South Central Bell Telephone Co. v. Alabama

The basic question in this ease is whether tax Alabama assesses on foreign corporations violates the Commerce Clause. We conclude that it does.

I

Alabama requires each corporation doing State to pay a franchise tax based upon the firm's capital. A domestic firm, organized under the laws of Alabama, must pay tax in an amount equal to 1% of the par value of the firm’s stock. Ala. Const., Art. XII, §229; Ala. Code §40-14-40 (1993); App. to Pet. for Cert. 50a, 52a, 61a (Stipulated Facts). A foreign firm, organized under the laws of a State other than Alabama, must pay tax in an amount equal to 0.3%…