor may be chosen for bearing the “direct” *268incidence of the tax may be a consideration to be taken into account in determining its validity. But it cannot validate a tax or regulation which produces the forbidden consequences, any more than a “direct tax” which does not produce them can be outlawed because it is direct. Not “directness” or “immediacy” of incidence per se, whether “upon the commerce itself” or upon a “local incident,” is the outlawing factor, but whether the tax, regardless of the special point of incidence, has the consequences for interstate trade intended to be outlawed by the commerce clause.
The difficulty of any other rule or approach is disclosed most clearly perhaps by contrasting the decision in American Mfg. Co. v. St. Louis, 250 U. S. 459, with the Adams decision and this one, in both of which efforts are made, unsuccessfully in my opinion, to distinguish the American case. There the tax was laid upon the manufacture, locally done, of goods sold locally and out of state. But the tax was “measured by” the gross receipts from sales of the goods manufactured, including those sold interstate.18
*269A tax upon a local privilege measured by the volume of gross receipts from both local and interstate trade19 would seem to have, in practical effect, the same consequences for blocking or impeding the commerce as one laid “directly” upon it, in any situation where no multiple levy is made, likewise in any where more than one state might find such a local privilege for pegging the tax.20 And a tax upon gross receipts “in lieu of” property or other taxes21 cannot be said either to be less “direct” in its incidence upon the commerce than the application of the Indiana tax now in issue or to afford protection against multiple levies the risk of which was held in Adams Mfg. Co. v. Storen to make the Indiana tax inherently vicious in that application.22
Unless we are to return to the formalism of another day, neither the “directness” of the incidence of a tax “upon the commerce itself” nor the fact that its incidence is manipulated to rest upon some “local incident” of the interstate transaction can be used as a criterion or, many times, as a consideration of first importance in determining the validity of a state tax bearing upon or affecting interstate commerce. Not the words “direct” and “indirect” or “local incident” can fulfill the function of judgment in deciding *270whether the tax brings the forbidden results. See the dissenting opinion of Mr. Justice Stone in Di Santo v. Pennsylvania, 273 U. S. 34, 44, quoted in note 11. That can be done only by taking account of the specific effects of state legislation the clause was intended to outlaw, and of the consequences actual or probable of the legislation called in question to create them.
IV.
Judgments of this character and magnitude cannot be made by labels or formulae. They require much more than pointing to a word. It is for this reason that increasingly with the years emphasis has been placed upon practical consequences and effects, either actual or threatened, of questioned legislation to block or impede interstate commerce or place it at practical disadvantage with the local trade.23 Formulae and adjectives have been retained at times in intermixture with the effective practical considerations. But proportionately the stress upon them has been greatly reduced, until the present decision; and the trend of recent decisions to sustain state taxes formerly regarded as invalid has been due in large part to this fact.
The commerce clause was not designed or intended to outlaw all state taxes bearing “directly” on interstate commerce. Its design was only to exclude those having the effects to block or impede it which called it and the Constitution itself into being. Not all state taxes, nor indeed all direct state taxes, can be said to produce those effects. On the other hand, many “indirect” forms of state taxation, that is, “indirect” as related to “incidence,” do in fact produce such consequences and for that reason are invalid.
*271It is for this reason that selection of a “local incident” for hanging the tax will not save it, if also the exaction does not in fact avoid the outlawed interferences with the free flow of commerce. Selection of a local incident for pegging the tax has two functions relevant to determination of its validity. One is to make plain that the state has sufficient factual connections with the transaction to comply with due process requirements.24 The other is to act as a safeguard, to some extent, against repetition of the same or a similar tax by another state.25 These matters are often interrelated, cf. Western Union Telegraph Co. v. Kansas, 216 U. S. 1, though in other situations they may be entirely separate. The important difference is between situations where it is essential to show minimal factual connections of the transaction with the taxing state in order to sustain the levy as against due process objections for “want of jurisdiction to tax”;26 and other situations where, although such connections clearly are present, the necessity is for showing that the tax, if sustained, will create a multiple tax load or other consequences having the forbidden effects.
