General Motors Corp. v. Washington, 377 U.S. 436 (1964)

Topics:  General Motors

From the U.S. Government Printing Office via GPO Access
 
Case:   GENERAL MOTORS CORP. V. WASHINGTON 

Case #: 377US436


NO. 115.  ARGUED FEBRUARY 26, 1964.  - DECIDED JUNE 8, 1964.  - 60 WASH.
2D 862, 376 P.2D 843, AFFIRMED. 


APPELLANT, A DELAWARE CORPORATION, MANUFACTURES MOTOR VEHICLES AND
PARTS OUTSIDE THE STATE OF WASHINGTON SOME OF WHICH IT SELLS TO RETAIL
DEALERS IN THAT STATE.  IT OPERATES THROUGH SUBSTANTIALLY INDEPENDENT
"DIVISIONS," HERE THREE AUTOMOTIVE AND ONE PARTS, ALL BUT THE LATTER
MAINTAINING ZONE OFFICES IN OREGON WHICH HANDLE SALES AND OTHER ORDERS
FROM DEALERS IN WASHINGTON.  SALES ORIGINATE THROUGH PROJECTION OF
ORDERS OF ESTIMATED NEEDS, FOR PRACTICAL PURPOSES "A PURCHASE ORDER,"
WORKED OUT BETWEEN THE DEALERS AND THE CORPORATION'S DISTRICT MANAGERS
WHO CONDUCT BUSINESS FROM THEIR HOMES IN WASHINGTON AND CONSTANTLY CALL
UPON DEALERS, ASSISTING IN SALES PROMOTION, TRAINING OF SALESMEN, ETC.;
SERVICE CONTACTS ARE MAINTAINED THROUGH SERVICE REPRESENTATIVES.  ONE
AUTOMOTIVE DIVISION HAS A SMALL BRANCH OFFICE IN WASHINGTON TO EXPEDITE
DELIVERY OF CARS FOR DEALERS IN ALL BUT NINE COUNTIES.  DURING THE
PERTINENT PERIOD, THE AUTOMOTIVE AND PARTS DIVISIONS HAD ABOUT 40
EMPLOYEES RESIDENT OR PRINCIPALLY EMPLOYED IN THE STATE.  IN ADDITION,
OUT-OF-STATE ZONE OFFICE PERSONNEL VISITED DEALERS IN THE STATE FROM
TIME TO TIME.  THE PARTS DIVISION MAINTAINS WAREHOUSES IN OREGON AND
WASHINGTON FROM WHICH ORDERS FROM WASHINGTON DEALERS ARE FILLED (THOUGH
ONLY THE TAX ON OREGON SHIPMENTS IS PROTESTED).  APPELLANT CLAIMS THAT
ITS PRODUCTS TAXED BY WASHINGTON ARE MANUFACTURED IN ST. LOUIS, WHICH
LEVIES A LICENSE TAX MEASURED BY SALES BEFORE SHIPMENT.  THIS
LITIGATION ARISES FROM APPLICATION OF WASHINGTON'S TAX ON THE PRIVILEGE
OF DOING BUSINESS IN THE STATE MEASURED BY THE WHOLESALE SALES OF
APPELLANT WITHIN THE STATE.  APPELLANT CONTENDED THAT IT CONSTITUTED A
TAX ON UNAPPORTIONED GROSS RECEIPTS IN VIOLATION OF THE COMMERCE AND
DUE PROCESS CLAUSES.  THE LOWER COURT UPHELD THIS VIEW EXCEPT FOR SOME
OF THE BUSINESS CONDUCTED FROM APPELLANT'S LOCAL BRANCH OFFICE.  THE
STATE SUPREME COURT REVERSED, HOLDING THAT ALL APPELLANT'S ACTIVITIES
IN THE STATE WERE SUBJECT TO THE TAX WHICH WAS MEASURED BY ITS
WHOLESALE SALES AND WAS FOUND TO BEAR A REASONABLE RELATION TO
APPELLANT'S IN-STATE ACTIVITIES.  HELD: 

1.  THOUGH INTERSTATE COMMERCE CANNOT BE SUBJECTED TO THE BURDENS OF
MULTIPLE TAXATION, A TAX MEASURED BY GROSS RECEIPTS IS CONSTITUTIONALLY
PROPER IF FAIRLY APPORTIONED.  PP. 439-440. 

2.  THE BURDEN OF ESTABLISHING EXEMPTION FROM A TAX RESTS UPON A
TAXPAYER CLAIMING IMMUNITY THEREFROM.  NORTON CO. V. DEPARTMENT OF
REVENUE, 340 U.S. 534, FOLLOWED.  P. 441. 

3.  THE BUNDLE OF APPELLANT'S CORPORATE ACTIVITIES OR "INCIDENTS" IN
WASHINGTON AFFORDED THE STATE A PROPER BASIS FOR IMPOSING A TAX.  PP.
442-448. 

4.  THE EVIDENCE WAS SUFFICIENT TO WARRANT THE FINDING BY THE STATE
COURT OF A NEXUS BETWEEN APPELLANT'S IN-STATE ACTIVITIES AND ITS SALES
THERE, ESPECIALLY WHERE ITS TAXABLE BUSINESS WAS SO ENMESHED WITH WHAT
IT CLAIMED WAS NONTAXABLE.  P. 448. 

5.  THIS COURT DOES NOT PASS UPON APPELLANT'S CLAIM OF "MULTIPLE
TAXATION" IN VIOLATION OF THE COMMERCE CLAUSE BECAUSE APPELLANT DID NOT
SHOW WHAT DEFINITE BURDEN IN A CONSTITUTIONAL SENSE THE ST. LOUIS TAX
PLACES ON THE IDENTICAL INTERSTATE SHIPMENTS BY WHICH WASHINGTON
MEASURES ITS TAX OR THAT OREGON LEVIES ANY TAX ON APPELLANT'S ACTIVITY
BEARING ON WASHINGTON SALES.  PP. 448-449. 

GENERAL MOTORS CORP. V. WASHINGTON ET AL. 

APPEAL FROM THE SUPREME COURT OF WASHINGTON. 

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT. 

