The state of California adopted a franchise tax which was based upon the corporations' net income apportioned according to "that portion which is derived from business done within the State." When this was construed to include not merely the income from intrastate business alone, but rather the income from both this and from all interstate and foreign business attributable to California, its enforcement was resisted upon the grounds that (1) so construed it was repugnant to the commerce clause upon the theory that it burdened interstate and foreign commerce, (2) it violated the due process clause upon the theory that the income here taxed in excess of that derived solely from intrastate business had no relation to the state franchise, and (3) it denied the equal protection of the laws since corporations engaged exclusively in interstate and foreign commerce were not taxed at all upon this disputed portion of their income. Held, that the state tax was not repugnant to any of these constitutional provisions. Matson Navigation Co. v. State Board of Equalization of the State of California, (U.S. 1936) 56 S. Ct. 553.
CONSTITUTIONAL LAW - FRANCHISE TAX - BURDEN UPON INTERSTATE AND FOREIGN COMMERCE - DUE PROCESS - EQUAL PROTECTION OF THE LAWS,
Mich. L. Rev.
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