33

Opinion of the Court.

Section 8 of the Constitution declares that "Congress shall have power . . . to regulate commerce with foreign Nations, and among the several States. . . ." In imposing taxes for state purposes a state is not exercising any power which the Constitution has conferred upon Congress. It is only when the tax operates to regulate commerce between the states or with foreign nations to an extent which infringes the authority conferred upon Congress, that the tax can be said to exceed constitutional limitations. See Gibbons v. Ogden, 9 Wheat. 1, 187; South Carolina Highway Dept. v. Barnwell Bros., 303 U. S. 177, 185. Forms of state taxation whose tendency is to prohibit the commerce or place it at a disadvantage as compared or in competition with intrastate commerce, and any state tax which discriminates against the commerce, are familiar examples of the exercise of state taxing power in an unconstitutional manner, because of its obvious regulatory effect upon commerce between the states.2

'Despite mechanical or artificial distinctions sometimes taken between the taxes deemed permissible and those condemned, the decisions appear to be predicated on a practical judgment as to the likelihood of the tax being used to place interstate commerce at a competitive disadvantage. See Galveston, H. & S. A. R. Co. v. Texas, 210 U. S. 217, 227. License taxes requiring a corporation engaged in interstate commerce to pay a fee of a certain percentage of its capital stock have been rejected because of the danger that each state in which the corporation does business may impose a similar tax, measured by its interstate business in all, Western Union v. Kansas, 216 U. S. 1; Atchison, T. & S. F. Ry. Co. v. O'Connor, 223 U. S. 280; Looney v. Crane Co., 245 U. S. 178; International Paper Co. v. Massachusetts, 246 U. S. 135, and have only been sustained when apportioned to that part of the capital thought to be attributable to an intrastate activity. National Leather Co. v. Massachusetts, 277 U. S. 413; International Shoe Co. v. Shartel, 279 U. S. 429; Ford Motor Co. v. Beauchamp, 308 U. S. 331. Privilege taxes requiring a percentage of the gross receipts from interstate transportation or from

But it was not the purpose of the commerce clause to relieve those engaged in interstate commerce of their just share of state tax burdens, merely because an incidental or consequential effect of the tax is an increase in the cost of doing the business. Western Live Stock v. Bureau, 303 C. S. 250, 254. Not all state taxation is to be condemned because, in some manner, it has an effect upon commerce between the states, and there are many forms of tax whose burdens, when distributed through the play of economic forces, affect interstate commerce,

other activities in carrying on the movement of that commerce, which if sustained could be imposed wherever the interstate activity occurs, have been struck down for similar reasons. Fargo v. Michigan, 121 C. S. 230; Philadelphia & S. Steamship Co. v. Pennsylvania, 122 U. S. 326; Leloup v. Mobie, 127 U. S. 640: Griveston, H. & S. A. R. Co. v. Texas, 210 U. S. 217, ef. Grin, White & Prince v. Henneford, 305 U. S. 434. Fixed-sum License fees, regardess of the amount, for the privilege of carrying on the commerce, have been thought likely to be used to overburden the interstate commerce, McCall v. California, 136 U. S. 104; Crutcher v. Kentucky, 141 U. S. 47; Barrett v. New York, 232 U. S. 14; Tera Tansportation & Terminal Co. v. New Orleans, 264 U. S. 150. Taxation of articles in course of their movement in interstate commerce is similarly foreclosed. Case of State Freight Tar, 13 Wall. 232; Champian Realty Co. v. Brattleboro, 260 U. S. 366; Hughes Bros. Co. v. Minnesota, 272 C. S. 400; Carson Petroleum Co. v. Val, 279 U. S. 95. See Henderson, The Position of Foreign Corporations in American Constitutional Law, 117; Powell, Indirect Encroachment on Federal Authority by the Taxing Power of the States, 31 Harv. L. Rev. 321, 572, 721, 932; 32 Harv. L. Rev. 234, 374, 634, 902. Lying back of these decisions is the recognized danger that, to the extent that the burden falls on economic interests without the state, it is not likely to be alleviated by those political restraints which are normally exerted on legislation where it affects adversely interests within the state. See Robbins v. Shelby County Taring District, 120 U. S. 489, 499; South Carolina Highway Dept. v. Barnwell Bros., 303 U. S. 177, 185, Note 2; cf. McCulloch v. Maryland, 4 Wheat. 316; Helvering v. Gerhardt, 304 U. S. 405, 412.

which nevertheless a stur: I began a de canmerce which the Consuman Bresumes. I NI may be leviedi un nes mame vinky damer Tan 11state cerze Na-ismULINTI UN IN instruments I SIZ NEMTY S NG TA hibited. The the ammm f pricey SLICEL TINT state, before its movement begas' I I I MB's not a fortdem rerumL 1 CR in de v housing of merchiode prepurcury 1 78 2 Verstate shipment or upon its er varv ir se by the w signee after the interstate joomer has moel so pre cluded. Nor is taxation of a bread bustness I once which is separate and don me dhe UNDIRUT or intercourse which is esse romere, frik merely because in the crimary course soch transportar tion or intercourse is indored or occasioned by such business, or is prerequisite to it. Mestera Line Stock v. Fu reau, supra, 253, and cases died

*United States Grue Co. v. Och Creek, 24′′ U. S. 221; Underwood Typewriter Co. v. Chamberlain 254 T S. 213: Admne Coust. Lome R. Co. v. Daughton, 252 U. S. 413; Munson Nzrugation C2, v. State Board, 297 U. S. 441.

