An Ohio statute required foreign corporations doing business within the state to pay an ad valorem tax on accounts receivable which arose through outstate sales of goods shipped from warehouses within the state, even though the sales were consummated by an agent maintaining his office without the state. Such intangibles were declared by the Ohio statutory formula to have a situs within the state. At the same time, the accounts receivable of Ohio residents and domestic corporations which were derived from outstate sales by agents having their offices without the state were exempt, even though the goods were shipped from stockpiles within the state. Such intangibles were declared to have a situs without the state and purportedly-left subject to the taxing power of other states by a provision for "reciprocity" in the statute. The appellants, two foreign corporations doing business in Ohio, objected to assessment of certain intangibles by the state tax commissioner pursuant to the statute. Their contention that the statute was violative of the Federal Constitution was rejected and the assessment affirmed by the Board of Tax Appeals and the Ohio Supreme Court. On appeal to the Supreme Court of the United States, held, reversed. The action of a state in subjecting the intangibles of a foreign corporation to taxation while exempting those of domestic corporations amounts to a denial of equal protection of the laws. Two justices dissented. Wheeling Steel Corporation v. Glander, (U.S. 1949) 69 S.Ct. 1291.
Robert P. Griffin S.Ed.,
CONSTITUTIONAL LAW-EQUAL PROTECTION-FOREIGN CORPORATIONS-DISCRIMINATORY INTANGIBLES TAX,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol48/iss2/9