Edward Douglass White

“ It is also clear, however, that both the permit tax and the franchise tax exerted a power which the state undoubtedly possessed, that is, the authority to control the doing of business within the state by a foreign corporation and the right to tax the intrastate business of such corporation carried on as the result of permission to come in. ”

“ Ct. 268, 270 (39 L. Ed. 311) that 'the substance, and not the shadow, determines the validity of the exercise of the power.' In the second place, in making the inquiry stated in all of the cases, the compatibility of the statutes with the Constitution which was found to exist resulted from particular provisions contained in each of them which so qualified and restricted their operation and necessarily so limited their effect as to lead to such result. ”

“ The tax imposed therefor, if the permit was enjoyed for the stated period, could not in any event exceed $20 a year, whatever might be the amount of capital stock of the corporation
As early as 1893 what was denominated a franchise tax was provided, imposing upon each and every domestic as well as foreign corporation having a permit the duty of paying $10 a year. Acts of 1893, p. 158. In 1897 this described franchise tax was modified. Acts of 1897, p. 168. As to domestic corporations, while retaining the minimum charge of $10, the maximum was raised to $50. ”

“ In the first place it is apparent in each of the cases that as the statutes under consideration were found not to be on their face inherently repugnant either to the commerce or due process clause of the Constitution, it came to be considered whether by their necessary operation and effect they were repugnant to the Constitution in the particulars stated, and this inquiry it was expressly pointed out was to be governed by the rule long ago announced in Postal Telegraph Cable Co. ”

“ Such agencies also became supply depots from which interstate commerce was carried on by filling orders received from other states.
In the state of Texas for the purpose of facilitating the carrying on of its business by all the methods stated, the company acquired real estate at Dallas, and built a depot or warehouse, and also had a warehouse at another place in the state. ”

“ In the same year in which the legislation was enacted providing for the taxation on the basis of surplus and undivided profits for the purpose of the franchise tax there was also enacted a law vastly increasing the amount of the permit tax. Acts of 1907, S. S., p. 500; Revised Statutes (1911) art. ”