'Adams Express Co. v. Ohio, 155 U. S. 194: Wells Fargo & Co. v. Nevada, 248 U. S. 165; St. Louis & E. St. L. By. Co. v. Miss2277, 236 C. S. 314; Southern Ry. Co. v. Watts, 250 C. S. 319.

'Coe v. Errol, 116 U. S. 517; Bacon x. 163, 22′′ U. S. 304; Heisler v. Thomas Colliery Co., 260 U. S. 245; Minnesota v. Blasi 290 U. S. 1. Cf. Hope Natural Gas Co. v. Ha, 274 U. S. 284.

'Brown v. Houston, 114 U. S. 622; Pittsburgh & Southern Coal Co. v. Bates, 156 U. S. 577; American Steel & Wire Co. v. Speed, 192 U. S. 500; General Oil Co. v. Crain, 209 U. S. 211.

*Federal Compress & Warehouse Co. v. McLean, 291 U. S. 17; Chassaniol v. Greenwood, 291 U. S. 584.

8 Eastern Air Transport v. South Carolina, 285 U. S. 147; Gregg Dyeing Co. v. Query, 286 U. S. 472; Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U. S. 249; Edelman v. Boeing Air Transport, 289 U. S.

Opinion of the Court.

309 U.S.

In few of these cases could it be said with assurance that the local tax does not in some measure affect the commerce or increase the cost of doing it. But in them as in other instances of constitutional interpretation so as to insure the harmonious operation of powers reserved to the states with those conferred upon the national government, courts are called upon to reconcile competing constitutional demands, that commerce between the states shall not be unduly impeded by state action, and that the power to lay taxes for the support of state government shall not be unduly curtailed. See Woodruff v. Parham, 8 Wall. 123, 131; Brown v. Houston, 114 U. S. 622; Galveston, H. & S. A. R. Co. v. Texas, 210 U. S. 217, 225, 227; South Carolina Highway Dept. v. Barnwell Bros., supra; Ford Motor Co. v. Beauchamp, 308 U. S. 331; cf. Metcalf & Eddy v. Mitchell, 269 U. S. 514, 523, et seq.; Board of County Comm'rs of Jackson County v. United States, 308 U. S. 343.

Certain types of tax may, if permitted at all, so readily be made the instrument of impeding or destroying interstate commerce as plainly to call for their condemnation as forbidden regulations. Such are the taxes already noted which are aimed at or discriminate against the commerce or impose a levy for the privilege of doing it, or tax interstate transportation or communication or their gross earnings, or levy an exaction on merchandise in the course of its interstate journey. Each imposes a burden which intrastate commerce does not bear, and merely because interstate commerce is being done places it at a disadvantage in comparison with intrastate business or property in circumstances such that if the asserted power to tax were sustained, the states would be left free to exert it to the detriment of the national commerce.

The present tax as applied to respondent is without the possibility of such consequences. Equality is its theme,

33

Opinion of the Court.

cf. Henneford v. Silas Mason Co., 300 U. S. 577, 583. It does not aim at or discriminate against interstate commerce. It is laid upon every purchaser, within the state, of goods for consumption, regardless of whether they have been transported in interstate commerce. Its only relation to the commerce arises from the fact that immediately preceding transfer of possession to the purchaser within the state, which is the taxable event regardless of the time and place of passing title, the merchandise has been transported in interstate commerce and brought to its journey's end. Such a tax has no different effect upon interstate commerce than a tax on the "use" of property which has just been moved in interstate commerce, sustained in Monamotor Oil Co. v. Johnson, 292 U. S. 86; Henneford v. Silas Mason Co., supra; Felt & Tarrant Mfg. Co. v. Gallagher, 306 U. S. 62; Southern Pacific Co. v. Gallagher, 306 U. S. 167, or the tax on storage or withdrawal for use by the consignee of gasoline, similarly sustained in Gregg Dyeing Co. v. Query, 286 U. S. 472; Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U. S. 249; Edelman v. Boeing Air Transport, 289 U. S. 249, or the familiar property tax on goods by the state of destination. at the conclusion of their interstate journey. Brown v. Houston, supra; American Steel & Wire Co. v. Speed, 192 U.S. 500.

If, as guides to decision, we look to the purpose of the commerce clause to protect interstate commerce from discriminatory or destructive state action, and at the same time to the purpose of the state taxing power under which interstate commerce admittedly must bear its fair share of state tax burdens, and to the necessity of judicial reconciliation of these competing demands, we can find no adequate ground for saying that the present tax is a) regulation which, in the absence of Congressional action

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