This case is not one of the former sort. The transactions were as closely connected in fact with Indiana as with any other state.27 But the case is one of the latter *272type, that is, where, despite those connections, there were equally close and important ones in another state, New York; and therefore, as the Adams case declared, the risk of multiple state taxation would be incurred, unless one or the other or both states were forbidden to tax the transaction as such, or were required to apportion the tax. Not the “directness” of the tax in its bearing upon the commerce, but this danger is the crucial issue in this case, as it was in the Adams case. In other words, but for the possibility that more states than one would levy the same or a similar tax, such an application as was made of Indiana’s tax in the Adams case and here would be no more burdensome or objectionable than other applications of the same tax this Court has sustained or of other taxes likewise held valid.28
Y.
This Court in recent years has gone far in sustaining state taxes laid upon local incidents of interstate transactions by both the state of origin and the state of the mar*273ket.29 Perhaps it may be said, in view of such decisions, that it has more clearly sustained such taxes at the marketing end than by the state of origin,30 although this may be matter for debate. In any event, the factual connections of the taxing state with the interstate transaction in the cases where the tax has been sustained hardly can be regarded as greater or more important than those of Indiana with the transactions involved in the Adams case and here. Nor could it be shown in fact that in some of them, at any rate, the danger of multiple state taxation was appreciably less, if it be assumed that the forwarding state has the same power to tax the transaction, by pegging the tax upon a local incident, as has been recognized for the state of market.
Such taxes, whether in one state or the other, may in fact block or impede interstate commerce as much as, or more than, one placed directly upon the commerce itself. They have been sustained, nevertheless, not simply because of their bearing upon a local incident, but because in the circumstances of their application they were considered to have neither discriminatory effects upon interstate trade as compared with local commerce nor to impose upon it the blocking or impeding effects which the commerce clause was taken to forbid.31
*274This in my judgment is the appropriate criterion to be applied, rather than any mere question of “direct” or “indirect” incidence upon a “local incident.” The absence of any such connection with the taxing state is highly material.32 Its presence cannot be the controlling consideration for validating the tax. Nippert v. Richmond, 327 U. S. 416. In this view it would seem clear that the validity of such a tax as Indiana’s, applied to situations like those presented in the Adams case and now, should be determined by reference not merely to the “direct incidence” of the tax, but by whether those forbidden consequences would be produced, either through the actual incidence of multiple taxes laid by different states or by the threat of them, with resulting uncertainties producing the same impeding consequences.33
Thus, it is highly doubtful that the levy in this case, or in the Adams case, actually had any impeding effect whatever upon the transactions or the free flow interstate of such commerce.34 But the Adams case found the impediment in the assumption that if one state could tax, so also could the other, and in that event, a double burden would result for interstate commerce not borne by local *275trade. This danger, it was said, was inherent in the type of the tax, since it was not apportioned, and in consequence the tax as applied must fall.
The basic assumption was not true as a universally or even a generally resulting consequence, for two reasons. One is that it would not follow necessarily as a matter of fact that both states would tax or, if they did so, that the combined effects of the taxes would be either to clog or to impede the commerce.35 The other, it no more follows, as a matter of law, that because one state may tax the other may do likewise.
The Adams decision did not take account of any difference, as regards the risk of multiple state taxation, between situations where the multiple burden would actually or probably be incurred in fact and others in which no such risk would be involved. It rather disregarded such differences, so that “the risk of a double tax burden” on which the Court relied to invalidate the levy was not one actually, probably, or even doubtfully imposed in fact by another state.36 It rather was one which resulted only from an assumed, and an unexercised, power in that state to impose a similar tax.
The Court was not concerned with whether the forbidden consequences had been incurred in the particular situation or might not be incurred in others covered by its ruling. The motivating fear was more general. The *276ultimate risk which the Court sought to avoid was the danger that gross income or gross receipts tax legislation, without apportionment, might be widely adopted if the door were once opened and, if adopted and applied to interstate sales by all or many of the states, would result generally in bringing such sales within the incidence of multiple state taxation of that nature. Rather than incur this risk, with the anticipated consequent widespread creation of multiple levies, the Court in effect forestalled them at the source. Its action was prophylactic and the prophylaxis was made absolute.
By thus relieving interstate commerce from liability to pay taxes in either state, without any showing that both had laid them, the effect was, not simply to relieve that commerce from multiple burden, but to give it exemption from taxes all other trade must bear.37 Local trade was thus placed at disadvantage with interstate trade, by the amount of the tax, and the commerce clause thereby became a refuge for tax exemption, not simply a means of protection against unequal or undue taxation. Certainly its object was not to create for interstate trade such a specially privileged position.