THIS APPEAL TESTS THE CONSTITUTIONAL VALIDITY, UNDER THE COMMERCE AND
DUE PROCESS CLAUSES, OF WASHINGTON'S TAX IMPOSED UPON THE PRIVILEGE OF
ENGAGING IN BUSINESS ACTIVITIES WITHIN THE STATE.  (FN1)  THE TAX IS
MEASURED BY THE APPELLANT'S GROSS WHOLESALE SALES OF MOTOR VEHICLES,
PARTS AND ACCESSORIES DELIVERED IN THE STATE.  APPELLANT CLAIMS THAT
THE TAX IS LEVIED ON UNAPPORTIONED GROSS RECEIPTS FROM SUCH SALES AND
IS, THEREFORE, A TAX ON THE PRIVILEGE OF ENGAGING IN INTERSTATE
COMMERCE; IS INHERENTLY DISCRIMINATORY; RESULTS IN THE IMPOSITION OF A
MULTIPLE TAX BURDEN; AND IS A DEPRIVATION OF PROPERTY WITHOUT DUE
PROCESS OF LAW.  THE WASHINGTON SUPERIOR COURT HELD THAT THE PRESENCE
OF A BRANCH OFFICE IN SEATTLE RENDERED SOME OF THE CHEVROLET
TRANSACTIONS SUBJECT TO TAX, BUT, AS TO THE REMAINDER, HELD THAT THE
APPLICATION OF THE STATUTE WOULD BE REPUGNANT TO THE COMMERCE AND THE
DUE PROCESS CLAUSES OF THE UNITED STATES CONSTITUTION.  ON APPEAL, THE
SUPREME COURT OF WASHINGTON REVERSED THE LATTER FINDING, HOLDING THAT
ALL OF THE APPELLANT'S TRANSACTIONS WERE SUBJECT TO THE TAX ON THE
GROUND THAT THE TAX BORE A REASONABLE RELATION TO THE APPELLANT'S
ACTIVITIES WITHIN THE STATE.  60 WASH. 2D 862, 376 P.2D 843.  PROBABLE
JURISDICTION WAS NOTED.  374 U.S. 824.  WE HAVE CONCLUDED THAT THE TAX
IS LEVIED ON THE INCIDENTS OF A SUBSTANTIAL LOCAL BUSINESS IN
WASHINGTON AND IS CONSTITUTIONALLY VALID AND, THEREFORE, AFFIRM THE
JUDGMENT. 

         I. 

WE START WITH THE PROPOSITION THAT "IT WAS NOT THE PURPOSE OF THE
COMMERCE CLAUSE TO RELIEVE THOSE ENGAGED IN INTERSTATE COMMERCE FROM
THEIR JUST SHARE OF STATE TAX BURDEN EVEN THOUGH IT INCREASES THE COST
OF DOING THE BUSINESS."  WESTERN LIVE STOCK V. BUREAU OF REVENUE, 303
U.S. 250, 254 (1938).   "EVEN INTERSTATE BUSINESS MUST PAY ITS WAY,"
POSTAL TELEGRAPH-CABLE CO. V. RICHMOND, 249 U.S. 252, 259 (1919), AS IS
EVIDENCED BY NUMEROUS OPINIONS OF THIS COURT.  FOR EXAMPLE, THE COURT
HAS APPROVED PROPERTY TAXES ON THE INSTRUMENTS EMPLOYED IN COMMERCE,
WESTERN UNION TELEGRAPH CO. V. ATTORNEY GENERAL, 125 U.S. 530 (1888);
ON PROPERTY DEVOTED TO INTERSTATE TRANSPORTATION FAIRLY APPORTIONED TO
ITS USE WITHIN THE STATE, PULLMAN'S PALACE CAR CO. V. PENNSYLVANIA, 141
U.S. 18 (1891); ON PROFITS DERIVED FROM FOREIGN OR INTERSTATE COMMERCE
BY WAY OF A NET INCOME TAX, WILLIAM E. PECK & CO. V. LOWE, 247 U.S. 165
(1918), AND UNITED STATES GLUE CO. V. OAK CREEK, 247 U.S. 321 (1918);
BY FRANCHISE TAXES, MEASURED BY THE NET INCOME OF A COMMERCIALLY
DOMICILED CORPORATION FROM INTERSTATE COMMERCE ATTRIBUTABLE TO BUSINESS
DONE IN THE STATE AND FAIRLY APPORTIONED, UNDERWOOD TYPEWRITER CO. V.
CHAMBERLAIN, 254 U.S. 113 (1920); BY A FRANCHISE TAX MEASURED ON A
PROPORTIONAL FORMULA ON PROFITS OF A UNITARY BUSINESS MANUFACTURING AND
SELLING ALE, "THE PROCESS OF MANUFACTURING RESULTING IN NO PROFITS
UNTIL IT ENDS IN SALES," BASS, RATCLIFF & GRETTON, LTD., V. STATE TAX
COMM'N, 266 U.S. 271, 282 (1924); BY A PERSONAL PROPERTY TAX BY A
DOMICILIARY STATE ON A FLEET OF AIRPLANES WHOSE HOME PORT WAS IN THE
TAXING STATE, DESPITE THE FACT THAT PERSONAL PROPERTY TAXES WERE PAID
ON PART OF THE FLEET IN OTHER STATES, NORTHWEST AIRLINES, INC., V.
MINNESOTA, 322 U.S. 292 (1944); BY A NET INCOME TAX ON REVENUES DERIVED
FROM INTERSTATE COMMERCE WHERE FAIRLY APPORTIONED TO BUSINESS
ACTIVITIES WITHIN THE STATE, NORTHWESTERN STATES PORTLAND CEMENT CO. V.
MINNESOTA, 358 U.S. 450 (1959); AND BY A FRANCHISE TAX LEVIED ON AN
EXPRESS COMPANY, IN LIEU OF TAXES UPON INTANGIBLES OR ROLLING STOCK,
MEASURED BY GROSS RECEIPTS, FAIRLY APPORTIONED, AND DERIVED FROM
TRANSPORTATION WITHIN THE STATE, RAILWAY EXPRESS AGENCY, INC., V.
VIRGINIA, 358 U.S. 434 (1959). 

HOWEVER, LOCAL TAXES MEASURED BY GROSS RECEIPTS FROM INTERSTATE
COMMERCE HAVE NOT ALWAYS FARED AS WELL.  BECAUSE EVERY STATE HAS EQUAL
RIGHTS WHEN TAXING THE COMMERCE IT TOUCHES, THERE EXISTS THE DANGER
THAT SUCH TAXES CAN IMPOSE CUMULATIVE BURDENS UPON INTERSTATE
TRANSACTIONS WHICH ARE NOT PRESENTED TO LOCAL COMMERCE.  CF. MICHIGAN
WISCONSIN PIPE LINE CO. V. CALVERT, 347 U.S. 157, 170 (1954);
PHILADELPHIA & SOUTHERN S.S. CO. V. PENNSYLVANIA, 122 U.S. 326, 346
(1887).  SUCH BURDENS WOULD DESTROY INTERSTATE COMMERCE AND ENCOURAGE
THE RE-ERECTION OF THOSE TRADE BARRIERS WHICH MADE THE COMMERCE CLAUSE
NECESSARY.  CF. BALDWIN V. G.A.F. SEELIG, INC., 294 U.S. 511, 521-522
(1935).  AND IN THIS CONNECTION, WE HAVE SPECIFICALLY HELD THAT
INTERSTATE COMMERCE CANNOT BE SUBJECTED TO THE BURDEN OF "MULTIPLE
TAXATION."  MICHIGAN-WISCONSIN PIPE LINE CO. V. CALVERT, SUPRA, AT
170.  NEVERTHELESS, AS WE HAVE SEEN, IT IS WELL ESTABLISHED THAT
TAXATION MEASURED BY GROSS RECEIPTS IS CONSTITUTIONALLY PROPER IF IT IS
FAIRLY APPORTIONED. 

