Northwestern States Portland Cement Company v. Minnesota/Dissent Whittaker

Mr. Justice WHITTAKER, with whom Mr. Justice FRANKFURTER and Mr. Justice STEWART join, dissenting.

I respectfully dissent. My disagreement with the Court is over what I think are constitutional fundamentals. I think that the Commerce Clause of the Constitution, Art. I, § 8, cl. 3, as consistently interpreted by this Court until today, precludes the States from laying taxes directly on, and thereby regulating, 'exclusively interstate commerce.' But the Court's decision today holds that the States may do so.

The statutes, facts and findings involved are clear, sharp and undisputed. There is no room to doubt that the statutes involved were designed to tax income derived 'exclusively (from) interstate commerce'; that the courts of the States concerned have found that the income involved derived 'exclusively (from) interstate commerce'; and that the taxes in question were laid directly on that interstate commerce.

Northwestern States Portland Cement Company, an Iowa corporation maintaining its principal office and only manufacturing plant in Mason City in that State, has for many years sold its cement locally in Iowa and, in interstate commerce, to dealers in neighboring States including Minnesota. Although the 'exclusively' interstate character of the commerce done by Northwestern in Minnesota is not disputed, the course of its conduct in that State is summarized in the margin. in 1950 Minnesota, acting under its statutory 'three factor formula' now contained in Minnesota Statutes 1957, § 290.19, M.S.A., apportioned and allocated to Minnesota a substantial part of Northwestern's net income for each of the years 1933 through 1948. Upon the amount of net income so allocated, Minnesota assessed a tax against Northwestern for each of those years under what is now Minnesota Statutes 1957, § 290.03, M.S.A. which, in pertinent part, provides:

'290.03. * *  * classes of taxpayers. An annual tax for each     taxable year, computed in the manner and at the rates      hereinafter provided, is hereby imposed upon the taxable net      income for such year of the following classes of taxpayers:

'(1) Domestic and foreign corporations * *  * whose business      within this state during the taxable year consists      exclusively of *  *  * interstate commerce *  *  * .'

Upon Northwestern's refusal to pay those taxes, Minnesota brought this action in its own court to recover them. Northwestern defended upon the grounds (1) that s 290.03, as applied, imposed the taxes directly upon interstate commerce and, hence, regulated it in violation of the Commerce Clause of the Constitution, Art. I, § 8, cl. 3, and (2) that the income involved was not subject to Minnesota's jurisdiction and its action in taxing it violated the Due Process Clause of the Fourteenth Amendment. At the conclusion of the trial, the court made formal findings of fact including the following:

'(Northwestern's) activities in this state were an integral     part of its interstate activities, and all revenue received      by it from customers in Minnesota resulted from its      operations in interstate commerce.'

But the trial court, nevertheless, sustained the tax and entered judgment for the State. Northwestern appealed to the Supreme Court of Minnesota which, without challenging the finding of fact above-quoted, affirmed, 250 Minn. 32, 84 N.W.2d 373, and the case is here on Northwestern's appeal. 355 U.S. 911, 78 S.Ct. 341, 2 L.Ed.2d 272.

Stockham Valves & Fittings, Inc., is a Delaware corporation maintaining its principal office and only manufacturing plant in Birmingham, Alabama. It makes valves and pipefittings which it sells locally in Alabama and, in interstate commerce, to wholesalers and jobbers in Georgia as well as in all other States of the Union. Although the facts are stipulated and the 'exclusively' interstate character of the commerce done by Stockham in Georgia is not in dispute, the course of its conduct in that State is summarized in the margin. Petitioner, as State Revenue Commissioner of Georgia, acting under the 'Three Factor Ratio' of the Code of Georgia, 1933, as amended, § 92 3113(4), apportioned and allocated to Georgia a part of Stockham's net income for each of the years 1952, 1954, and 1955. Upon the amounts of net income so allocated, petitioner assessed a tax against Stockham for each of those years under the Code of Georgia of 1933, as amended, § 92-3113, which, in pertinent part, provides:

'Corporations, allocation and apportionment of income.-The     tax imposed by this law shall apply to the entire net income,      as herein defined, received by every corporation, foreign or      domestic, owning property or doing business in this State. Every such corporation shall be deemed to be doing business     within this State if it engages within this State in any      activities or transactions for the purpose of financial      profit or gain, *  *  * whether or not any such activity or      transaction is connected with interstate or foreign      commerce.' (Emphasis added.)