But the alternatives to such a ruling were not themselves free from difficulty. They may be stated shortly. But preliminarily I accept the view, frequently declared,38 that a state runs afoul the commerce clause when it singles out interstate commerce for special taxation not applied to other trade or otherwise discriminates against it or treats it invidiously. Moreover, all other things being equal, *277multiple state taxation of gross receipts, although by nondiscriminatory taxes of general applicability, does compel the latter to bear a heavier tax burden than local trade in either state. The cumulative tax burden is in effect discriminatory, involving in any practical view the exact effects of a single discriminatory tax. Although the difference in total tax load may not be sufficient actually to block or impede the free flow of interstate trade,39 discrimination alone, without regard to showing of further consequences, has been held consistently to be sufficient for outlawing the tax.
This too I accept. For discrimination not only is ordinarily itself invidious treatment, but has an obvious tendency toward blocking or impeding the commerce, if not always the actual effect of doing so. Nor is the discriminatory tendency or effect lessened because it results from cumulation of tax burdens rather than from a single tax producing the same consequence. To allow both states to tax “to the fullest extent” would produce the invidious sort of barrier or impediment the commerce clause was designed to stop. But the bare unexercised power of another state to tax does not produce such results. It only opens the way for them to be produced. This danger is not fanciful but real, more especially in a time when new sources of revenue constantly are being sought. Accordingly, I agree that this door should not be opened.
But it is not necessary to go as far as the Adams case went, or as the decision now rendered goes, in order to prevent the anticipated deluge. There is no need to give interstate commerce a haven of refuge from taxation, albeit of gross receipts or from “direct” incidence, in order *278to safeguard it from evils against which the commerce clause is designedly protective. Less broad and absolute alternatives are available and are adequate for the purpose of protection without creating the evils of total exemption.
The alternative methods available for avoiding the multiple state tax burden may now be stated. They are: (1) To apply the Adams ruling, stopping such taxes at the source, unless the tax is apportioned, thus eliminating the cumulative burdens;40 (2) To rule that either the state of origin or the state of market, but not both, can levy the exaction; (3) To determine factually in each case whether application of the tax can be made by one state without incurring actual danger of its being made in another or the risk of real uncertainty whether in fact it will be so made.
The Adams solution is not unobjectionable, for reasons already set forth. To deprive either state, whether of origin or of market, of the power to lay the tax, permitting the other to do so, has the vice of allowing one state to tax but denying this power to the other when neither may be as much affected by the deprivation as would be the one allowed to tax and, in any event, both may have equal or substantial due process connections with the transaction. The solution by factual determination in particular cases of the actual or probable incidence of both taxes is open to two objections. One is that to some extent it would make the taxing power of one or both states depend upon whether the other had exercised, or probably would *279exercise, the same power. The other would lie in the volume of litigation such a rule would incite and the difficulties, in some cases at least, of making the factual determination.
VI.
The problem of multiple state taxation, absent other factors making for prohibition, is therefore one of choosing among evils. There is no ideal solution. To leave the matter to Congress, allowing both states to tax “to the fullest extent” until it intervenes, would run counter not only to the long-established rules requiring apportionment where incidence of multiple taxes would be likely, but also in substance and effect to those forbidding discrimination, without the consent of Congress, cf. Prudential Ins. Co. v. Benjamin, 328 U. S. 408, as well as the long-settled rule that the clause is “of its own force” a prohibition upon the states. To require factual determination of forbidden effects in each case would be to invite costly litigation, make decision turn in some cases, perhaps many, on doubtful facts or conclusions, and encourage the enactment of legislation involving those consequences. The Adams ruling, as I have said, creates for many situations a tax refuge for interstate commerce and does this in both states.
As among the various possibilities, I think the solution most nearly in accord with the commerce clause, at once most consistent with its purpose and least objectionable for producing either evils it had no design to bring or practical difficulties in administration, would be to vest the power to tax in the state of the market, subject to power in the forwarding state also to tax by allowing credit to the full amount of any tax paid or due at the destination. This too is more nearly consonant with what the more recent decisions have allowed, if full account is taken of their effects.
