INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 647 were foreign corporations engaged exclusively in interstate com- merce, it would seem to follow that they and those like them are similarly immune from West Virginia's excise on corporations. It cannot be said of this tax, as Mr. Justice Pitney said of the Wis- consin income tax, that "such a tax, when imposed upon net incomes from whatever source arising, is but a method of distrib- uting the cost of government, like a tax upon property, or upon franchises treated as property." ^^ The subject taxed is not in- come, but doing business in corporate form. The tax does not fall on "net incomes from whatever source arising," but only on net incomes arising from the exercise of corporate functions. When those functions are exclusively interstate commerce, and the cor- poration is foreign rather than domestic, a tax on the exercise of those functions is called a tax "on interstate commerce itself," and therefore without the fold of state power. There can be no question that this is a correct statement of the law to be induced from the Supreme Court decisions to date. Whether the law will continue as it now is does not admit of the same confident assertion. If we assume that foreign corporations engaged exclusively in interstate commerce may be subjected to a gerieral state tax on net income,^^ and that foreign corporations engaged in combined local and interstate commerce cannot exclude interstate income from a state excise on all corporations measured by their net income from all business within the state,^^ there seems no reason in sense or in economics why a foreign corporation engaged exclusively in interstate commerce should be relieved from an excise imposed equally on all corporations. Their interstate income should be no more sacrosanct than is that of the foreign corporations which are fortunate or unfortunate enough to enjoy some local income in addition. But the West Virginia statute calls its exactions on corporations "an annual special excise tax for the privilege of carrying on or doing business in the state ";^^ and under all the law that we know from existing cases the privilege of carrying on interstate commerce alone or the doing of interstate business alone is not a taxable subject. West Virginia does not impose its tax "on net income" received by corporations, but "on " Cit. supra, note 9. *^ See supra, pages 636-39.
- ^ See supra, pages 645-46.
- ' The West Virginia statute is quoted more at length in 31 Harv. L. Rev. 761.