Upon demand, Stockham paid the taxes and, after denial of timely claim for refund, brought this suit to recover the amount paid, contending (1) that § 92-3113, as applied, imposed the taxes directly upon interstate commerce and, hence, regulated it in violation of the Commerce Clause of the Constitution, and (2) that the income involved was not subject to Georgia's jurisdiction and its action in taxing it violated the Due Process Clause of the Fourteenth Amendment. The trial court sustained the tax. Stockham appealed to the Supreme Court of Georgia. It found that:

'(W)ithout dispute (Stockham) was engaged exclusively in     interstate commerce insofar as its activities in Georgia are      concerned *  *  * .' 213 Ga. 713, 719, 101 S.E.2d 197, 201.

And it held that § 92-3113, as applied, violated the Commerce Clause of the Constitution. It thereupon reversed the judgment, 213 Ga. 713, 101 S.E.2d 197, and we granted Georgia's petition for certiorari. 356 U.S. 911, 78 S.Ct. 670, 2 L.Ed.2d 585.

I submit that these simple recitals clearly show (1) that the Minnesota and Georgia statutes, in plain terms, purport to tax income derived 'exclusively (from) interstate commerce,' (2) that the Minnestoa and Georgia courts have found that the income involved was derived 'exclusively (from) interstate commerce,' and (3) that the taxes were laid directly on that interstate commerce. There is no room to dispute these admitted facts. Yet, I believe, the Court does not squarely face them but veiledly treats the cases as though intrastate commerce were to some extent involved. It says, referring to the Minnesota case, (a) that one of the salesmen was known as 'district manager,' (b) that the Minneapolis sales office was used 'as a clearing house,' (c) that 'Orders were solicited and received from (builders, contractors and architects), on special forms furnished by appellant, directed to an approved local dealer who in turn would fill them by placing a like order with appellant, (and that) (t)hrough this system appellant's salesmen would in effect secure orders for local dealers which in turn were filled by appellant in the usual manner,' and (d) that 'Salesmen would also receive and transmit claims against appellant for loss or damage in any shipments made by it, informing the company of the nature thereof and requesting instructions concerning the same.' These recitals, if found true, might very well have supported a finding, had there been one, that the taxpayer was engaged in intrastate commerce in Minnesota. Particularly might the statement about the salesmen taking orders from builders, contractors and architects for local dealers have done so, for it was expressly held in Cheney Brothers Co. v. Commonwealth of Massachusetts, 246 U.S. 147, 155, 38 S.Ct. 295, 297, 62 L.Ed. 632, that such conduct amounted to engaging in the local business of selling products for such dealers. But no such finding was made by the Minnesota courts. And there is more than colorable basis for believing that Minnesota did not desire such a finding, as any such practice could easily be ended by Northwestern, and Minnesota's purpose was not to rest on such a basis but to obtain an adjudication that its statute, § 290.03, constitutionally imposed a tax upon the taxpayer's net income from Minnesota customers though derived 'exclusively (from) interstate commerce.' Nor can the Court's seeming disdain of the word 'commerce' and its frequent use, instead, of 'activities' obscure the fact that it was 'exclusively interstate commerce' that was taxed. The abstract use of the word 'activities,' as applied to a commerce question and distinguished from a due process one, has no legal significance. What is of legal consequence is whether the 'activities' were in intrastate or in interstate commerce. Here, the Minnesota and Georgia courts have found that the income which was taxed had derived 'exclusively (from) interstate commerce.'