*280In McLeod v. Dilworth Co., 322 U. S. 327, 361, I have set forth the reasons leading to this conclusion.41 It may be added that such a result would avoid altogether the undesirable features of factual determination in each case; would prevent the multiple and, in effect, discriminatory burden which would follow from allowing both states to tax until Congress should intervene; and would reduce by half, at least, the tax refuge created by the Adams ruling, without incurring other outlawed effects.
It is true this view logically would deny the state of origin power to tax, notwithstanding its adequate due process connections, except by giving credit for taxes due at the destination.42 But the forwarding state has no greater power under the Adams ruling and none at all under the present one if it is to be applied consistently and, as I think, this can be taken to outlaw both unapportioned and apportioned taxes.
I have no doubt that under the law prevailing until now this tax would have been sustained, if apportioned, under the Adams decision and others.43 Nor have I any question that such a tax laid by New York would be upheld under *281those decisions. Indeed, in my opinion, the necessary effect of McGoldrick v. Berwind-White Co., 309 U. S. 33, as appellee asserts, is to sustain power in the state of the market to tax “to the fullest extent” without apportionment by nondiscriminatory taxes of general applicability, transactions essentially no different from the ones involved in this case and in the Adams case.
It is true the Berwind-White case purported to distinguish the Adams case. But it did so by pointing out that the New York tax was “conditioned upon a local activity, delivery of goods within the state upon their purchase for consumption” and that “the effect of the tax, even though measured by the sales price, as has been shown, neither discriminates against nor obstructs interstate commerce more than numerous other state taxes which have repeatedly been sustained as involving no prohibited regulation of interstate commerce.” 309 U. S. 33,58.
This comes down to sustaining the tax, as was done in American Mfg. Co. v. St. Louis, supra, relied upon to distinguish the Adams case, simply because the tax was pegged upon the “local incident” of delivery. Apart from the reasons I have set forth above for regarding this as not being controlling, that basis was flatly repudiated in Nippert v. Richmond, 327 U. S. 416, as adequate for sustaining a tax having otherwise the forbidden effects and features. So here, in my opinion, it is hardly adequate to distinguish the Adams case, leaving it unimpaired, or to differentiate consistently the broader ruling made in this case.
I therefore agree with the appellee that the effect of the Berwind-White ruling was in substance, though not in words, to qualify the Adams decision, and that the combined effect of the two cases, taken together, was to permit the state of the market to tax the interstate transaction, *282but to deny this power to the forwarding state, unless by credit or otherwise it should make provision for apportionment. See Powell, New Light on Gross Receipts Taxes (1940) 63 Harv. L. Rev. 909, 939. Whether or not such a provision would save the Indiana tax as now applied, in view of what I think was the effect of Berwind-White on any basis other than sheer formalism, need not now be considered.44
Whether or not acknowledgment of this effect of the Berwind-White decision would require reconsideration of the validity of apportioned taxes otherwise than by full credit, laid by the forwarding state,45 neither that fact nor the effect of Berwind-White in qualifying the Adams ruling justifies the broader ruling now made to reach the same result as the Adams case reached. The trend of recent decisions has been toward sustaining state taxes formerly regarded as outlawed by the commerce clause. The present decision, by its reversion to the formal and discarded grounding in the “direct incidence” of the tax, is a reversal of that trend. It is one, moreover, unnecessary for sustaining the result the Court has reached. Its consequence, if followed in logical application to apportioned taxes, will be to outlaw them, for they bear as “directly” on “the commerce itself” as does the tax now stricken down in its *283present application. So also does the type of tax sustained in the Berwind-White case, in everything but verbalism.
I think the result now reached is justified, as necessary to prevent the cumulative and therefore discriminatory tax burden which would rest on or seriously threaten interstate commerce if more than one state is allowed to impose the tax, as does Indiana, upon the gross receipts from the sale without apportionment or credit for taxes validly imposed elsewhere. This result would follow in view of the Berwind-White decision and others like it,46 if not only the state of the market but also the forwarding state could tax the sale “to the fullest extent” upon the gross receipts. For this reason I concur in the result.
But in doing so I dissent from grounding the decision upon a foundation which not only will outlaw properly apportioned taxes, thus going beyond the Adams decision, unless the Court is merely to reiterate the rule forbidding “direct” taxation of interstate sales only to recall it when a case involving a properly apportioned tax shall arise; but also will require outlawing many other types of tax heretofore sustained, unless a similar retreat is made.