A CAREFUL ANALYSIS OF THE CASES IN THIS FIELD TEACHES THAT THE
VALIDITY OF THE TAX RESTS UPON WHETHER THE STATE IS EXACTING A
CONSTITUTIONALLY FAIR DEMAND FOR THAT ASPECT OF INTERSTATE COMMERCE TO
WHICH IT BEARS A SPECIAL RELATION.  FOR OUR PURPOSES THE DECISIVE ISSUE
TURNS ON THE OPERATING INCIDENCE OF THE TAX.  IN OTHER WORDS, THE
QUESTION IS WHETHER THE STATE HAS EXERTED ITS POWER IN PROPER
PROPORTION TO APPELLANT'S ACTIVITIES WITHIN THE STATE AND TO
APPELLANT'S CONSEQUENT ENJOYMENT OF THE OPPORTUNITIES AND PROTECTIONS
WHICH THE STATE HAS AFFORDED.  WHERE, AS IN THE INSTANT CASE, THE
TAXING STATE IS NOT THE DOMICILIARY STATE, WE LOOK TO THE TAXPAYER'S
BUSINESS ACTIVITIES WITHIN THE STATE, I.E., THE LOCAL INCIDENTS, TO
DETERMINE IF THE GROSS RECEIPTS FROM SALES THEREIN MAY BE FAIRLY
RELATED TO THOSE ACTIVITIES.  AS WAS SAID IN WISCONSIN V. J.C. PENNEY
CO., 311 U.S. 435, 444 (1940), "THE SIMPLE BUT CONTROLLING QUESTION IS
WHETHER THE STATE HAS GIVEN ANYTHING FOR WHICH IT CAN ASK RETURN." 

HERE IT IS ADMITTED THAT GENERAL MOTORS HAS ENTERED THE STATE AND
ENGAGED IN ACTIVITIES THEREIN.  IN FACT, GENERAL MOTORS VOLUNTARILY
PAYS CONSIDERABLE TAXES ON ITS WASHINGTON OPERATIONS BUT CONTESTS THE
VALIDITY OF THE TAX LEVY ON FOUR OF ITS DIVISIONS, CHEVROLET, PONTIAC,
OLDSMOBILE AND GENERAL MOTORS PARTS.  UNDER THESE CIRCUMSTANCES
APPELLANT HAS THE BURDEN OF SHOWING THAT THE OPERATIONS OF THESE
DIVISIONS IN THE STATE ARE "DISSOCIATED FROM THE LOCAL BUSINESS AND
INTERSTATE IN NATURE.  THE GENERAL RULE, APPLICABLE HERE, IS THAT A
TAXPAYER CLAIMING IMMUNITY FROM A TAX HAS THE BURDEN OF ESTABLISHING
HIS EXEMPTION."  NORTON CO. V. DEPARTMENT OF REVENUE, 340 U.S. 534, 537
(1951).  AND, AS WE ALSO SAID IN THAT CASE, THIS BURDEN IS NOT MET: 

"BY SHOWING A FAIR DIFFERENCE OF OPINION WHICH AS AN ORIGINAL MATTER
MIGHT BE DECIDED DIFFERENTLY.   THIS CORPORATION, BY SUBMITTING ITSELF
TO THE TAXING POWER  ..  OFF THE STATE, LIKEWISE SUBMITTED ITSELF TO
ITS JUDICIAL POWER TO CONSTRUE AND APPLY ITS TAXING STATUTE INSOFAR AS
IT KEEPS WITHIN CONSTITUTIONAL BOUNDS.  OF COURSE, IN CONSTITUTIONAL
CASES, WE HAVE POWER TO EXAMINE THE WHOLE RECORD TO ARRIVE AT AN
INDEPENDENT JUDGMENT AS TO WHETHER CONSTITUTIONAL RIGHTS HAVE BEEN
INVADED, BUT THAT DOES NOT MEAN THAT WE WILL RE-EXAMINE, AS A COURT OF
FIRST INSTANCE, FINDINGS OF FACT SUPPORTED BY SUBSTANTIAL EVIDENCE." 
AT 537-538. 

WITH THESE PRINCIPLES IN MIND, WE TURN TO THE FACTS. 

    II.

                         1.  GENERAL MOTORS' CORPORATE ORGANIZATION

                                    AND SALES OPERATION. 

GENERAL MOTORS IS A DELAWARE CORPORATION WHICH WAS ENGAGED IN
BUSINESS IN WASHINGTON DURING THE PERIOD OF TIME INVOLVED IN THIS CASE,
JANUARY 1, 1949, THROUGH JUNE 30, 1953.  CHEVROLET, PONTIAC, OLDSMOBILE
AND GENERAL MOTORS PARTS ARE DIVISIONS OF GENERAL MOTORS, BUT THEY
OPERATE SUBSTANTIALLY INDEPENDENTLY OF EACH OTHER.  THE CORPORATION
MANUFACTURES AUTOMOBILES, TRUCKS AND OTHER MERCHANDISE WHICH ARE SOLD
TO DEALERS IN WASHINGTON.  HOWEVER, ALL OF THESE ARTICLES ARE
MANUFACTURED IN OTHER STATES.  IN ORDER TO CARRY ON THE SALE, IN
WASHINGTON, OF THE PRODUCTS OF CHEVROLET, PONTIAC, OLDSMOBILE AND
GENERAL MOTORS PARTS, THE CORPORATION MAINTAINS AN ORGANIZATION OF
EMPLOYEES IN EACH OF THESE DIVISIONS ON A NATIONAL, REGIONAL AND
DISTRICT LEVEL.  DURING THE TAXING PERIOD IN QUESTION, THE STATE OF
WASHINGTON WAS LOCATED IN THE WESTERN REGION OF THE CORPORATION'S
NATIONAL ORGANIZATION AND EACH DIVISION, EXCEPT GENERAL MOTORS PARTS,
MAINTAINED A ZONE OFFICE AT PORTLAND, OREGON.  THESE ZONE OFFICES
SERVICED GENERAL MOTORS' OPERATIONS IN OREGON, WASHINGTON, IDAHO,
PORTIONS OF MONTANA AND WYOMING AND ALL OF THE THEN TERRITORY OF
ALASKA.  CHEVROLET DIVISION ALSO MAINTAINED A BRANCH OFFICE AT SEATTLE
WHICH WAS UNDER THE JURISDICTION OF THE PORTLAND ZONE OFFICE AND WHICH
RENDERED SPECIAL SERVICE TO ALL EXCEPT THE NINE SOUTHERN COUNTIES OF
WASHINGTON, WHICH WERE STILL SERVICED BY THE PORTLAND OFFICE.  THE ZONE
OFFICES OF EACH DIVISION WERE BROKEN DOWN INTO GEOGRAPHICAL DISTRICT
OFFICES AND IT IS IN THESE DISTRICTS THAT THE DEALERS, TO WHOM THE
CORPORATION SOLD ITS PRODUCTS FOR RE-SALE, WERE SELECTED AND LOCATED. 
(FN2)  THE ORDERS FOR THESE PRODUCTS WERE SENT BY THE DEALERS TO THE
ZONE OFFICE LOCATED AT PORTLAND.  THEY WERE ACCEPTED OR REJECTED THERE
OR AT THE FACTORY AND THE SALES WERE COMPLETED BY SHIPMENTS F.O.B. THE
FACTORIES. 

