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property and business within the state and to pay a license tax thereon, is uncon-
stitutional.^^

Tax on Corporate Stock. — Taxation of shares in foreign corporations owned
by citizens under Burns' Ann. St. Ind. 1908, §§ 10,143, 10,233, 10,234, while
shares in domestic corporations are only taxable when property of the corpora-
tion is not exempt, does not violate commerce clause of the constitution.-^^

Fees for Filing Charter. — The fee imposed on corporations for filing arti-
cles, which they must file before they can be deemed legally incorporated or con-
solidated, is not a tax on interstate commerce, though they be engaged in such
business, but on the right to exist as a corporation. ^^ A foreign corporation,
though engaged in interstate trade, may, before being permitted to do business
in the state, be required to comply with such reasonable conditions as are con-
tained in a state statute, requiring the filing of its charter, the payment of charter
fees, the making of reports and furnishing any information concerning its busi-
ness, the appointment of agents to receive service of process, etc.^*^



Co., 127 U. S. 117, 32 L. Ed. 94, 8 S. Ct.
1037.

In the case of Marye v. Baltimore, etc.,
R. Co., 127 U. S. 117, 32 L. Ed. 94, 8 S.
Ct. 1037, the question was whether a rail-
road company incorporated by the state
of Maryland, and no part of whose own
railroad was within the state of Virginia,
was taxable under general laws of Vir-
ginia upon rolling stock owned by the
company, and employed upon connecting
railroads leased by it in that state, yet
not assigned permanently to those roads,
but used interchangeably upon them and
upon roads in other states, as the com-
pany's necessities required. It was held
not to be so taxable, solely because the
tax laws of Virginia appeared upon their
face to be limited to railroad corporations
of that state. Pullman's Palace Car Co.
V. Pennsylvania, 141 U. S. 18, 35 L. Ed.
013, 11 S. Ct. 876.

49. Marye v. Baltimore, etc., R. Co., 127
U. S. 117, 32 L. Ed. 94, 8 S. Ct. 1037;
Pullman's Palace Car Co. v. Pennsylvania,
141 U. S. 18, 35 L. Ed. 613, 11 S. Ct. 876.

50. American Refrigerator Trans. Co. v.
II all. 174 U. S. 70, 43 L. Ed. 899, 19 S.
Ct. 599; Union Refrigerator Trans. Co. v.
Lynch, 177 U. S. 149, 44 L. Ed. 708, 20
S. Ct. 031.

51. American Refrigerator Trans. Co. v.



Hall, 174 U. S. 70, 43 L. Ed. 899, 19 S.
Ct. 599; Union Refrigerator Trans. Co. v.
Lynch, 177 U. S. 149, 44 L. Ed. 708, 20
S. Ct. 631; Marye v. Baltimore, etc., R.
Co., 127 U. S. 117, 32 L. Ed. 94, 8 S. Ct.
1037; Pullman's Palace Car Co. v. Penn-
sylvania, 141 U. S. 18, 35 L. Ed. 613, 11
S. Ct. 876.

52. Fargo v. Auditor General, 57 Mich.
598, 24 N. W. 538.

53. Engaged in interstate commerce. —
International Text-Book Co. v. Gillespie,
229 Mo. 397, 129 S. W. 922.

54. Tax on corporate stock. — Darnell v.
Indiana, 33 S. Ct. 120, 226 U. S. 390, 57
L. Ed. 267, affirming judgment Darnell v.
State, 90 N. E. 769, 174 Ind. 143.

55. Fees for filing charter. — Chicago,
etc., R. Co. V. State, 51 N. E. 924, 153
Ind. 134.

56. State v. American Book Co., 69 Pac.
563, 05 Kan. 847, dismissed American
Book Co. V. Kansas, 24 S. Ct. 394, 193 U.
S. 49, 48 L. Ed. 613.

St. 1903, pp. 447, 450, c. 437, §§ 66, 67,
75, requiring every foreign corporation of
the classes described in § 58 (page 443)
aniuially to file in the office of the secre-
tary of the commonwealth a certificate
of certain facts, and to pay an excise tax
assessed on its capital stock by the tax



§ 3948



CARRIERS.



