66o HARVARD LAW REVIEW United States Glue Co. v. Oak Creek ^^ — the same controversy which presented the income-tax problem to the United States Supreme Court. The Wisconsin law aimed to tax no "business income" that was not earned within the state, whether received by residents or non-residents.^^ The United States Glue Company did not contest before the state court the taxability of its income from rentals and intangibles,^^ nor does the case state the sources from which such income was derived. The matter in controversy was the income from sales. With the contention that such in- come was not taxable because of the commerce clause, we are no »" i6i Wis. 211, 153 N. W. 241 (1915). " Wisconsin Statutes (1915), chap. 48 a, § 1087 m-2 (3). "With respect to other income, persons engaged in business within and without the state shall be taxed only upon such income as is derived from business transacted and property located within the state, which may be determined by an allocation and separate accounting for such income when made in form and manner prescribed by the tax commission, but other- wise shall be determined in the manner specified in subsection (e) of subsection 7 of section 17706 of the statutes, as far as apphcable." The section referred to pre- scribed a form of "unit rule," which appUed the ratio between the sum of the gross business in dollars plus the value of the property in dollars within the state to an aggregate of the same two elements in all the states in which business was done. New York has a somewhat more complicated rule of apportionment for its corpo- rate income tax. In getting its ratio it takes account of the aggregate of the average monthly value of real property, chattels, bills and accounts receivable, and stocks of other corporations within the state and the aggregate of the same elements in all the states. Laws of New York, 1918, chap. 417, § 214 (vol. 2, 1262); Birdseye's Con- solidated Laws of New York, 1918 Supplement, 661. In the Wisconsin cases which have been found, the ratio method was not employed. In the Oak Creek case, specific consideration was given to the income from various sources. In State ex rel. Brenk v. Widule, 161 Wis. 396, 154 N. W. 696 (19x5), an inheritance of foreign realty was held to be from sources without the state, and there- fore the court did not decide whether it was "income" within the meaning of the statute. In State ex rel. Arpin v. Eberhardt, 158 Wis. 20, 147 N. W. 1016 (1914), income received by a resident from a partnership whose business and property was wholly without the state was held not taxable imder the statute. In commenting on the statute. Judge Barnes said: "Certain considerations occur to us which might have induced the legislature to refrain from'taxing income derived from sources without the state except as specified.. It was no doubt the desire of the legislature to prevent the loan or investment of moneys without the state for the purpose of receiving a fixed return for the invest- ment made so as to avoid the payment of a tax on this species of property. The property of this firm was taxable in the state where located. If incomes were taxed in that state, the income would also, in all probability, be taxed there. If the income were taxed here, it might be doubly taxed. Conceding the right to impose such double taxation, the legislature might well feel that it would not be just to do so. Other considerations might be mentioned, but those suggested should suffice." 158 Wis". 20; 23-24. 92 jgj ^js 21 ij 215 (1915).
