On February 24, 1959, the Supreme Court of the United States, in companion cases, held, by a 6-3 vote, that a state could levy a properly apportioned tax on the net income of a corporation doing a purely interstate business, provided there were sufficient "activities" within the state to justify a tax. NorthwesternStates PortlandCement Co. v. Minnesota, and Commissioner v. Stockham Valves and Fittings, Inc. Were this article a movie script, I would begin by portraying the separate meetings of two groups: the hastily summoned executive committee of the National Association of Manufacturers gravely, but vigorously, exploring means of avoiding the new menace; jubilant state tax collectors eagerly planning (between sips from long-stemmed glasses) how best to construct this new pipeline into state coffers.The passage of time may reveal that some interstate manufacturers and sellers will find their net profits increased because of this decision and that not all states will find their net tax yield increased.
Harry L. Snead Jr.,
State Taxation of the Net Income from Interstate Business,
U. Rich. L. Rev.
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