 The Court added: “We have repeatedly held that such a tax is a regulation of, and a burden upon, interstate commerce prohibited by Article I, § 8 of the Constitution. The opinion of the State Supreme Court stresses the generality and nondiscriminatory character of the exaction, but it is settled that this will not save the tax if it directly burdens interstate commerce.” 304 U. S. 307, 311-312. Cf. notes 5 and 16.

 The only factual difference is that here the sales were of securities, there of goods. It was this upon which Indiana has relied to distinguish the Adams case, asserting originally that it gave domiciliary foundation for sustaining the tax. This claim disappeared, in effect, at the second oral argument, and the Court does not rest on it. I agree that, for present purposes, sales of intangibles should be treated identically with sales of goods.

 See, e. g. Pullman’s Palace Car Co. v. Pennsylvania, 141 U. S. 18; Cudahy Packing Co. v. Minnesota, 246 U. S. 450; U. S. Express Co. v. Minnesota, 223 U. S. 335. And see especially discussion in Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 255-257.

 Compare the opinion of Me. Justice Frankfurter in Northwest Airlines v. Minnesota, 322 U. S. 292.

 As the Court says, “An exaction by a State from interstate commerce falls not because of a proven increase in the cost of the product. What makes the tax invalid is the fact that there is interference by a State with the freedom of interstate commerce.” The only “interference” held to be important is the direct incidence of the tax on the commerce, not the double burden or risk of it. Cf. notes 1 and 16.

 See e. g. Ribble, State and National Power Over Commerce (1937) 204; Dowling, Interstate Commerce and State Power (1940) 27 Va. L. Rev. 1, 3-10. See also Frankfurter, The Commerce Clause (1937) 53: “Had Marshall’s theory of the 'dormant’ commerce power prevailed, the taxable resources of the states would have been greatly confined. The full implications of his theory, if logically pursued, might well have profoundly altered the relations between the states and the central government.”

 See note 6. See also Wechsler, Stone and the Constitution (1946) 46 Col. L. Rev. 764,785, quoted in note 10 infra.

 Cf. text infra at notes 14 to 16, also 21, and authorities cited.

 See e. g., Robbins v. Shelby County Taxing District, 120 U. S. 489;. Real Silk Hosiery Mills v. Portland, 268 U. S. 325; Nippert v. Richmond, 327 U. S. 416, and authorities cited.

 See Ribble, supra, at 72 ff.; Frankfurter, supra, at 24, 56; Wechsler, Stone and the Constitution (1946) 46 Col. L. Rev. 764, 785: “It will summarize his basic conception to say that as the issues were framed in the long debate the position taken by the Court in Cooley v. Board of Wardens comes closest to according with his thought.”

 “Experience has taught that the opposing demands that the commerce shall bear its share of local taxation, and that it shall not, on the other hand, be subjected to multiple tax burdens merely because it is interstate commerce, are not capable of reconciliation by resort to the syllogism. Practical rather than logical distinctions must be sought.” Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 259. See also the dissenting opinion of Mr. Justice Stone in Di Santo v. Pennsylvania, 273 U. S. 34, 44 (overruled by California v. Thompson, 313 U. S. 109), “In thus making use of the expressions, 'direct’ and ‘indirect interference’ with commerce, we are doing little more than using labels to describe a result rather than any trustworthy formula by which it is reached.”

 See, e. g., McGoldrick v. Berwind-White Coal Mining Co., 309 U. S. 33; Gwin, White & Prince v. Henneford, 305 U. S. 434; Nippert v. Richmond, 327 U. S. 416.