3558



§ 3948. Tax on Gross Receipts. — The constitutionality of the taxation by
a state of the gross earnings of railroad companies derived from interstate com-
merce, has been upheld. •""'" In a case where the corporation was created by that
state and had the situs of its business within that state, and wher.e the receipts
had become intermingled with the general property of the carrier.-'''^ However,
a subsequent case questions the correctness of the above statement and holds that



commissioner, pursuant to Const, c. 1,
§ 1, art. 4, and § 58, including every for-
eign corporation which has a usual place
of business in Massachusetts, or which is
engaged, permanently or temporarily, and
with or without a usual place of business
therein, in the construction, erection, al-
teration, or repair of a building, bridge,
railroad, railway, or construction of any
kind, are constitutional, and enforceable
as applicable to a corporation engaged in
interstate commerce, which has, at the
same time, a place of business in the state
for domestic purposes, since, though
broad enough to include corporations en-
gaged exclusively in interstate commerce,
the legislative intention will not be pre-
sumed to include corporations whose
usual places of business are established
and maintained solely for use in inter-
state commerce. Attorney General v.
Electric Storage Battery Co., 74 N. E.
467, 188 Mass. 239.

57. Gross receipts. — State Tax on
Railway Gross Receipts (U. S.), 15
Wall. 284, 21 L. Ed. 164: Delaware Rail-
road Tax (U. S.), 18 Wall. 206, 21 L.
Ed. 888. See Rutland R. Co. v. Central
Vermont R. Co., 159 U. S. 630, 40 L.
Ed. 284, 16 S. Ct. 113.

A statute of a state imposing a tax
upon the gross receipts of railroad com-
panies is not repugnant to Const., art.
1, § 8, subd. 3, providing for the regula-
tion of commerce with foreign nations
and among the several states, though the
grors receipts are made up in part from
freights received for the transportation
of merchandise from the state to an-
other, or into the state from another.
State Tax on Railway Gross Receipts
(U. S.), 15 Wall. 284, 21 L. Ed. 164.

Act June 7, 1879, § 7 (P. L. 116), im-
posing a tax upon the receipts of rail-
way and transportation companies, is in
violation of the constitution of the United
States, art. 1, § 8, providing that con-
gress shall have power to regulate com-
merce between the states, so far as it
levies a tax upon receipts derived from
commerce between points within and
points without the state, and between
points without the state but passing
through it; and it is immaterial that
goods destined for points without the
state were temporarily detained in the
state after transportation had actually
begun. Delaware, etc., Canal Co. v. Com-
monwealth (Pa.), 1 Monag. 36, 17 Atl.
175. 1 L. R. A. 232.

Ohio Act May 31, 1911 (102 Ohio
Laws, pp. 224-260), imposing an excise



tax based on gross intrastate earnings
of railroads and other public utilities, be-
ing by express limitation levied on in-
trastate earnings only, is not unconsti-
tutional, as imposing a burden on inter-
state commerce. Ohio River, etc., R. Co.
V. Dittey, 203 Fed. 537.

Fuel used in operating railroad. — Act
Okl. May 26, 190S, §§ 2, 3, and 6 as
amended by Act March 27, 1909, being
Comp. Laws Okl. 1909, §§ 7702, 7703,
7706, imposing a gross revenue tax on
mineral production in the state, is not
invalid as imposing a burden on inter-
state commerce as applied to coal mined
by a railroad company and used in the
operation of interstate trains. Missouri,
etc., R. Co. V. Meyer, 204 Fed. 140.

58. Corporation created by state. — -
State Tax on Railway Gross Receipts (U.
S.). 15 Wall. 284, 21 L. Ed. 164; Fargo
V. Michigan, 121 U. S. 230, 30 L. Ed.
888, 7 S. Ct. 857.

