Page:Harvard Law Review Volume 32.djvu/670

634 634 HARVARD LAW REVIEW INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY BY THE TAXING POWERS OF THE STATES.! VII II. Regulations of Interstate Commerce (conclttded) 2. Taxes not Discriminating Against Interstate Commerce {conQhided) C. Taxes on Acts, Occupations or Income (concluded) II. Taxes on Net Income ''As Sitch^' IT has already been disclosed that at the October, 191 7, Term the Supreme Court in United States Glue Co. v. Oak Creek * sanctioned the inclusion of income from interstate commerce in a general state income tax measured by net income from all sources. The difference "between a tax measured by gross receipts and one measured by net income" was said to afford "a convenient and workable basis of distinction between a direct and immediate bur- den upon the business affected and a charge that is only indirect and incidental." ^ The United States Glue Company was a domestic corporation; and in propounding and answering the question to be decided, Mr. Justice Pitney included that fact. After summarizing the provi- sions of the statute and their appUcation to the plaintiff, he said: "Stated concisely, the question is whether a State, in levying a gen- eral income tax upon the gains and profits of a domestic corporation, may include in the computation the net income derived from trans- actions in interstate commerce without contravening the commerce clause of the Constitution of the United States." * And the answer is stated as follows: "And so we hold that the Wisconsin income tax law, as applied to the plaintiff in the case before us, cannot be deemed to be so direct a ' For preceding instalments of this discussion see 31 Harv. L. Rev. 321-72 (Jan- uary, 1918); Ibid., 572-618 (February, 1918); Ibid., 721-78 (March, 1918); Ibid., 932-53 (May, 1918); 32 Harv. L. Rev. 234-65 (January, 1919); and Ibid., 374-416 (February, 19 19). ^ 247 U. S. 321, 38 Sup. Ct. Rep. 499 (1918). » 247 U. S. 321, 328, 38 Sup. Ct. Rep. 499 (1918).
 * Ibid., 326.