          2.  PERSONNEL RESIDING WITHIN THE STATE AND

                                  THEIR ACTIVITIES. 

THE SALES ORGANIZATIONS OF THE CHEVROLET, PONTIAC AND OLDSMOBILE
DIVISIONS WERE SIMILAR IN MOST RESPECTS.  THE ZONE MANAGER WAS LOCATED
IN PORTLAND AND HAD CHARGE OF THE SALES OPERATION.  HIS JOB WAS "TO
SECURE AND MAINTAIN A QUALITY DEALER ORGANIZATION  ..  TOO ADMINISTER
AND PROMOTE PROGRAMS, PLANS AND PROCEDURES THAT WILL CAUSE THAT DEALER
ORGANIZATION TO GIVE  ..  THHE BEST POSSIBLE BUSINESS REPRESENTATION IN
THIS AREA."  R. 76.  THE DISTRICT MANAGERS LIVED WITHIN THE STATE OF
WASHINGTON AND THEIR JOBS WERE "THE MAINTENANCE OF A QUALITY
ORGANIZATION - DEALER ORGANIZATION - AND THE FOLLOW-THROUGH AND
ADMINISTRATION OF PROGRAMS, PLANS AND PROCEDURES WITHIN THEIR DISTRICT,
THAT WILL HELP TO DEVELOP THE DEALER ORGANIZATION, FOR THE BEST
POSSIBLE FINANCIAL AND SALES RESULTS."  R. 109.  WHILE HE HAD NO OFFICE
WITHIN THE STATE, THE DISTRICT MANAGER OPERATED FROM HIS HOME WHERE HE
RECEIVED MAIL AND TELEPHONE CALLS AND OTHERWISE CARRIED ON THE
CORPORATION'S BUSINESS.   HE CALLED UPON EACH DEALER IN HIS DISTRICT ON
AN AVERAGE OF AT LEAST ONCE A MONTH, AND OFTEN SAW THE LARGER DEALERS
WEEKLY.  A DISTRICT MANAGER HAD FROM 12 TO 30 DEALERS UNDER HIS
SUPERVISION AND FUNCTIONED AS THE ZONE MANAGER'S DIRECT CONTACT WITH
THESE DEALERS, ACTING "IN A SUPERVISORY OR ADVISORY CAPACITY TO SEE
THAT THEY HAVE THE PROPER SALES ORGANIZATION AND TO ACQUAINT THEM WITH
THE DIVISIONAL SALES POLICIES AND PROMOTIONAL AND TRAINING PLANS TO
IMPROVE THE SELLING ABILITY OF THE SALES ORGANIZATION."  R. 246.  IN
THIS CONNECTION, THE DISTRICT MANAGER ALSO ASSISTED IN THE ORGANIZATION
AND TRAINING OF THE DEALER'S SALES FORCE.  AT APPROPRIATE TIMES HE
DISTRIBUTED PROMOTIONAL MATERIAL AND ADVISED ON USED CAR INVENTORY
CONTROL. 

IT WAS ALSO THE DUTY OF THE DISTRICT MANAGER TO DISCUSS AND WORK OUT
WITH THE DEALER THE 30-, 60- AND 90-DAY PROJECTION OF ORDERS OF
ESTIMATED NEEDS WHICH THE DEALER OR THE DISTRICT MANAGER THEN FILED
WITH THE ZONE MANAGER.  THESE PROJECTIONS INDICATED THE NUMBER OF CARS
A DEALER NEEDED DURING THE INDICATED PERIOD AND ALSO INCLUDED ESTIMATES
FOR ACCESSORIES AND EQUIPMENT.  THE PROJECTED ORDERS WERE PREPARED AND
FILED EACH MONTH AND THE ESTIMATES CONTAINED IN THEM COULD, FOR ALL
PRACTICAL PURPOSES, BE "CONSTRUED AS A PURCHASE ORDER."  (FN3) 

IN ADDITION TO THE DISTRICT MANAGER, EACH OF THE CHEVROLET, PONTIAC
AND OLDSMOBILE DIVISIONS ALSO MAINTAINED SERVICE REPRESENTATIVES WHO
CALLED ON THE DEALERS WITH REGULARITY, ASSISTING THE SERVICE DEPARTMENT
IN ANY TROUBLES IT EXPERIENCED WITH GENERAL MOTORS PRODUCTS.  THESE
REPRESENTATIVES ALSO CHECKED THE ADEQUACY OF THE SERVICE DEPARTMENT
INVENTORY TO MAKE CERTAIN THAT THE DEALER'S AGREEMENT WAS BEING
COMPLIED WITH AND TO ENSURE THE BEST POSSIBLE SERVICE TO CUSTOMERS.  IT
WAS ALSO THEIR DUTY TO NOTE THE APPEARANCE OF THE DEALER'S PLACE OF
BUSINESS AND, WHERE NEEDED, TO REQUIRE REHABILITATION, IMPROVED
CLEANLINESS OR ANY OTHER REPAIRS NECESSARY TO ACHIEVE AN ATTRACTIVE
SALES AND SERVICE FACILITY.  AT THE DEALER'S REQUEST, OR ON DIRECTION
FROM HIS ZONE SUPERIOR, THE SERVICE REPRESENTATIVE ALSO CONDUCTED
SERVICE CLINICS AT THE DEALER'S PLACE OF BUSINESS, FOR THE PURPOSE OF
TEACHING THE DEALER AND HIS SERVICE PERSONNEL THE PROPER TECHNIQUES
NECESSARY TO THE OPERATION OF AN EFFICIENT SERVICE DEPARTMENT.  THE
SERVICE REPRESENTATIVE ALSO GAVE ASSISTANCE TO THE DEALER WITH THE MORE
DIFFICULT CUSTOMER COMPLAINTS, SOME OF WHICH WERE REGISTERED WITH THE
DEALER, BUT OTHERS OF WHICH WERE REGISTERED WITH THE CORPORATION. 
DURING THE TAX PERIOD INVOLVED HERE THE CHEVROLET, OLDSMOBILE AND
PONTIAC DIVISIONS HAD AN AVERAGE OF ABOUT 20 EMPLOYEES RESIDENT OR
PRINCIPALLY EMPLOYED IN WASHINGTON.  (FN4)  GENERAL MOTORS PARTS
DIVISION EMPLOYED ABOUT 20 MORE. 