In the case of State Tax on Railway
Gross Receipts (U. S.), 15 Wall. 284, 21
L. Ed. 164, an act of the legislature of
Pennsylvania which declared that: "In
addition to the taxes now provided by
law, every railroad, canal, and transpor-
tation company incorporated under the
laws of this commonwealth, and not lia-
ble to the tax upon income under exist-
ing laws, shall pay to the commonwealth
a tax of three-fourths of one per centum
upon the gross receipts of said com-
pany; the said tax shall be paid semian-
nually upon the first days of July and
January, commencing on the first day
of July, 1886," was held to be valid. The
grounds upon which it was based were
that the corporation, being a creation of
the legislature of Pennsylvania and hold-
ing and enjoying all its franchises under
the authority of that state, the tax was
upon the franchises which it derived
from the state, and was for that reason
within the power of the state, and that,
in determining the mode in which the
state could tax the franchises which it
had conferred, it was not limited to a
fixed sum upon the value of them, but
it could be graduated by and propor-
tioned to •'lither the value of the privi-
leges granted, or the extent or results of
their exercise. "Very manifestly," said
the court, "it is a tax upon the railroad
company, measured in amount by the ex-
tent of its business, or the degree to
which its franchise is exercised." Fargo
V. Michigan, 121 U. S. 230, 30 L. Ed.
888, 7 S. Ct. 857.



3559



TAXATION.



§ 3948



a state can not constitutionally impose upon a steamship company incorporated
under its law a tax upon the gross receipts of such company, which are derived
from the transportation of persons and property by sea, between different states,
and to and from foreign countries, as such tax amounted to a regulation of in-
terstate and foreign commerce. ^^ And it has been held that a statute levying a
tax upon the gross receipts of a carrier for the carriage of freights and passen-
gers into, out of, or through the state, affects a matter national in its character,
requiring uniformity of regulation, and therefore to be invalid, though not in
conflict with any regulation prescribed by congress, but here none of the qualities
of the preceding cases appeared ; the corporation had never been organized or
acknowledged as a corporation of the state, and the receipts for carriage had
probably never been within the state.'^'^'

Gross Receipts of Intrastate Business. — A statute authorizing a city to
levy on every railroad company doing business or having an office in the city a
license tax not to exceed one per cent of the gross receipts of its business, being
invalid as against a railroad whose business extends to points out of the state, as a
regulation of interstate commerce, a tax levied thereunder is invalid, though it
is limited to business of the railroad done within the state. ^^

Where Railroad Partly within State. — A state statute which required
every corporation, person, or association operating a railroad within the state
to pay an annual tax, to be determined by the amount of its gross transportation
receipts, and which further provides that, when applied to a railroad lying partly
within and partly without the state, or to one operated as a part of a line or
system extendmg beyond the state, the tax shall be equal to the proportion of
the gross receipts in the state, to be ascertained in the manner provided by the
statute, does not conflict with the constitution of the United States, but it is a
regulation within the power of the state. The reference by the statute to the
transportation receipts and to a certain percentage of the same, in determining
the amount of the excise tax, was simply to ascertain the value of the business
done by the corporation, and thus obtain a guide to a reasonable conclusion as
to the amount of the excise tax which should be levied.*''-



59. Cases denying right of state. —

Philadelphia, etc.. Steamship Co. v. Penn-
sylvania, 122 U. S. 326, 30 L. Ed. 1200,
7 S. Ct. 1118. See, also. Maine v. Grand
Trunk R. Co.. 142 U. S. 217, 35 L. Ed.
994. 12 S. Ct. 121; Rutland R. Co. v. Cen-
tral Vermont R. Co., 159 U. S. 630, 40
L. Ed. 284, 16 S. Ct. 113.

"In Philadelphia, etc., Steamship Co.
V. Pennsylvania, 122 U. S. 326, 30 L. Ed.
1200. 7 S. Ct. 1118, it was decided that
a tax upon the gross receipts of a steam-
ship corporation of the state, when such
receipts were derived from commerce
between the states and with foreign coun-
tries, was unconstitutional. We regard
this decision as unshaken and as stating
established law. It cites the earlier cases
to the same effect. Later ones are Rat-
terman v. Western Union Tel. Co., 127
U. S. 411, 32 L. Ed. 229, 8 S. Ct. 1127;
Western Union Tel. Co. v. Pennsylvania,
128 U. S. 39, 32 L. Ed. 345. 9 S. Ct. 6;
Western Union Tel. Co. v. Ala1)ama State
Board. 132 U. S. 472, 33 L. Ed. 409, 10 S.
Ct. 161. See, also, Pullman's Palace Car
Co. V. Pennsylvania. 141 U. S. 18, 35 L.
Ed. 613. 11 S. Ct. 876; Eicklen v. Taxing
Dist., 145 U. S. 1, 36 L. Ed. 601, 21 S.
Ct. 810; New York, etc., R. Co. r. Penn-
sylvania, 158 U. S. 431. 39 E. I'.d. 1043,
15 S. Ct. 896; McHcnry v. Alfnrd, 168