 Gross receipts taxes which have been sustained fall into the following groups: (a) Those which were fairly apportioned. See, e. g., Illinois Cent. R. v. Minnesota, 309 U. S. 157; Pullman’s Palace Car Co. v. Pennsylvania, 141 U. S. 18; Wisconsin & Michigan Ry. v. Powers, 191 U. S. 379; U. S. Express Co. v. Minnesota, 223 U. S. 335; Ficklen v. Taxing District, 145 U. S. 1. (b) Those which have been justified on a “local incidence” theory. See, e. g., Western Live Stock v. Bureau of Revenue, 303 U. S. 250, with which compare Fisher’s Blend Station v. Tax Comm’n, 297 U. S. 650; McGoldrick v. Berwind-White Coal Mining Co., 309 U. S. 33; American Mfg. Co. v. St. Louis, 250 U. S. 459. See also cases cited in note 21. In many eases apportioned gross receipts taxes have been sustained not on the ground that they were apportioned but that they were local in nature. See, e. g., Maine v. Grand Trunk Ry., 142 U. S. 217; New York, L. E. & W. R. Co. v. Pennsylvania, 158 U. S. 431; Wisconsin & Michigan Ry. v. Powers, supra; U. S. Express Co. v. Minnesota, supra.
Gross receipts taxes which have not been sustained fall into the following groups: (a) Those which were not fairly apportioned. See, e. g., Oklahoma v. Wells Fargo Co., 223 U. S. 298. (b) Those which were not apportioned and subjected interstate commerce to the risk of multiple taxation. Philadelphia & So. S. S. Co. v. Pennsylvania, 122 U. S. 326; Ratterman v. Western Union Telegraph Co., 127 U. S. 411; Western Union Telegraph Co. v. Alabama, 132 U. S. 472; Adams Mfg. Co. v. Storen, 304 U. S. 307; Gwin, White & Prince v. Henneford, 305 U. S. 434, 439. Cf. Fargo v. Michigan, 121 U. S. 230, as-explained in Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 256. (c) Those in which there was a discriminatory element in that they were directed exclusively “at transportation and communication,” Lockhart, Gross Receipts Taxes on Transportation (1943) 57 Harv. L. Rev. 40, 65-66. Galveston, H. & S. A. Ry. v. Texas, 210 U. S. 217, and cf. New Jersey Tel. Co. v. Tax Board, 280 U. S. 338. But see Nashville, C. & St. L. Ry. v. Browning, 310 U. S. 362. In both the Galveston and New Jersey Telephone Company cases, although the taxable events all occurred within the taxing state, the possibility of multiple taxation was nevertheless present, (d) Those in which there *266was no discrimination but a possible multiple burden. Fisher’s Blend Station v. Tax Comm’n, supra, as explained in Western Live Stock v. Bureau of Revenue, 303 U. S. at 260-261. (e) Those in which there was no discrimination, no apportionment and no possibility of multiple burden. Puget Sound Stevedoring Co. v. Tax Commission, 302 U. S. 90. This decision, it may be noted, might have been rested upon the clause of the Constitution forbidding the states to tax exports. Cf. Richfield Oil Corp. v. State Board, 329 U. S. 69.

 Cf. California v. Thompson, 313 U. S. 109; Union Brokerage Co. v. Jensen, 322 U. S. 202; Robertson v. California, 328 U. S. 440. Indeed, sometimes police regulations bear more heavily on interstate commerce. Cf. Robertson v. California, supra, and cases cited at note 28 therein.

 See cases cited in note 13, supra.

 The Court said, in answer to the Indiana Supreme Court’s emphasis upon the “generality and nondiseriminatory character” of the levy, “but it is settled that this will not save the tax if it directly burdens interstate commerce.” 304 U. S. at 312; cf. note 1, supra. The same statement is now made in this case not to support the *267conclusion that these features cannot save a tax where the risk of multiple state taxation would outlaw it, as in the Adams case, but to support the vastly broader grounding that the tax is invalid simply because it is “direct” in its incidence. The quoted Adams statement had no such significance, as appears not only from its immediate context but also from the further statement, made apropos of American Mfg. Co. v. St. Louis, 250 U. S. 459, in an effort to distinguish it: “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 to receipts from sales interstate.” (Emphasis added.) 304 U. S. at 314. Not “direct” taxation simply, but taxing the entire proceeds without apportionment in the face of threatened or possible multiple state taxation was the “direct burden” found and outlawed in the Adams case.

 “If the only thing necessary to sustain a state tax bearing upon interstate commerce were to discover some local incident which might be regarded as separate and distinct from ‘the transportation or intercourse which is’ the commerce itself and then to lay the tax on that incident, all interstate commerce could be subjected to state taxation and without regard to the substantial economic effects of the tax upon the commerce.” Nippert v. Richmond, 327 U. S. 416, 423.