So if anything is plain it is that we are not presented with cases involving the doing of any intrastate commerce in Minnesota or Georgia by the taxpayers. The courts of those States have expressly found that there was none. Therefore, we do not have a situation where a taxpayer was doing both intrastate and interstate commerce within the taxing State, thus to invoke application of the State's apportionment statute in order to determine how much of the total income of the taxpayer had derived from intrastate commerce in the taxing State, and was, therefore, subject to its taxing power. Instead we have here only interstate commerce, which the States are prohibited from regulating, by direct taxation or otherwise, by the Commerce Clause of the Constitution.

Yet, the Court 'conclude(s) that net income from the interstate operations of a foreign corporation may be subjected to state taxation provided the levy is not discriminatory and is properly apportioned to local activities within the taxing State forming sufficient nexus to support the same.' (Emphasis added.) I respectfully submit that this is novel doctrine, and that this Court has never before so held.

The Court refers to our past opinions in this field as creating a 'quagmire,' and says 'there is a 'need for clearing up the tangled underbrush of past cases' with reference to the taxing power of the States * *  * .' I respectfully submit that this Court's past opinions, rightly understood and aligned in their proper categories, are remarkably consistent in a field so varied and complex, and that they do not deserve the characterizations given them. It is quite true in this field-as I thihk is the case in almost every field-that loose statements can be found in some of the opinions which when considered in isolation, and certainly when taken out of context, are seemingly outside the line of the law. But I think it is entirely fair to say that such confusion as exists is mainly due to a failure properly to analyze, understand, categorize and apply the decisions.

In applying the Court's opinions in the field of state income taxation of commerce, it is at least necessary sharply to discern (1) whether the tax was laid upon the general income of a resident or domiciliary of the taxing State, (2) whether the taxpayer's production, manufacturing, distribution or management facilities, or some of them, were located in the taxing State, (3) whether the taxpayer conducted both intrastate and interstate commerce in the taxing State, and, if so, (4) whether the tax was directly laid on income derived from interstate commerce, or-what is the equivalent on the whole of the income, or whether the whole of the income was used as one of the several factors in an apportionment formula merely for the purpose of fairly measuring the uncertain percentage or proportion of the total income that was earned within the taxing State.

Let us start our consideration with fundamentals. Of course, the foundation is the Commerce Clause itself. It provides: 'The Congress shall have Power * *  * To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes *  *  * .' U.S.Const. Art. I, § 8, cl. 3. That clause 'by its own force created an area of trade free from interference by the States.' Freeman v. Hewit, 329 U.S. 249, 252, 67 S.Ct. 274, 276, 91 L.Ed. 265. '(N)o state has the right to lay a tax on interstate commerce in any form * *  *. (T)he reason is that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to congress.' Leloup v. Port of Mobile, 127 U.S. 640, 648, 8 S.Ct. 1380, 1384, 32 L.Ed. 311. And see the thirteen cases in this Court there cited in support of the quoted text. Mr. Justice Brandeis, speaking for the Court in Sprout v. City of South Bend, 277 U.S. 163, 171, 48 S.Ct. 502, 505, 72 L.Ed. 833, declared that 'in order that (a State) fee or tax shall be valid, it must appear that it is imposed solely on account of the intrastate business; that the amount exacted is not increased because of the interstate business done; that one engaged exclusively in interstate commerce would not be subject to the imposition; and that the person taxed could discontinue the intrastate business without withdrawing also from the interstate business.' (Emphasis added.) The same declaration was made for the Court by Mr. Justice Butler in East Ohio Gas Co. v. Tax Commission, 283 U.S. 465, 470, 51 S.Ct. 499, 500, 75 L.Ed. 1171, and again by Mr. Chief Justice Hughes in Cooney v. Mountain States Tel. Co., 294 U.S. 384, 393, 55 S.Ct. 477, 482, 79 L.Ed. 934.