U. S. 651, 42 L. Ed. 614, 18 S. Ct. 242;
Atlantic, etc., Tel. Co. v. Philadelphia,
190 U. S. 160, 47 L. Ed. 995, 24 S. Ct.
817. In Maine v. Grand Trunk R. Co.,
142 U. S. 217, 35 L. Ed. 994, 12 S. Ct. 121,
the authority of the Philadelphia Steam-
ship Company Case was accepted without
question, and the decision was justified
l)y the majority as not in any wa^ qual-
ifying or impairing it. The validity of
the distinction was what divided the
court." Galveston, etc., R. Co. v. Texas,
210 U. S. 217, 52 L. Ed. 1031, 28 S. Ct.
638.

A state statute which levies a tax upon
the gross receipts of railroads for the
carriage of freight and passengers into,
out of, or through the state, is a tax upon
commerce between the states. Fargo v.
Michigan, 121 U. S. 230, 30 L. Ed. 888,
7 S. Ct. 857.

60. Fargo v. Michigan, 121 U. S. 230,
:io E. Ed. 888, 7 S. Ct. 857. See New
York, etc., R. Co. v. Pennsylvania, 158
U. S. 431, 39 L. Ed. 1043, 15 S. Ct. 896.

61. Gross receipts of intrastate busi-
ness. — Southern R. Co. ?'. Asheville, 69
[•■(■fl. 350.

62. Where railroad partly within state.
—Maine 7>. Grand Trunk R. Co.. 142 U.
S. 217, 35 L. Ed. 994. 12 S. Ct. 121, cited



§ 3948



CARRIERS.



3560



Interstate Transportation between Intrastate Points.— The state may
impose a tax on the gross receipts on the transportation of goods and passen-
gers by continuous carriage from one point in the state to another point in the
same 'state, aUhough part of the route is over the soil of another state. ^^^

Where Carrier Is Domestic Corporation. — Gross receipts of a raih-oad
company from transportation between terminal points, one or both of which are
without the state, by route lying partly within or wholly without the state, are not
subject to taxation by such state, though the company's franchises were derived
from it.*'-*

Tax Equal to One Percent of Gross Receipts. — A state can not impose a
tax upon railroad companies whose lines lie wholly within the state, equal to
one per centum of the gross receipts, where a part of such gross receipts is de-
rived from the carriage of freight and passengers in interstate commerce.*'^ It



in New York, etc., R. Co. v. Pennsylva-
nia, 158 U. S. 431, 39 L. Ed. 1043, 15 S.
Ct. 896; Ficklen v. Taxing Dist., 145 U.
S. 1, 36 L. Ed. 601, 21 S. Ct. 810.

In this respect the tax was unlike that
levied in Philadelphia, etc., Steamship
Co. V. Pennsylvania, 122 U. S. 326, 30 L.
Ed. 1200, 7 S. Ct. 1118, where the specific
gross receipts for transportation were
taxed as such, taxed "not only because
they are money, or its value, but because
they were received for transportation."
Ficklen v. Taxing Dist., 145 U. S. 1, 36
L. Ed. 601, 21 S. Ct. 810.

63. Interstate transportation between
intrastate points. — Lehigh Valley R. Co.
V. Pennsylvania, 145 U. S. 192, 205, 36 L.
Ed. 672, 12 S. Ct. 806, affirming 1 Monag.
45, 17 Atl. 179; S. C, 129 Pa. 308, 18
Atl. 125.

