INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 649 verbal defect was forgiven in these cases, there is no apparent com- mon-sense reason why it should not be forgiven in West Virginia's excise on corporations. Once it is granted that a tax on the net income of all corporations need not loose its hold when it comes to income from interstate commerce, even though such income is all that a complaining foreign corporation receives, there is no sub- stantial ground for sparing such income because the tax calls itself an excise on doing business rather than a tax "on net income re- ceived by corporations." It is to be anticipated, therefore, that the Supreme Court, if it determines to treat a tax on corporate income in the same way that it regarded Wisconsin's tax on all in- come, will find little difficulty in taking the further step that a tax, though formally on the business itself, is substantially on the net income from that business and is therefore entitled to the same consideration that would be bestowed on a tax designated as one on such net income. There remains for consideration the bearing of the commerce clause on complaints of the vice of extra-territoriality in the assess- ment of an income tax. It has already been suggested that the legal status of the recipient of income may be a factor in cases where it is objected that a state has levied on income from extra- state sources or on income to which extra-state activities have con- tributed. In dealing with such complaints it will be necessary to determine what basis or bases of jurisdiction underlie the imposi- tion of income taxes. The Western Union case and those follow- ing it estabUsh that the taxation of foreign corporations engaged in interstate commerce by a method which takes account of extra- state values is an invalid regulation of interstate commerce as well as a denial of due process of law. This doctrine must apply to taxes on income or to taxes measured by income as forcibly as to taxes measured by property. Plainly foreign corporations engaged wholly or partly in interstate commerce can insist that extra-state income as well as extra-state property is beyond the reach of the state by direct or indirect action. What can be done with foreign corporations engaged exclusively in local business does not fall strictly within the scope of this study, although the cases that have been reviewed are the ones which throw light on the problem. If Horn Silver Mining Co. v. New York ^ " 143 U. S. 305, 12 Sup. Ct. Rep. 403 (1892).
