In estimating for taxation the proportion of income of a
corporation doing interstate business, a state cannot include
income from investments in bonds and lands outside of the state.
Fargo v. Hart, 193 U. S. 490.
The Oklahoma tax on gross revenue of corporations of 1910, as
far as it affects express companies, is not a property tax, but a
tax on all revenue, including that received from interstate
commerce, and as such is an unconstitutional burden on interstate
commerce.
Galveston, Harrisburg & San Antonio Ry. Co. v.
Texas, 210 U. S. 217.
Where a state statute requires that a corporation doing both
interstate and intrastate business return it gross receipts from
all sources, the taxing feature of the statute cannot be construed
as relating only to receipts from intrastate commerce and sustained
separately in that respect.
Complainant in an equity suit to restrain the collection of a
state tax on gross receipts on the ground that the act is
unconstitutional because it includes receipts from interstate
commerce is not bound, in order to maintain the bill, to tender so
much a would have fallen on intrastate receipts.
People's Bank
v. Marye, 191 U. S. 272,
distinguished.
The court cannot reshape a taxing statute which includes element
beyond the state's power of taxation simply because it embraces
elements that it might have reached had the statute been drawn with
a different measure and intent.
Page 223 U. S. 299
The facts, which involve the constitutionality of provisions of
the statute of 1910 of the State of Oklahoma imposing a revenue tax
upon receipts of express companies, are stated in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill for an injunction against a tax alleged to be
unconstitutional as a regulation of commerce among the states. Upon
demurrer, three judges sitting in the circuit court granted the
injunction, and the defendant appealed to this Court. The statute
in question is entitled, "An Act Providing for the Levy and
Collection of a Gross Revenue Tax from Public Service corporations
in This state," and from persons engaged in certain mining and
similar occupations. By § 2:
"Every corporation hereinafter named shall pay the state a gross
revenue tax . . . which shall be in addition to the taxes levied
and collected upon an
ad valorem basis upon the property
and assets of such corporation equal to the percentum of the gross
receipts hereinafter provided, if such public service corporation
operate wholly within the state, and if such public service
corporation operate partly within and partly without the state, it
shall pay tax equal to such proportion of said percentum of its
gross receipts as the portion of its business done within the state
bears to the whole of its business,"
with a proviso for fixing a different proportion if it
"more fairly represents the proportion which
Page 223 U. S. 300
the gross receipts of any such public service corporation for
any year within this state bear to its total gross receipts."
By § 3, the percentum to be paid by express companies (such as
the plaintiff is) is three percent of the gross receipts, and, "for
the purpose of determining the amount of such tax," they are
required to report under oath the gross receipts "from every source
whatsoever."
The plaintiff's receipts are largely from commerce among the
states, and it also receives large sums as income from investments
in bonds and land all outside the State of Oklahoma. So that it is
evident that, if the tax is what it calls itself, it is bad on the
former ground, and that, whatever it is, it is bad on the latter.
Fargo v. Hart, 193 U. S. 490. In
that case, the tax was proportioned to mileage, and it was held
that it could not be sustained when, although purporting to be a
tax on property, it took into account, in order to increase
proportionately the value of the mileage within the state, valuable
property outside of it. The same principle would apply to a
property tax measuring the total property by the total gross
receipts, increased by the special outside sources of income, and
taxing a proportion of this total fixed by the ratio of business
within the state to that outside. But we see no warrant for calling
the tax a property tax. It is so similar to the Texas statute held
bad in
Galveston, Harrisburg & San Antonio Ry. Co. v.
Texas, 210 U. S. 217, as
to show that, if one is not copied from the other, they have a
common source. It would be possible only by some extraordinary turn
of ingenuity to sustain this after condemning that.
It was argued in some detail that, taking into account the rest
of the act and other statutes passed later at the same session,
this really was a property tax. But the scope and purport of the
act, so far as it affects express companies, are too obvious to
admit such a view. The tax is "in addition to the taxes levied and
collected upon
Page 223 U. S. 301
an
ad valorem basis." Even if we read the words which
follow without a comma,
viz., "upon the property and
assets of such corporation," as not qualifying those which
immediately precede, but as attempting to characterize the "gross
revenue tax" as a tax on such property and assets, nevertheless all
the property and assets are the subject of the
ad valorem
taxes referred to. Therefore this tax cannot be an attempt to reach
the value of what is by the law to be valued and taxed in a
different way. It would be difficult to apply to a tax levied in
these days the explanation of
Maine v. Grand Trunk Ry.
Co., 142 U. S. 217,
given in
Galveston, Harrisburg & San Antonio Ry. Co. v.
Texas, 210 U. S. 217,
210 U. S. 226;
Flint v Stone Tracy Co., 220 U. S. 107,
220 U. S.
162-165, and to suppose it intended to reach only the
additional value given by its being part of a going concern to
property already taxed in its separate items. There is nothing
sufficient to indicate such a limitation, and, for the reasons
given above, on the authority of
Fargo v. Hart, supra, it
is plain that the gross receipts from all sources could not have
been used as a means for estimating the going value of the property
in the state. We may add in this connection that this same
requirement as to the total gross receipts shows that it is
impossible to save the constitutionality of the act by construing
it as referring only to the receipts from commerce wholly within
the state.
We do not gather that the appellant has any objection to testing
the validity of this tax in an equity suit, or that any such
objection was made below.
Brown v. Lake Superior Iron Co.,
134 U. S. 530.
Therefore we do not consider whether there are any facts to take
the case out of the general rule established by the cases collected
in
Boise Artesian Hot & Cold Water Co. v. Boise City,
213 U. S. 276.
See Ludwig v. Western Union Telegraph Co., 216 U.
S. 146;
Western Union Telegraph Co. v. Andrews,
216 U. S. 165. It
was objected, however, that
Page 223 U. S. 302
the bill cannot be maintained for want of a tender of so much of
the tax as would have fallen on the receipts from commerce wholly
within the state. But that requirement hardly can be made in this
case, which is not like one where the law simply fails to allow
certain proper deductions.
People's National Bank v.
Marye, 191 U. S. 272.
Whether the statute could be construed as separable, of course,
would be ultimately for the state court in any event.
Western
Union Telegraph Co. v. Texas, 105 U.
S. 460. But we see no possible construction on which it
could be upheld without being so remodeled that it would be a mere
speculation whether the legislature would have passed it in the new
form. For, to recur to the statute, it is not simply a tax on all
gross receipts within the state, which possibly might be read as
intended to reach such receipts as it could, even if less than all
(
Ratterman v. Western Union Telegraph Co., 127 U.
S. 411); it is a tax on a proportion of total gross
receipts a considerable part of which, as we have explained, the
state has no right to tax. Neither the court below nor this Court
can reshape the statute simply because it embraces elements that it
might have reached if it had been drawn with a different measure
and intent.
Decree affirmed.