From this alone it would seem necessarily to follow that the taxes here challenged, which were laid by the States directly on 'exclusively interstate commerce,' burdened that commerce and, hence, regulated it in violation of the Commerce Clause of the Constitution. But there is more. This Court has consistently struck down state taxes which were laid on business that was exclusively interstate in character. Chency Brothers Co. v. Commonwealth of Massachusetts, 246 U.S. 147, 153, 38 S.Ct. 295, 296, 62 L.Ed. 632; Alpha Portland Cement Co. v. Commonwealth of Massachusetts, 268 U.S. 203, 45 S.Ct. 477, 69 L.Ed. 916; Ozark Pipe Line Corp. v. Monier, 266 U.S. 555, 45 S.Ct. 184, 69 L.Ed. 439; Spector Motor Service v. O'Connor, 340 U.S. 602, 71 S.Ct. 508, 95 L.Ed. 573. Cf. Joseph v. Carter & Weekes Stevedoring Co., 330 U.S. 422, 67 S.Ct. 815, 91 L.Ed. 993; Freeman v. Hewit, supra. Neither the Court nor counsel have cited, and our research has not disclosed, a single opinion by this Court that has upheld a state tax laid on 'exclusively interstate commerce,' and we are confident none exists.

The Court recognizes that 'the States, under the Commerce Clause, are not allowed 'one single tax-worth of direct interference with the free flow of commerce.' Freeman v. Hewit, 1946, 329 U.S. 249, 256, 67 S.Ct. 274, 279, 91 L.Ed. 265.' It then says 'On the other hand, it has been established since 1918 that a net income tax on revenues derived from interstate commerce does not offend constitutional limitations upon state interference with such commerce. The decision of Peck & Co. v. Lowe, 247 U.S. 165, 38 S.Ct. 432, 62 L.Ed. 1049, pointed the way.' What way did it point? There the 1913 federal income tax Act, imposing a tax upon the 'entire net income arising or accruing from all sources during the preceding calendar years.' was applied by the Federal Government to the whole net income of one who derived about three-fifths of it from 'buying goods in the several states, shipping them to foreign countries and there selling them.' The question was whether such a tax validly could be imposed in the light of Art. I, § 9, cl. 5 of the Constitution which provides that 'No Tax or Duty shall be laid on Articles exported from any State.' This Court held that the export clause only precluded taxation of 'articles in course of exportation,' and did not prohibit federal taxation of general income of the taxpayer 'from all sources,' and that the tax was 'not laid on income from exportation because of its source,' but upon general income 'from all sources,' and was, therefore, within the federal power to levy. 247 U.S. at page 174, 38 S.Ct., at page 433. But here the States of Minnesota and Georgia 'laid (the taxes directly) on income from (exclusively interstate commerce) because of its source.' They do not contend that they were laid on any intrastate commerce but admit there was none. I submit that the Lowe case does not in any sense 'point the way' for direct taxation by a State of that which it finds and admits to be 'exclusively interstate commerce.'