64. Where carrier is domestic corpora-
tion. — Commonwealth ^^ Lehigh Valley
R. Co. (Pa.), 1 Monag. 45, 17 Atl. 179.

65. Tax "equal to" stated per cent of
gross receipts. — The state can not im-
pose the tax levied by Act Tex. April
17, 1905, p. 336, c. 141, upon railway com-
panies whose lines lie wholly within the
state, "equal to 1 per centum of their
gross receipts," where a part, and, in
some cases, much the larger part, of
these gross receipts, is derived from the
carriage of passengers and freight com-
ing from, or destined to, points without
the state. Judgment, State v. Galveston,
etc., R. Co., 100 Tex. 153, 97 S. W. 71,
reversed in Galveston, etc., R. Co. v.
Texas, 210 U. S. 217, 52 L. Ed. 1031, 28
S. Ct. 638.

This is an action against certain rail-
roads to recover taxes and penalties.
The supreme court of the state held the
penalties to be void under the state con-
stitution, but upheld the tax. State v.
Galveston, etc., R. Co., 100 Tex. 153, 97
S. W. 71. The railroads brought the
case here mainly on the ground that the
law upon which the action is based is an
attempt to regulate commerce among the
states. In the course of the opinion the
court said: "By whatever name the ex-
action may be called, if it amounts to no
more than the ordinary tax upon prop-



erty or a just equivalent therefor, ascer-
tained by reference thereto, it is not open
to attack as inconsistent with the consti-
tution. The question is whether this is
such a tax. It appears sufficiently, per-
haps from what has been said, that we
arc to look for a practical rather than
a logical or philosophical distinction.
The state must be allowed to tax the
property, and to tax it at its actual value
as a going concern. On the other hand,
the state can not tax the interstate busi-
ness. The two necessities hardly admit
of an absolute logical reconciliation. Yet
the distinction is not without sense.
When a legislature is trying simply to
value property, it is less likely to at-
tempt or to effect injurious regulation
than when it is aiming directly at the
receipts from interstate commerce. A
practical line can be drawn by taking the
whole scheme of taxation into account.
That must be done by this court as best
it can. Neither the state courts nor the
legislature, by giving the tax a particular
name or by the use of some form of
words, can take away our duty to con-
sider its nature and effect. If it bears
upon commerce among the states so di-
rectly as to amount to a regulation in a
relatively immediate way, it will not be
saved by name or form." Galveston,
etc., R. Co. V. Texas, 210 U. S. 217, 52
L. Ed. 1031, 28 S. Ct. 638; Stockard v.
Morgan, 185 U. S. 27, 46 L. Ed. 785, 22
S. Ct. 576; Asbell v. Kansas, 209 U. S.
251, 52 L. Ed. 778, 28 S. Ct. 485, 14 Am.
& Eng. Ann. Cas. 1101.

"The distinction between a tax 'equal
to' 1 per cent of gross receipts, and a
tax of 1 per cent of the same, seems to
us nothing except where the former
phrase is the index of an actual attempt
to reach the property and to let the in-
terstate traffic and the receipts from it
alone. We find no such attempt or
anything to qualify the plain inference
from the statute, taken by itself. On the
contrary, we rather infer from the judg-
ment of the state court and from the
argument on behalf of the state that an-
other tax on the property of the railroad
is upon a valuation of that property.



3561 TAXATION. § 3948

does not matter that the corporations are domestic corporations, or that the tax
embraces indiscriminately gross receipts from commerce within as well as out-
side of the state. 6^

Gross Earnings of Preceding Year. — A statute requires every corporation,
operating a railroad in the state, to pay an annual excise tax for the privilege
of exercising its franchises ; the amount of the tax to be determined according
to a sliding scale proportioned to the average gross earnings per mile within the
state for the year preceding the levy of the tax. The method of determining the
amount of the tax is merely a way of ascertaining the value of the privilege, and
does not render the tax a tax upon the receipts themselves, and hence, in its ap-
plication to railroads which enter the state from another state or from Canada,
the act does not operate as a regulation or foreign commerce.*^"