 To say that this was not in substance a tax on gross receipts, because sales in St. Louis of goods made elsewhere were not taken into account in measuring the tax, is simply to ignore the fact that the tax did include all interstate sales of goods manufactured and all returns from them. That the local sales of goods brought in from other states were excepted does not mean either that those sales were interstate transactions (which it was not necessary to decide in view of their exemption) or that the sales out of state included in the measure were not interstate transactions; or that they were not, in substantial effect, taxed upon their gross returns by the measure, notwithstanding the tax was made legally to fall upon the privilege of manufacturing.
The Adams decision purported to distinguish American Mfg. Co. v. St. Louis simply on the ground that the tax was not one laid on the taxpayer’s sales or the income derived from them, but was a license fee for engaging in the manufacture which could be measured “by the sales price of the goods produced rather than by their value at the date of manufacture.”

 In addition to American Mfg. Co. v. St. Louis, 250 U. S. 459, see Oliver Iron Co. v. Lord, 262 U. S. 172; Hope Natural Gas Co. v. Hall, 274 U. S. 284; Utah Power & Light Co. v. Pfost, 286 U. S. 165.

 Cf. Galveston, H. & S.A.R. Co. v. Texas, 210 ü. S. 217, 227; Morrison, State Taxation of Interstate Commerce (1942) 36 Ill. L. Rev. 727, 738.

 See Postal Telegraph Cable Co. v. Adams, 155 U. S. 688; U. S. Express Co. v. Minnesota, 223 U. S. 335; Pullman Co. v. Richardson, 261 U. S. 330. See also discussion in Galveston, H. & S. A. R. Co. v. Texas, 210 U. S. 217, 226-227.

 This is true, though concededly such a tax might work to prevent cumulative or higher tax burdens imposed by a single taxing state. Cf. Lockhart, Gross Receipts Taxes on Interstate Transportation and Communication (1943) 57 Harv. L. Rev. 40.

 See Nippert v. Richmond, 327 U. S. 416; Best & Co. v. Maxwell, 311 U. S. 454. Cf. Prudential Ins. Co. v. Benjamin, 328 U. S. 408. See also Wechsler, Stone and the Constitution (1946) 46 Col. L. Rev. 764, 785-787.

 See dissenting opinion in McLeod v. Dilworth Co., 322 U. S. 327, at 356-357. See also Wisconsin v. J. C. Penney Co., 311 U. S. 435, 444-445.

 See McNamara, Jurisdictional and Interstate Commerce Problems in the Imposition of Excises on Sales (1941) 8 Law & Contemp. Prob. 482, 491. Compare the discussion of a proposed federal statute to give the buyer’s state the right to impose nondiscriminatory sales taxes. Proc. 27th Ann. Conf. Nat. Tax Assn. (1934) 136-160. See also Perkins, The Sales Tax and Transactions in Interstate Commerce (1934) 12 N. C. L. Rev. 99.

 Cf. note 25.

 Indiana was the state by whose law the trust was created. It was the situs of the trust’s administration. It was the place where the *272securities were kept prior to mailing for delivery in accordance with the terms of their sale. Cf. Curry v. McCanless, 307 U. S. 357. The directions for sale were given there. The proceeds were forwarded to Indiana and there received into the corpus of the trust. The state’s connections with the trust, and with the property which was the subject of the sale, more than satisfy any due process requirement for exercise of the power to tax either the property or transactions relating to its disposition taking place as largely within Indiana’s borders as did the sales in this case.

 The cases, aside from Adams Mfg. Co. v. Storen, 304 U. S. 307, which involve the Indiana gross receipts tax are: Department of Treasury v. Wood Preserving Corp., 313 U. S. 62; Department of Treasury v. Ingram-Richardson Mfg. Co., 313 U. S. 252; International Harvester Co. v. Dept. of Treasury, 322 U. S. 340; Ford Motor Co. v. Dept. of Treasury, 323 U. S. 459. See also General Trading Co. v. State Tax Commission, 322 U. S. 335; cf. Northwest Airlines v. Minnesota, 322 U. S. 292.

 See, e. g., McGoldrick v. Berwind-White Co., 309 U. S. 33; Nelson v. Sears, Roebuck & Co., 312 U. S. 359; General Trading Co. v. Tax Commission, 322 U. S. 335; Western Live Stock v. Bureau of Revenue, 303 U. S. 250; Coverdale v. Arkansas-Louisiana Pipe Line Co., 303 U. S. 604; Department of Treasury v. Ingram-Richardson Mfg. Co., 313 U. S. 252.

 Compare McGoldrick v. Berwind-White Co., 309 U. S. 33, with McLeod v. Dilworth Co., 322 U. S. 327. See Powell, New Light on Gross Receipts Taxes (1940) 53 Harv. L. Rev. 909.