THE CHEVROLET DIVISION'S BRANCH OFFICE AT SEATTLE CONSISTED OF ONE
MAN AND HIS SECRETARY.  THAT OFFICE PERFORMED THE FUNCTION OF GETTING
BETTER SERVICE FOR WASHINGTON DEALERS ON ORDERS OF CHEVROLET DIVISION
PRODUCTS.  THE BRANCH OFFICE HAD NO JURISDICTION OVER SALES OR OVER
OTHER CHEVROLET PERSONNEL IN THE STATE.  SINCE JANUARY 1, 1954,
CHEVROLET DIVISION HAS MAINTAINED A ZONE OFFICE IN SEATTLE AND HAS PAID
THE TAX WITHOUT DISPUTE.         3.  OUT-OF-STATE PERSONNEL, PERFORMING
IN-STATE

                                   ACTIVITIES. 

THE ZONE MANAGER, WHO DIRECTED ALL ZONE ACTIVITIES, VISITED WITH EACH
WASHINGTON DEALER ON THE AVERAGE OF ONCE EACH 60 DAYS, THE LARGER ONES,
EACH MONTH.  ABOUT ONE-HALF OF THESE VISITS WERE STAGED AT THE DEALER'S
PLACE OF BUSINESS AND THE OTHERS WERE AT PORTLAND.  THE ZONE BUSINESS
MANAGEMENT MANAGER WAS THE EFFICIENCY EXPERT FOR THE ZONE AND
SUPERVISED THE CAPITAL STRUCTURE AND FINANCING OF THE WASHINGTON
DEALERS.  THE ZONE PARTS AND SERVICE MANAGER HELD RESPONSIBILITY FOR
THE ADEQUACY OF THE WASHINGTON DEALER SERVICES TO CUSTOMERS.  HE WORKED
THROUGH THE LOCAL WASHINGTON SERVICE REPRESENTATIVE, BUT ALSO MADE
PERSONAL VISITS TO WASHINGTON DEALERS AND CONDUCTED SCHOOLS FOR THE
PROMOTION OF GOOD SERVICE POLICIES.  THE ZONE USED CAR MANAGER (FOR THE
CHEVROLET DIVISION ONLY) ASSISTED WASHINGTON DEALERS IN THE DISPOSITION
OF USED CARS THROUGH APPROPRIATE DISPLAY AND RECONDITIONING. 

                      4.  ACTIVITIES OF GENERAL MOTORS PARTS
DIVISION. 

DURING THE PERIOD OF THIS TAX, THE GENERAL MOTORS PARTS DIVISION
WAREHOUSED, SOLD AND SHIPPED PARTS AND ACCESSORIES TO WASHINGTON
DEALERS FOR CHEVROLET, PONTIAC AND OLDSMOBILE VEHICLES.  IT MAINTAINED
WAREHOUSES IN PORTLAND AND SEATTLE.  NO PERSONNEL OF THIS DIVISION
VISITED THE DEALERS, BUT ALL OF THE CHEVROLET, PONTIAC AND OLDSMOBILE
DEALERS IN WASHINGTON OBTAINED THEIR PARTS AND ACCESSORIES FROM THESE
WAREHOUSES.  ITEMS CARRIED BY THE SEATTLE WAREHOUSE WERE SHIPPED FROM
IT, AND THOSE WAREHOUSED AT PORTLAND WERE SHIPPED FROM THERE.  THE
SEATTLE WAREHOUSE, WHICH CARRIED THE ITEMS MOST OFTEN CALLED FOR IN
WASHINGTON, EMPLOYED FROM 20 TO 28 PEOPLE DURING THE TAXING PERIOD. 
THE PORTLAND WAREHOUSE CARRIED THE LESS FREQUENTLY NEEDED PARTS.  THE
TAX ON THE ORDERS FILLED AT THE SEATTLE WAREHOUSE WAS PAID BUT THE TAX
ON THE PORTLAND SHIPMENTS IS BEING PROTESTED. 

                                            III. 

"IT IS BEYOND DISPUTE," WE SAID IN NORTHWESTERN STATES PORTLAND
CEMENT CO. V. MINNESOTA, SUPRA, AT 458, "THAT A STATE MAY NOT LAY A TAX
ON THE 'PRIVILEGE' OF ENGAGING IN INTERSTATE COMMERCE."  BUT THAT IS
NOT THIS CASE.  TO SO CONTEND HERE IS TO OVERLOOK A LONG LINE OF CASES
OF THIS COURT HOLDING THAT AN IN-STATE ACTIVITY MAY BE A SUFFICIENT
LOCAL INCIDENT UPON WHICH A TAX MAY BE BASED.  AS WAS SAID IN SPECTOR
MOTOR SERVICE, INC., V. O'CONNOR, 340 U.S. 602, 609 (1951), "THE STATE
IS NOT PRECLUDED FROM IMPOSING TAXES UPON OTHER ACTIVITIES OR ASPECTS
OF THIS INTERSTATE BUSINESS WHICH, UNLIKE THE PRIVILEGE OF DOING
INTERSTATE BUSINESS, ARE SUBJECT TO THE SOVEREIGN POWER OF THE STATE." 
THIS IS EXACTLY WHAT WASHINGTON SEEKS TO DO HERE AND WE CANNOT SAY
THAT APPELLANT HAS SHOWN THAT ITS ACTIVITIES WITHIN THE STATE ARE NOT
SUCH INCIDENTS AS THE STATE CAN REACH.  NORTON CO. V. DEPARTMENT OF
REVENUE, SUPRA, AT 537.  UNLIKE FIELD ENTERPRISES, INC., V. WASHINGTON,
47 WASH. 2D 852, 289 P.2D 1010, AFF'D, 352 U.S. 806 (1956), CITING
NORTON, SUPRA, THE PONTIAC AND OLDSMOBILE DIVISIONS OF GENERAL MOTORS
HAD NO BRANCH OFFICES IN WASHINGTON.  BUT THESE DIVISIONS HAD DISTRICT
MANAGERS, SERVICE REPRESENTATIVES AND OTHER EMPLOYEES WHO WERE
RESIDENTS OF THE STATE AND WHO PERFORMED SUBSTANTIAL SERVICES IN
RELATION TO GENERAL MOTORS' FUNCTIONS THEREIN, PARTICULARLY WITH
RELATION TO THE ESTABLISHMENT AND MAINTENANCE OF SALES, UPON WHICH THE
TAX WAS MEASURED.  WE PLACE LITTLE WEIGHT ON THE FACT THAT THESE
DIVISIONS HAD NO FORMAL OFFICES IN THE STATE, SINCE IN ACTUALITY THE
HOMES OF THESE OFFICIALS WERE USED AS CORPORATE OFFICES.  DESPITE THEIR
LABEL AS "HOMES" THEY SERVED THE CORPORATION JUST AS EFFECTIVELY AS
"OFFICES."  IN ADDITION, THE CORPORATION HAD A CHEVROLET BRANCH OFFICE
AND A GENERAL MOTORS PARTS DIVISION WAREHOUSE IN SEATTLE. 