The Court then says 'The first case in this Court applying the doctrine (of the Lowe case) to interstate commerce was that of United States Glue Co. v. Town of Oak Creek, 1918, 247 U.S. 321, 38 S.Ct. 499, 62 L.Ed. 1135.' I submit that nothing in that case is authority for the proposition that a State may tax 'exclusively interstate commerce.' Exactly to the contrary, it sustained a tax only on 'that proportion of (the taxpayer's) income derived from business transacted * *  * within the state *  *  * .' 247 U.S. at page 329, 38 S.Ct. at page 501. That was the whole point of the case. There the Glue Company, a Wisconsin corporation, maintained its principal office and its only manufacturing plant in the town of Oak Creek, in that State. It also maintained stocks in branches in other States. It sold its products both locally in Wisconsin, and in other States in interstate commerce, shipping either directly from its plant in Wisconsin or from one of its branches in another State. In the year involved, about one-seventh of its sales were made locally in Wisconsin, four-sevenths of them were made, and the goods shipped from its factory directly to customers in other States, in interstate commerce, and two-sevenths of them were made from stocks in its branches in other States. Wisconsin's income tax statutes provided, in pertinent part, Laws 1911, c. 658, that 'any person engaged in business within and without the state shall * *  * be taxed only upon that proportion of such income as is derived from business transacted *  *  * within the state.' 'In order to determine what part of the income of a corporation engaged in business within and without the state *  *  * is to be taxed as derived from business transacted *  *  * within the state, reference is had to a formula prescribed by another statute,' which employed the total income of the taxpayer as one of its several factors. 'This formula was applied in apportioning (the taxpayer's) net 'business income' for the year' involved, which produced an amount substantially exceeding one-seventh of its total income-the amount of its local sales. '(U)pon the portion thus attributed to the State * *  * the tax in question was levied.' 247 U.S. at pages 323-325, 38 S.Ct. at page 499. The Glue Company resisted the tax, contending that it was imposed directly upon interstate commerce in violation of the Commerce Clause of the Constitution, and, failing of relief in the Supreme Court of the State, it brought the case here on writ of error. This Court affirmed, concluding that the tax was 'measured * *  * by the net proceeds from this part of plaintiff's business, along with a like imposition upon its income derived from other sources, and in the same way that other corporations doing business within the state are taxed upon that proportion of their income derived from business transacted *  *  * within the state. * *  * ' 247 U.S. at page 329, 38 S.Ct. at page 501. (Emphasis added.)

It would seem too obvious for debate that if a taxpayer maintains its factory and produces all its goods in one State but sells the whole in other States in interstate commerce, it has derived some portion of its income in the State of manufacture or production. It should be obvious, too, that where such a manufacturer has sold some of its products locally and others of them in interstate commerce, that the mere ratio of intrastate sales to interstate ones well might not constitute a fair basis for determining what part of the net income was derived from intrastate commerce on the one hand, and interstate commerce on the other. Inasmuch as it has always been thought by American lawyers that the States cannot tax interstate commerce but may tax intrastate commerce, it has been deemed necessary for the State to determine what portion of the total income of the taxpayer was derived from intrastate commerce done within its borders and is therefore subject to its taxing power. To accomplish that purpose, most States, like Wisconsin in the United States Glue case, and like Minnesota and Georgia in the cases here, have adopted apportionment statutes, applicable to situations where the taxpayer is doing business both within and without the State, which use, as one of the several factors, the total income of the taxpayer in measuring the part of the income that was derived from within the taxing State. Those were the principles applied in the United States Glue case.

Those principles were again made unmistakably clear, and were applied, by Mr. Justice Brandeis, in Underwood Typewriter Co. v. Chamberlain, 254 U.S. 113, 41 S.Ct. 45, 65 L.Ed. 165, next relied on by the Court. That case does not hold that 'exclusively interstate commerce' may be taxed by a State. It holds just the contrary. There Underwood Typewriter Company, though a Delaware corporation, had become a domiciliary of Connecticut and manufactured all of its machines at its factory in that State. It sold them both locally in Connecticut and in other States in interstate commerce. In the year involved, about 33 percent of its dollar volume of sales was made in Connecticut and the remainder in other States in interstate commerce. To determine the amount of Underwood's net income derived from intrastate commerce, Connecticut applied the formula prescribed by its apportionment statute. This resulted in a determination that 47 percent of Underwood's net income had been derived from intrastate commerce in Connecticut. Upon that amount it computed and assessed its 2 percent net income tax. This Court, in sustaining the tax, over Underwood's objection that it violated the Commerce Clause of the Constitution, said: 'This tax is based upon the net profits earned within the state. That a tax measured by net profits is valid, although these profits may have been derived in part, or indeed mainly, from interstate commerce is settled. United States Glue Co. v. Town of Oak Creek, 247 U.S. 321, 38 S.Ct. 499, 62 L.Ed. 1135; Shaffer v. Carter, 252 U.S. 37, 57, 40 S.Ct. 221 (227), 64 L.Ed. 445. Compare Peck & Co. v. Lowe, 247 U.S. 165, 38 S.Ct. 432, 62 L.Ed. 1049. * *  * The profits of the corporation were largely earned by a series of transactions beginning with manufacture in Connecticut and ending with sale in other states. In this it was typical of a large part of the manufacturing business conducted in the state. The Legislature in attempting to put upon this business its fair share of the burden of taxation, was faced with the impossibility of allocating specifically the profits earned by the processes conducted within its borders. It, therefore, adopted a method of apportionment which, for all that appears in this record, reached, and was meant to reach, only the profits earned within the state.' 254 U.S. at pages 120-121, 41 S.Ct. at page 46. (Emphasis added.)

