although what a tax is called is entitled to weight, the nature of the tax depends not on its label, but on its practical effect and operation
How later courts described this case
- although what a tax is called is entitled to weight, the nature of the tax depends not on its label, but on its practical effect and operation
- “[I]n the last analysis the nature of the tax depends not upon its label, but upon its incidence, i.e., its practical operation and effect.”
Written by the judges who cited it.
The opinion
Concurring Opinion by
Mr. Justice Cohen :
The United States Supreme Court’s decision in Northwestern States Portland Cement Co. v. State of Minnesota and T. V. Williams, Commissioner v. Stochkham Valves & Fittings, Inc., 358 U. S. 450 (1959) in both of which the Supreme Court concluded that “. . . net income from the interstate operations of a foreign corporation may be subjected to State taxation provided the levy is not discriminatory and is properly apportioned to local activities within the taxing State forming sufficient nexus to support the same” created so much concern and uncertainty that Congress passed Public Law 86-272 : 73 Stat. 555 approved September 14, 1959 titled “An act relating to the power of the States to impose net income taxes on income derived from interstate commerce. . . .”
This Act of Congress in no way restricts the imposition of the tax as provided for by Pennsylvania’s Corporation Income Tax Law of 1951, and, in fact, substantiates the majority’s conclusion that the tax is both constitutional and applicable to the litigants in the instant cases.