THUS, IN THE BUNDLE OF CORPORATE ACTIVITY, WHICH IS THE TEST HERE, WE
SEE GENERAL MOTORS' ACTIVITY SO ENMESHED IN LOCAL CONNECTIONS THAT IT
VOLUNTARILY PAID TAXES ON VARIOUS OF ITS OPERATIONS BUT INSISTS THAT IT
WAS NOT LIABLE ON OTHERS.  SINCE GENERAL MOTORS ELECTED TO ENTER THE
STATE IN THIS FASHION, WE CANNOT SAY THAT THE SUPREME COURT OF
WASHINGTON ERRED IN HOLDING THAT THESE LOCAL INCIDENTS WERE SUFFICIENT
TO FORM THE BASIS FOR THE LEVY OF A TAX THAT WOULD NOT RUN CONTRARY TO
THE CONSTITUTION.  NORTON CO. V. DEPARTMENT OF REVENUE, SUPRA.

                                             IV. 

THE TAX THAT WASHINGTON LEVIED IS MEASURED BY THE WHOLESALE SALES OF
THE RESPECTIVE GENERAL MOTORS DIVISIONS IN THE STATE.  IT IS
UNAPPORTIONED AND, AS WE HAVE POINTED OUT, IS, THEREFORE, SUSPECT.  WE
MUST DETERMINE WHETHER IT IS SO CLOSELY RELATED TO THE LOCAL ACTIVITIES
OF THE CORPORATION AS TO FORM "SOME DEFINITE LINK, SOME MINIMUM
CONNECTION, BETWEEN A STATE AND THE PERSON, PROPERTY OR TRANSACTION IT
SEEKS TO TAX."  MILLER BROS. CO. V. MARYLAND, 347 U.S. 340, 344-345
(1954).  ON THE BASIS OF THE FACTS FOUND BY THE STATE COURT WE ARE NOT
PREPARED TO SAY THAT ITS CONCLUSION WAS CONSTITUTIONALLY
IMPERMISSIBLE.  NORTON CO. V. DEPARTMENT OF REVENUE, SUPRA, AT 538. 
HERE, JUST AS IN NORTON, THE CORPORATION SO MINGLED ITS TAXABLE
BUSINESS WITH THAT WHICH IT CLAIMS NONTAXABLE THAT WE CAN ONLY
"CONCLUDE THAT, IN THE LIGHT OF ALL THE EVIDENCE, THE JUDGMENT
ATTRIBUTING  .. THEE CORPORATION'S WASHINGTON SALES TO ITS LOCAL
ACTIVITIES WAS WITHIN THE REALM OF PERMISSIBLE JUDGMENT.   PETITIONER
HAS NOT ESTABLISHED THAT SUCH SERVICES AS WERE RENDERED  ..  THHROUGH
IN-STATE ACTIVITY WERE NOT DECISIVE FACTORS IN ESTABLISHING AND HOLDING
THIS MARKET."  IBID.  ALTHOUGH MERE ENTRY INTO A STATE DOES NOT TAKE
FROM A CORPORATION THE RIGHT TO CONTINUE TO DO AN INTERSTATE BUSINESS
WITH TAX IMMUNITY, IT DOES NOT FOLLOW THAT THE CORPORATION CAN CHANNEL
ITS OPERATIONS THROUGH SUCH A MAZE OF LOCAL CONNECTIONS AS DOES GENERAL
MOTORS, AND TAKE ADVANTAGE OF ITS GAIN ON DOMESTICITY, AND STILL
MAINTAIN THAT SAME DEGREE OF IMMUNITY. 

  V. 

A MORE DIFFICULT QUESTION MIGHT ARISE FROM APPELLANT'S CLAIM OF
MULTIPLE TAXATION.  GWIN, WHITE & PRINCE, INC., V. HENNEFORD, 305 U.S.
434, 440 (1939).  GENERAL MOTORS CLAIMS THAT SOME OF ITS PRODUCTS TAXED
BY WASHINGTON ARE MANUFACTURED IN ST. LOUIS WHERE A LICENSE TAX,
MEASURED BY SALES BEFORE SHIPMENT IS LEVIED.  SEE AMERICAN MFG. CO. V.
ST. LOUIS, 250 U.S. 459 (1919).  IT IS ALSO URGED THAT GENERAL MOTORS'
OREGON-BASED ACTIVITY WHICH CONCERNS WASHINGTON SALES MIGHT AFFORD
SUFFICIENT INCIDENTS FOR A SIMILAR TAX BY OREGON.  THE COURT TOUCHED
UPON THE PROBLEM OF MULTIPLE TAXATION IN NORTHWEST AIRLINES V.
MINNESOTA, SUPRA, AT 295, BUT LAID IT TO ONE SIDE AS "NOT NOW BEFORE
US."  THEREAFTER, IN NORTHWESTERN STATES PORTLAND CEMENT CO. V.
MINNESOTA, SUPRA, AT 463, WE HELD THAT "IN THIS TYPE OF CASE THE
TAXPAYERS MUST SHOW THAT THE FORMULA PLACES A BURDEN UPON INTERSTATE
COMMERCE IN A CONSTITUTIONAL SENSE."  APPELLANT HAS NOT DONE THIS.  IT
HAS NOT DEMONSTRATED WHAT DEFINITE BURDEN, IN A CONSTITUTIONAL SENSE,
THE ST. LOUIS TAX PLACES ON THE IDENTICAL INTERSTATE SHIPMENTS BY WHICH
WASHINGTON MEASURES ITS TAX.  CF. INTERNATIONAL HARVESTER CO. V. EVATT,
329 U.S. 416, 421-423 (1947).  AND FURTHER, IT HAS NOT BEEN SHOWN THAT
OREGON LEVIES ANY TAX ON APPELLANT'S ACTIVITY BEARING ON WASHINGTON
SALES.  IN SUCH CASES WE HAVE REFRAINED FROM PASSING ON THE QUESTION OF
"MULTIPLE TAXATION," E.G., NORTHWESTERN STATES PORTLAND CEMENT CO. V.
MINNESOTA, SUPRA, AND WE ADHERE TO THAT POSITION.  AFFIRMED. 

