Louis Brandeis

“ As the state treats the operated property as the entity, it does not concern itself with interest charges and the rentals paid, just as it does not concern itself with a mortgage upon the real estate when it lays the ad valorem tax. On the other hand, as the Seaboard treats the company-the person-as the entity to be taxed, it undertakes to ascertain the net income of the company. This includes as gross income, a proportion of the receipts from property not within the state and includes among the deductions from the gross income of the company, the capital charges. ”

“ Hire of freight cars might have been treated in the same way, but the state, for reasons satisfactory to it, permitted that financial charge to be deducted, and to that extent reduced the tax.↑ The term 'net income,' in law or in economics, has not a rigid meaning. Every Income Tax Act necessarily defines what is included in gross income; what deductions are to be made from the gross to ascertain net income; and what part, if any, of the net income, is exempt from taxation. ”

“ It does not discriminate against interstate commerce. For the taxable net income of other public service corporations which are wholly intrastate is determined also without allowing capital charges as a deduction. ”