Gross Receipts Arising from Freights. — A statute of a state imposing a
tax upon the gross receipts of railroad companies is not repugnant to the con-
stitution of the United States, though the gross receipts are made up in part from
freights received for transportation of merchandise from the state to another
state, or into the state from another. Such a tax is not a regulation of interstate
commerce. Nor is it a tax on imports or exports. Nor is it a tax upon interstate
transportation. A distinction is made between a tax upon freights carried be-
tween states, because of their carriage, and a tax upon the fruits of such trans-
portation after they have become intermingled with the other property of the
carrier.^'^

Tax on Basis of Amount of Gross Receipts. — A tax upon gross receipts of
a transportation company is not necessarily a tax upon commerce. Every tax
upon personal property, or upon occupations, business, or franchises, affects
more or less the subjects and the operations of commerce. Yet it is not every-
thing that affects commerce that amounts to a regulation of it, within the mean-
ing of the constitution. The states have authority to tax the estate, real and
personal, of all their corporations, including carrying companies, precisely as
they may tax similar property when belonging to natural persons, and to the
same extent. Such taxation may be laid upon a valuation or may be an excise;
and, in exacting an excise tax from their corporations, the states are not obliged
to impose a fixed sum upon the franchises, or upon the value of them, but they
may demand a graduated contribution, proportioned either to the value of the
privileges granted, or to the extent of their exercise, or to the results of such
exercises. No mode of effecting this and no forms of expression which have
not a meaning beyond this, can be regarded as violating the constitution. In
virtue of the right to tax the property of corporations, the state may lay a tax
upon the gross receipts of a carrying company, estimating it after those receipts
have been collected and have become the property of the company. And, in
virtue of the right to tax the franchises of corporations, the state may resort to
the gross receipts as a measure of probable value.*^^

Where Imposed in Nature of General Tax. — A tax on the gross receipts
of a railroad is not rcjjugnant to the constitution, because imposed on the railroad
companies in the nature of a general income tax, and incapable of being trans-
ferred as a burden upon the property carried from one state to another."'*

taken as a going concern. This is merely 68. Gross receipts arising from freights,

an effort to reach the gross receipts, not — State Tax on Railway Gross Receipts

eveii disguised by the name of an occu- (IT. S.), 15 Wall. 284, 21 L. F,d. 1G4.

pation tax, and in no way helped by the 69. Tax on basis of amount of gross

words 'equal to.'" Galveston, etc., R. receipts. — Reading Railroad v. Pennsyl-

Co. V. Texas, 210 U. vS. 217, 52 L. Ed. vania (U. S.), 15 Wall. 284, 21 L, Ed.

1031, 28 S. Ct. 6.38. 1f,4.

66. Galveston, etc., R. Co. v. Texas, 70. Where imposed in nature of gen-
210 U. S. 217, 52 L. Ed. 1031, 28 S. Ct. eral tax.— State Tax on Railway Gross
f'SH. Receipts (U. S.), 15 Wall. 284, 21 L.

67. Gross earnings of preceding year. Ed. 104; Osborne v. Mobile (U. S.), 16
—Maine v. Grand Trunk R. Co., 142 U. Wall. 479, 21 L. Ed. 470.

S. 217, 35 L. Ed. 994, 12 S. Ct. 121, 103.



§ 3948 CARRIERS. 3562

Gross Revenue Tax in Addition to Property Tax. — As applied to express
companies whose receipts are derived largely from commerce among the states
and which also receives large sums as income from investments in bonds and
land all outside the state, a statute which imposes upon public service con^ora-
tions operating within the state a "gross revenue tax," "which shall be in addition
to the taxes levied and collected upon an ad valorem basis upon the property and
assets of such corporations," is unconstitutional, not only as an attempt to tax
interstate commerce, but as an attempt to levy a tax upon property situated with-
out and beyond the jurisdiction of the stated ^

Gross Revenue Tax in Lieu of All Property Tax. — Including the gross
receipts of a nonresident express company, upon the basis of which a tax is im-
posed by Alinn. Rev. Laws 1905, ch. 11, "in lieu of all taxes on its property,"
the earnings from interstate shipments, where the transportation while in the
company's hands was performed wholly within the state, does not unconstitu-
tionally' burden interstate commerce, but is an exercise of the state's power to



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