FN1  RELEVANT SECTIONS OF THE WASHINGTON STATUTE AS THEY WERE IN
FORCE DURING THE TAXABLE PERIOD IN THIS CASE, JANUARY 1, 1949, THROUGH
JUNE 30, 1953, ARE: 

"SECTION 4.  FROM AND AFTER THE FIRST DAY OF MAY, 1935, THERE IS
HEREBY LEVIED AND THERE SHALL BE COLLECTED FROM EVERY PERSON A TAX FOR
THE ACT OR PRIVILEGE OF ENGAGING IN BUSINESS ACTIVITIES.  SUCH TAX
SHALL BE MEASURED BY THE APPLICATION OF RATES AGAINST VALUE OF
PRODUCTS, GROSS PROCEEDS OF SALES, OR GROSS INCOME OF THE BUSINESS, AS
THE CASE MAY BE, AS FOLLOWS: 

     *         *  *         *         * 

"(E)  UPON EVERY PERSON  ..  ENNGAGING WITHIN THIS STATE IN THE
BUSINESS OF MAKING SALES AT WHOLESALE; AS TO SUCH PERSONS THE AMOUNT OF
TAX WITH RESPECT TO SUCH BUSINESS SHALL BE EQUAL TO THE GROSS PROCEEDS
OF SALES OF SUCH BUSINESS MULTIPLIED BY THE RATE OF ONE-QUARTER OF ONE
PER CENT. 

     *         *         *         *         * 

"SECTION 5.  FOR THE PURPOSES OF THIS TITLE  ..  .  

     *     *         *         *         * 

"(E)  THE TERM 'SALE AT WHOLESALE' OR 'WHOLESALE SALE' MEANS ANY SALE
OF TANGIBLE PERSONAL PROPERTY AND ANY SALE OF OR CHARGE MADE FOR LABOR
AND SERVICES RENDERED IN RESPECT TO REAL OR PERSONAL PROPERTY, WHICH IS
NOT A SALE AT RETAIL. 

"(F)  THE TERM 'GROSS PROCEEDS OF SALES' MEANS THE VALUE PROCEEDING
OR ACCRUING FROM THE SALE OF TANGIBLE PERSONAL PROPERTY AND/OR FOR
SERVICES RENDERED WITHOUT ANY DEDUCTION ON ACCOUNT OF THE COST OF
PROPERTY SOLD, THE COST OF MATERIALS USED, LABOR COSTS, INTEREST,
DISCOUNT PAID, DELIVERY COSTS, TAXES, OR ANY OTHER EXPENSE WHATSOEVER
PAID OR ACCRUED AND WITHOUT ANY DEDUCTION ON ACCOUNT OF LOSSES."  LAWS
OF WASH., 1949, C. 228, AT 814-819. 

FN2  THE DEALERS ARE INDEPENDENT MERCHANTS, OFTEN FINANCING
THEMSELVES, OWNING THEIR OWN FACILITIES AND PAYING FOR ALL PRODUCTS
UPON DELIVERY. 

FN3  R. 341.  A CHEVROLET ZONE MANAGER SAID THAT:  "ONCE THAT
PROJECTION AND ESTIMATE HAS BEEN MADE, AND A MEETING OF MINDS BETWEEN
THE DISTRICT MANAGER AND THE DEALER, OR HIS REPRESENTATIVE, ARRIVED AT,
THE DEALER THEN PLACES INDIVIDUAL ORDERS WITH US ON A SEPARATE FORM FOR
THE MERCHANDISE.   THOSE SEPARATE FORMS, OF COURSE, ARE TO ALLOW HIM TO
SPECIFICALLY SPECIFY COLOR OPTION, AND THINGS OF THAT CHARACTER."  R.
124. 

FN4  AT TIMES, PONTIAC HAD THREE, OLDSMOBILE SIX AND CHEVROLET 17
ASSIGNED PERSONNEL IN THE STATE. 

MR. JUSTICE BRENNAN, DISSENTING. 

THIS CASE PRESENTS ONCE AGAIN THE THORNY PROBLEM OF THE POWER OF A
STATE TO TAX THE GROSS RECEIPTS FROM INTERSTATE SALES ARISING FROM
ACTIVITIES OCCURRING ONLY PARTLY WITHIN ITS BORDERS.  IN UPHOLDING THE
WASHINGTON GROSS RECEIPTS TAX THE COURT HAS, IN MY JUDGMENT, CONFUSED
TWO QUITE DIFFERENT ISSUES RAISED BY THE CASE, AND IN DOING SO HAS
IGNORED A FATAL DEFECT IN THE WASHINGTON STATUTE. 

IN ORDER TO TAX ANY TRANSACTION, THE DUE PROCESS CLAUSE REQUIRES THAT
A STATE SHOW A SUFFICIENT "NEXUS BETWEEN SUCH A TAX AND TRANSACTIONS
WITHIN A STATE FOR WHICH THE TAX IS AN EXACTION."  NORTHWESTERN STATES
PORTLAND CEMENT CO. V. MINNESOTA, 358 U.S. 450, 464.  THIS QUESTION,
WHICH WE CONSIDERED IN MCLEOD V. J.E. DILWORTH CO., 322 U.S. 327, AND
NORTON CO. V. DEPARTMENT OF REVENUE, 340 U.S. 534, IS THE MOST
FUNDAMENTAL PRECONDITION ON STATE POWER TO TAX.  BUT THE STRICTURES OF
THE CONSTITUTION ON THIS POWER DO NOT STOP THERE.  FOR IN THE CASE OF A
GROSS RECEIPTS TAX IMPOSED UPON AN INTERSTATE TRANSACTION, EVEN THOUGH
THE TAXING STATE CAN SHOW "SOME MINIMUM CONNECTION," NORTHWESTERN
STATES PORTLAND CEMENT CO., SUPRA, AT 465, THE COMMERCE CLAUSE REQUIRES
THAT "TAXATION MEASURED BY GROSS RECEIPTS FROM INTERSTATE COMMERCE  ..
BE  FAIRLY APPORTIONED TO THE COMMERCE CARRIED ON WITHIN THE TAXING
STATE."  WESTERN LIVE STOCK V. BUREAU OF REVENUE, 303 U.S. 250, 256. 
SEE J.D. ADAMS MFG. CO. V. STOREN, 304 U.S. 307. 

