634 HARVARD LAW REVIEW INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY BY THE TAXING POWERS OF THE STATES.! VII II. Regulations of Interstate Commerce (conclttded) 2. Taxes not Discriminating Against Interstate Commerce {conQhided) C. Taxes on Acts, Occupations or Income (concluded) II. Taxes on Net Income As Sitch^' IT has already been disclosed that at the October, 191 7, Term the Supreme Court in United States Glue Co. v. Oak Creek * sanctioned the inclusion of income from interstate commerce in a general state income tax measured by net income from all sources. The difference "between a tax measured by gross receipts and one measured by net income" was said to afford "a convenient and workable basis of distinction between a direct and immediate bur- den upon the business affected and a charge that is only indirect and incidental." ^ The United States Glue Company was a domestic corporation; and in propounding and answering the question to be decided, Mr. Justice Pitney included that fact. After summarizing the provi- sions of the statute and their appUcation to the plaintiff, he said: "Stated concisely, the question is whether a State, in levying a gen- eral income tax upon the gains and profits of a domestic corporation, may include in the computation the net income derived from trans- actions in interstate commerce without contravening the commerce clause of the Constitution of the United States." * And the answer is stated as follows: "And so we hold that the Wisconsin income tax law, as applied to the plaintiff in the case before us, cannot be deemed to be so direct a ' For preceding instalments of this discussion see 31 Harv. L. Rev. 321-72 (Jan- uary, 1918); Ibid., 572-618 (February, 1918); Ibid., 721-78 (March, 1918); Ibid., 932-53 (May, 1918); 32 Harv. L. Rev. 234-65 (January, 1919); and Ibid., 374-416 (February, 19 19). ^ 247 U. S. 321, 38 Sup. Ct. Rep. 499 (1918). » 247 U. S. 321, 328, 38 Sup. Ct. Rep. 499 (1918).
- Ibid., 326.