 See McGoldrick v. Berwind-White Co., 309 U. S. 33, 58, quoted infra Part VI.

 As a matter of minimal due process requirements. Cf. text infra at notes 24 to 27.

 The danger of an impending burden or barrier from multiple state taxation could be real and substantial in a particular case if the threat of such taxation were actual or probable or if its threatened incidence were involved in such actual uncertainty that this uncertainty itself would constitute, in practical effect, a substantial clog.

 The Indiana tax was only one per cent of the proceeds of the sales. The record indicates, too, that the New York Stock Transfer tax was collected from the proceeds of the sale in New York. The amount of the tax was three cents per share sold for less than twenty dollars, and four cents per share sold for more than twenty dollars. Tax Law §§ 270, 270a; O’Kane v. New York, 283 N. Y. 439, 28 N. E. 2d 905. The tax did not apply to the transfer of bonds. Cf. Op. Atty. Gen. N. Y. 1939, p. 208.

 Cf. note 31. Whether such a tax would in fact produce the forbidden results or not would depend upon the incidence or likelihood of the incidence of a like tax in the other, or another, jurisdiction having similar power. Frequently this likelihood will be, in fact, either nil or small.

 The opinion discloses no consideration of any question or suggestion whether a like or other tax had been or was likely to be imposed by the state of destination, or even that such a tax by that state was doubtfully incident. Such an inquiry would have been inconsistent with the Court’s thesis.

 It is assumed, of course, that a nondiscriminatory tax of general applicability laid by the taxing state would be involved.

 See Best & Co. v. Maxwell, 311 U. S. 454; Hale v. Bimco Trading Co., 306 U. S. 375; Guy v. Baltimore, 100 U. S. 434; Webber v. Virginia, 103 U. S. 344; Welton v. Missouri, 91 U. S. 275; Voight v. Wright, 141 U. S. 62; Brimmer v. Rebman, 138 U. S. 78.

 For a variety of reasons, among which might be the larger capacity of such trade to absorb the difference, by reason of greater volume, without sustaining loss of profit, in the particular sort of commerce or type of transaction. See also note 34.

 The Adams decision, of course, made no direct ruling upon an actual tax laid by the state of destination. But the basic premise of its rationalization would be altogether without substance if it were taken to mean that such a tax could be levied there without meeting the same barrier, and for the same, reason, as the tax levied by Indiana, the state of origin, encountered.

 “If in this case it were necessary to choose between the state of origin and that of market for the exercise of exclusive power to tax, or for requiring allowance of credit in order to avoid the cumulative burden, in my opinion the choice should lie in favor of the state of market rather than the state of origin. The former is the state where the goods must come in competition with those sold locally. It is the one where the burden of the tax necessarily will fall equally on both classes of trade. To choose the tax of the state of origin presents at least some possibilities that the burden it imposes on its local trade, with which the interstate traffic does not compete, at any rate directly, will be heavier than that placed by the consuming state on its local business of the same character.”

 Credit allowed for taxes paid elsewhere, see Henneford v. Silas Mason Co., 300 U. S. 577; General Trading Co. v. Tax Commission, 322 U. S. 335, is a form of apportionment, though not the only one.

 See also Gwin, White & Prince v. Henneford, 305 U. S. 434.

 It is obvious that an apportioned tax laid by the forwarding state, taken in conjunction with an unapportioned one levied by the state of the market, would produce the effect of multiple state levies to the extent of the apportioned tax unless the apportionment were made by giving full credit for the other tax. In the latter event, of course, there would be no effect of multiple burden in the sense forbidden by the rule requiring apportionment and sustaining properly apportioned taxes. In the absence of a credit to the full amount of the marketing state's tax, the apportioned tax of the forwarding state, although making a cumulative burden, would impose only a reduced one as compared with an unapportioned tax by that state.

 Cf. note 44.

 See the “use tax” cases: General Trading Co. v. Tax Commission, 322 U. S. 335; Felt & Tarrant Mfg. Co. v. Gallagher, 306 U. S. 62; Nelson v. Sears, Roebuck & Co., 312 U. S. 359; Nelson v. Montgomery Ward & Co., 312 U. S. 373. See also Jagels v. Taylor, 309 U. S. 619, discussed in McNamara, supra, note 25, at 487.