Mahlon Pitney

“ And we beem it clear, upon principle as well as authority, that just as a state may impose general income taxes upon its own citizens and residents whose persons are subject to its control, it may, as a necessary consequence, levy a duty of like character, and not more onerous in its effect, upon incomes accruing to nonresidents from their property or business within the state, or their occupations carried on therein, enforcing payment, so far as it can, by the exercise of a just control over persons and property within its borders. ”

“ It is contended that payment of the gross production tax relieves the producer from the payment of the income tax. This is a question of state law, upon which no controlling decision by the Supreme Court of the state is cited. We overrule the contention, deeming it clear, as a matter of construction, that the gross production tax was intended as a substitute for the ad valorem property tax but not for the income tax, and that there is no such repugnance between it and the income tax as to produce a repeal by implication. ”

“ The practical burden of a tax imposed upon the net income derived by a nonresident from a business carried on within the state certainly is no greater than that of a tax upon the conduct of the business, and this the state has the lawful power to impose, as we have seen. ”

“ This radical contention is easily answered by reference to fundamental principles. In our system of government the states have general dominion, and, saving as restricted by particular provisions of the federal Constitution, complete dominion over all persons, property, and business transaction within their borders; they assume and perform the duty of preserving and protecting all such persons, property, and business, and, in consequence, have the power normally pertaining to governments to resort to all reasonable forms of taxation in order to defray the governmental expenses. ”

“ On the contrary, the very fact that a citizen of one state has the right to hold property or carry on an occupation or business in another is a very reasonable ground for subjecting such nonresident, although not personally, yet to the extent of his property held, or his occupation or business carried on therein, to a duty to pay taxes not more onerous in effect than those imposed under like circumstances upon citizens of the latter state. Section 2 of article 4 of the Constitution entitles him to the privilege and immunities of a citizen, but no more ”

“ The fact that it required the personal skill and management of appellant to bring his income from producing property in Oklahoma to fruition, and that his management was exerted from his place of business in another state, did not deprive Oklahoma of jurisdiction to tax the income which arose within its own borders. The personal element cannot, by any fiction, oust the jurisdiction of the state within which the income actually arises and whose authority over it operates in rem. ”

“ As to residents it may, and does, exert its taxing power over their income from all sources, whether within or without the state, and it accords to them a corresponding privilege of deducting their losses, wherever these accrue. As to nonresidents, the jurisdiction extends only to their property owned within the state and their business, trade, or profession carried on therein, and the tax is only on such income as is derived from those sources. ”

“ In well-ordered society property has value chiefly for what it is capable of producing, and the activities of mankind are devoted largely to making recurrent gains from the use and development of property, from tillage, mining, manufacture, from the employment of human skill and labor, or from a combination of some of these ”

“ The Constitution of Oklahoma, besides providing for the annual taxation of all property in the state upon an ad valorem basis, authorizes (article 10, § 12) the employment of a variety of other means for raising revenue, among them income taxes. ”

“ He also insists that the lien attempted to be imposed upon his property pursuant to section 11 for taxes assessed upon income not arising out of the same property would deprive him of property without due process of law.
As ground for resorting to equity, the bill alleges that plaintiff is the owner of various oil and gas mining leases covering lands in Creek county, Okl., and that the lien asserted thereon by virtue of the levy and tax warrant creates a cloud upon his title. ”

“ Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88) , unless the contention that he has a plain, adequate, and complete remedy at law be well founded.
This contention is based, first, upon the provision of section 9 of chapter 164, giving to the state auditor the same power to correct and adjust an assessment of income that is given to the county board of equalization in cases of ad valorem assessments, taken in connection with chapter 107 of the Laws of 1915, which provides (article 1, subd. B, § 2) for an appeal from that board to the district court of the county. ”

“ Pennsylvania, 245 U.S. 292, 38 Sup. Ct. 126, 62 L. Ed. 295; but only upon the net proceeds, and is plainly sustainable, even if it includes net gains from interstate commerce. U.S. Glue C. v. Oak Creek, 247 U.S. 321, 38 Sup. ”