The Court next takes up the case of Memphis Natural Gas Co. v. Beeler, 315 U.S. 649, 62 S.Ct. 857, 86 L.Ed. 1090. That case does not at all hold that 'exclusively interstate commerce' may be taxed by a State. It, too, holds just the contrary. There Memphis Natural Gas Company purchased gas in Louisiana which it transported through its interstate pipe line to Tennessee where it sold 20 percent of it in interstate commerce, but it delivered 80 percent of it to Memphis Power & Light Company. 'That company distributes it to consumers under a contract with taxpayer which the Supreme Court of Tennessee has found to be a joint undertaking of the two companies whereby taxpayer furnishes gas from its pipeline, the Memphis company furnishes facilities and service for distribution and sale to consumers, and the proceeds of the sale, after deduction of specified costs and expenses, are divided between the two companies.' 315 U.S. at page 652, 62 S.Ct. at page 860. A Tennessee statute imposed a tax on all foreign and domestic corporations of 'three per cent. of the net earnings * *  * arising from business done wholly within the state, excluding earnings arising from interstate commerce.' Ibid. Acting under that statute, a tax 'was laid on (the taxpayer's) net earnings from the distribution of gas under its contract with the Memphis company.' 315 U.S. at page 653, 62 S.Ct. at page 860. This Court said that 'if the Supreme Court of Tennessee correctly construed taxpayer's contract with the Memphis company as establishing a profit-sharing joint adventure in the distribution of gas to Tennessee consumers, the taxpayer's net earnings under the contract were subject to local taxation.' 315 U.S. at pages 653-654, 62 S.Ct. at page 861. (Emphasis added.) This Court then found that the Supreme Court of Tennessee had correctly construed the contract and that the taxpayer's activities 'constituted participation in the business of distributing the gas to consumers after its delivery into the service pipes of the Memphis company,' and sustained the tax, concluding: 'There is no contention or showing here that the tax assessed is not upon net earnings justly attributable to Tennessee.' 315 U.S. at pages 656, 657, 62 S.Ct. at page 862. (Emphasis added.)

It is true that Mr. Chief Justice Stone's opinion in the Beeler case contains the following language at page 656 of 315 U.S., at page 862 of 62 S.Ct.:

'In any case even if taxpayer's business were wholly     interstate commerce, a nondiscriminatory tax by Tennessee      upon the net income of a foreign corporation having a      commercial domicile there, cf. Wheeling Steel Corp. v. Fox     (298 U.S. 193, 56 S.Ct., 773, 80 L.Ed. 1143), or upon net      income derived from within the state, Shaffer v. Carter, 252      U.S. 37, 57, 40 S.Ct. 221, 227, 64 L.Ed. 445; State of     Wisconsin v. Minnesota Mining & Mfg. Co., 311 U.S. 452, 61     S.Ct. 253, 85 L.Ed. 274; cf. People of State of New York ex     rel. Cohn v. Graves, 300 U.S. 308, 57 S.Ct. 466, 81 L.Ed. 666, is not prohibited by the commerce clause on which alone     taxpayer relies. United States Glue Co. v. Town of Oak Creek,     247 U.S. 321, 38 S.Ct. 499, 62 L.Ed. 1135; Underwood     Typewriter Co. v. Chamberlain, 254 U.S. 113, 119-(120), 41      S.Ct. 45, 46, 65 L.Ed. 165. * *  * ' (Emphasis added.) The first sentence of that quotation caused Mr. Justice Burton to say, in Spector Motor Service v. O'Connor, 340 U.S. 602, 609, note 6, 71 S.Ct. 508, 512, 95 L.Ed. 573, that the statement was 'not essential to the decision in the case.' But it is a mistake to say that Mr. Chief Justice Stone's language even comes near holding that exclusively interstate commerce may be taxed by a State. Note that he spoke of a foreign corporation 'having a commercial domicile' in the taxing State (315 U.S. 649, 62 S.Ct. 859). That connotes the conduct of intrastate commerce in the taxing State, such as was involved in the Fox case which he cited, i.e., the maintenance in the taxing State of the taxpayer's 'principal office' in which its principal officers were located and conducted their business, and where a duplicate stock ledger and the records of capital stock transactions of the taxpayer were continuously kept. Of course that conduct amounted to the doing of intrastate commerce, and naturally the State could tax that intrastate commerce. And that's all the State did in Fox. Interstate commerce was not taxed either in Beeler or in Fox.

The Court then cites Bass, Ratcliff & Gretton, Ltd. v. State Tax Commission, 266 U.S. 271, 45 S.Ct. 82, 69 L.Ed. 282, and Norfolk & W.R. Co. v. State of North Carolina, 297 U.S. 682, 56 S.Ct. 625, 80 L.Ed. 977. But from the Court's own recitals respecting those cases it appears that the taxpayers there 'carried on substantial local activities' within the taxing States, which permitted the States to lay taxes on that intrastate commerce, 'measured on a proportional formula.' Those cases are exactly in line with the United States Glue, Underwood, and Beeler cases. They did not sustain a state tax on exclusively interstate commerce.

The Court next cites this Court's percuriam in West Publishing Co. v. McColgan, 328 U.S. 823, 66 S.Ct. 1378, 90 L.Ed. 1603, and quotes from the California opinion, which was there affirmed, only the following: 'The employees were given space in the offices of attorneys in return for the use of plaintiff's books stored in such offices.' (27 Cal.2d 705, 166 P.2d 862) It will be seen by reference to the California opinion that the California court had found considerably more intrastate commerce. It had found that the taxpayer 'regularly employed solicitors in (that) state who * *  * were authorized to receive payments on orders taken by them, to collect delinquent accounts, and to make adjustments in case of complaints by customers, (and who) were given space in the offices of attorneys in return for the use of (the taxpayer's) books stored in such offices (which were) advertised as its local offices *  *  * .' 27 Cal.2d 705, 707, 166 P.2d 861, 862. That finding established the usual criteria which this Court has consistently held to constitute the doing of intrastate commerce. California determined and taxed only the amount of that intrastate commerce. It did not tax any interstate commerce. This Court in its per curiam affirmance cited the landmark Commerce Clause cases of United States Glue Co. v. Town of Oak Creek, supra; Memphis Natural Gas Co. v. Beeler, supra, and the landmark Due Process Clause case of International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. Surely this makes it clear that at least this Court did not sustain any tax on interstate commerce.

The Court's quotation from State of Wisconsin v. Minnesota Mining & Manufacturing Co., 311 U.S. 452, 61 S.Ct. 253, 254, 85 L.Ed. 274, shows on its face that Wisconsin there taxed only income 'attributable to earnings within the taxing state. * *  * '

Spector Motor Service v. O'Connor, 340 U.S. 602, 71 S.Ct. 508, 512, 95 L.Ed. 573, is quite consistent with the prior cases. There, by a process of elimination, the Court determined what the tax was not in arriving at what it was, and concluded that it was a tax which attached 'solely to the franchise of petitioner to do interstate business.' The Court then said:

'This Court heretofore has struck down, under the Commerce     Clause, state taxes upon the privilege of carrying on a      business that was exclusively interstate in character. The     constitutional infirmity of such a tax persists no matter how fairly it is apportioned to      business done within the state.' Citing Alpha Portland Cement      Co. v. Commonwealth of Massachusetts, 268 U.S. 203, 45 S.Ct. 477, 69 L.Ed. 916; Ozark Pipe Line Corp. v. Monier, 266 U.S.     555, 45 S.Ct. 184, 69 L.Ed. 439, and referring, for     comparison, to Interstate Oil Pipe Line Co. v. Stone, 337      U.S. 662, 669, 69 S.Ct. 1264, 1267, 93 L.Ed. 1613; Joseph v.     Carter & Weekes Stevedoring Co., 330 U.S. 422, 67 S.Ct. 815,     91 L.Ed. 993; Freeman v. Hewit, 329 U.S. 249, 67 S.Ct. 274,     91 L.Ed. 265.

'Our conclusion is not in conflict with the principle that,     where a taxpayer is engaged both in intrastate and interstate      commerce, a state may tax the privilege of carrying on      intrastate business and, within reasonable limits, may      compute the amount of the charge by applying the tax rate to      a fair proportion of the taxpayer's business done within the      state *  *  * .' 340 U.S. at pages 609-610, 71 S.Ct. at page     512.

It is not plain that this recent case holds that 'exclusively' interstate commerce may not be taxed by a State?

With this demonstration of the holdings in the commerce cases relied upon by the Court, surely we can repeat, with the conviction of demonstrated truth, our statement that none of the cases relied on by the Court supports its holding 'that net income from the interstate operations of a foreign corporation may be subjected to state taxation provided the levy is not discriminatory and is properly apportioned to local activities within the taxing State * *  * .' The fact that such taxes may be fairly or 'properly apportioned' is without legal consequence, for 'The constitutional infirmity of such a tax persists no matter how fairly it is apportioned to business done within the state.' Spector Motor Service v. O'Connor, supra, 340 U.S. at page 609, 71 S.Ct. at page 512. That this Court has always sustained state taxes on fairly determined amounts of intrastate income should be evident enough from the shown fact that it has struck them down only when there was none.

The Court says 'We believe that the rationale of these cases, involving income levies by States, controls the issues here.' I agree that the rationale of those cases controls the issues here. But I cannot agree that those cases involved like 'income levies by States.' They involved levies of income taxes on intrastate commerce, not on 'exclusively interstate commerce.' Whereas, here both the Minnesota and Georgia courts have found that the income taxed by those States had derived 'exclusively (from) interstate commerce,' and that the tax was not levied upon any intrastate commerce for there was none.

In these circumstances, I submit it is idle to say that the taxes were not laid 'on' interstate commerce, but on the taxpayer's general income after all commerce had ended, and, therefore, did not burden, nor hence regulate, interstate commerce. For in addition to the plainness of the fact, the courts of Minnesota and Georgia have explicitly held in these cases that the income involved was derived 'exclusively (from) interstate commerce,' and that the taxes were laid on that income. The taxes do not purport to have been, and could not have been, laid on any income derived from intrastate commerce in those States for there was none. It necessarily follows that the taxes were 'laid on income from (interstate commerce) because of its source,' Peck & Co. v. Lowe, supra, 247 U.S. at page 174, 38 S.Ct. at page 434, just as in Spector Motor Service v. O'Connor, supra.

The Commerce Clause denies state power to regulate interstate commerce. It vests that power exclusively in Congress. Direct taxation of 'exclusively interstate commerce' is a substantial regulation of it and, therefore, in the absence of congressional consent, the States may not directly tax it. This Court has so held every time the question has been presented here until today. Without congressional consent, the States of Minnesota and Georgia have laid taxes directly on what they admit was 'exclusively interstate commerce.' Hence, in my view, those levies plainly violated the Commerce Clause of the Constitution and cannot stand consistently therewith and with our prior cases. I would, therefore, reverse the judgment of the Supreme Court of Minnesota in No. 12 and affirm the judgment of the Supreme Court of Georgia in No. 33.