THE COURT RECOGNIZES THAT "TAXATION MEASURED BY GROSS RECEIPTS IS
CONSTITUTIONALLY PROPER IF IT IS FAIRLY APPORTIONED," ANTE, P. 440.  IN
CONCLUDING THAT THE TAX IN THIS CASE INCLUDES A FAIR APPORTIONMENT,
HOWEVER, THE COURT RELIES UPON THE FACT THAT WASHINGTON HAS SUFFICIENT
CONTACTS WITH THE SALE TO SATISFY THE NORTON STANDARD, WHICH WAS
FORMULATED TO MEET THE QUITE DIFFERENT PROBLEM OF DEFINING THE
REQUIREMENTS OF THE DUE PROCESS CLAUSE.  SEE PART IV, ANTE.  OUR PRIOR
DECISIONS CLEARLY INDICATE THAT A QUITE DIFFERENT SCHEME OF
APPORTIONMENT IS REQUIRED.  OF COURSE, WHEN A SALE MAY BE LOCALIZED
COMPLETELY IN ONE STATE, THERE IS NO DANGER OF MULTIPLE TAXATION, AND,
AS IN THE CASE OF A RETAIL SALES TAX, THE STATE MAY USE AS ITS TAX BASE
THE TOTAL GROSS RECEIPTS ARISING WITHIN ITS BORDERS.  SEE MCGOLDRICK V.
BERWIND-WHITE COAL MINING CO., 309 U.S. 33.  BUT FAR MORE COMMON IN OUR
COMPLEX ECONOMY IS THE KIND OF SALE PRESENTED IN THIS CASE, WHICH
EXHIBITS SIGNIFICANT CONTACTS WITH MORE THAN ONE STATE.  IN SUCH A
SITUATION, IT IS THE COMMERCIAL ACTIVITY WITHIN THE STATE, AND NOT THE
SALES VOLUME, WHICH DETERMINES THE STATE'S POWER TO TAX, AND BY WHICH
THE TAX MUST BE APPORTIONED.  WHILE THE RATIO OF IN-STATE TO OUT-OF
STATE SALES IS OFTEN TAKEN INTO ACCOUNT AS ONE FACTOR AMONG OTHERS IN
APPORTIONING A FIRM'S TOTAL NET INCOME, SEE, E.G., THE DESCRIPTION OF
THE "MASSACHUSETTS FORMULA" IN NOTE, 75 HARV. L. REV. 953, 1011 (1962),
IT NEVERTHELESS REMAINS TRUE THAT IF COMMERCIAL ACTIVITY IN MORE THAN
ONE STATE RESULTS IN A SALE IN ONE OF THEM, THAT STATE MAY NOT CLAIM AS
ALL ITS OWN THE GROSS RECEIPTS TO WHICH THE ACTIVITY WITHIN ITS BORDERS
HAS CONTRIBUTED ONLY A PART.  SUCH A TAX MUST BE APPORTIONED TO REFLECT
THE BUSINESS ACTIVITY WITHIN THE TAXING STATE.  CF. MY CONCURRING
OPINION IN RAILWAY EXPRESS AGENCY V. VIRGINIA, 358 U.S. 434, 446. 
SINCE THE WASHINGTON TAX ON WHOLESALES IS, BY ITS VERY TERMS, APPLIED
TO THE "GROSS PROCEEDS OF SALES" OF THOSE "ENGAGING WITHIN THIS STATE
IN THE BUSINESS OF MAKING SALES AT WHOLESALE," REV. CODE WASH.
82.04.270, IT CANNOT BE SUSTAINED UNDER THE STANDARDS REQUIRED BY THE
COMMERCE CLAUSE.    MR. JUSTICE GOLDBERG, WITH WHOM MR. JUSTICE STEWART
AND MR. JUSTICE WHITE JOIN, DISSENTING. 

THE ISSUE PRESENTED IS WHETHER THE COMMERCE CLAUSE PERMITS A STATE TO
ASSESS AN UNAPPORTIONED GROSS RECEIPTS TAX ON THE INTERSTATE WHOLESALE
SALES OF AUTOMOBILES DELIVERED TO DEALERS FOR RESALE IN THAT STATE.  IN
UPHOLDING THE TAX INVOLVED IN THIS CASE, THE COURT STATES AS A GENERAL
PROPOSITION THAT "TAXATION MEASURED BY GROSS RECEIPTS FROM INTERSTATE
SALES IS CONSTITUTIONALLY PROPER IF IT IS FAIRLY APPORTIONED."  ANTE,
AT 440.  THE COURT CONCLUDES FROM THIS THAT THE VALIDITY OF
WASHINGTON'S WHOLESALE SALES TAX MAY BE DETERMINED BY ASKING "'THE
SIMPLE BUT CONTROLLING QUESTION OF WHETHER THE STATE HAS GIVEN ANYTHING
FOR WHICH IT CAN ASK RETURN.'"  ANTE, AT 441.  THIS ELUSIVELY SIMPLE
TEST AND ITS APPLICATION TO THIS CASE REPRESENT AN IMPORTANT DEPARTURE
FROM A FUNDAMENTAL PURPOSE OF THE COMMERCE CLAUSE AND FROM AN
ESTABLISHED PRINCIPLE WHICH HAD HERETOFORE PROVIDED GUIDANCE IN AN AREA
OTHERWISE FRAUGHT WITH COMPLEXITIES AND INCONSISTENCIES. 

THE RELEVANT FACTS, WHICH ARE UNDISPUTED, MERIT BRIEF RESTATEMENT. 
GENERAL MOTORS MANUFACTURES IN CALIFORNIA, MISSOURI AND MICHIGAN MOTOR
VEHICLES, PARTS AND ACCESSORIES WHICH ARE SOLD AT WHOLESALE TO
INDEPENDENT DEALERS.  THE CORPORATION MANUFACTURES NONE OF THESE
PRODUCTS WITHIN THE STATE OF WASHINGTON BUT DOES SELL THEM TO LOCAL
WASHINGTON RETAIL DEALERS.  GENERAL MOTORS CONDUCTS BUSINESS THROUGH
"DIVISIONS" WHICH ALTHOUGH NOT SEPARATELY INCORPORATED ARE OPERATED AS
SUBSTANTIALLY INDEPENDENT ENTITIES.  THIS CASE INVOLVES WHOLESALE SALES
BY THE CHEVROLET PONTIAC, OLDSMOBILE AND GENERAL MOTORS PARTS DIVISIONS
TO INDEPENDENT DEALERS IN WASHINGTON.  AS A GENERAL MATTER THE SALES
AND ORDERS INVOLVED IN THIS CASE WERE HANDLED AND APPROVED BY ZONE
OFFICES IN PORTLAND, OREGON.  GENERAL MOTORS HAS A LIMITED NUMBER OF
SALES REPRESENTATIVES ("DISTRICT MANAGERS") WHO RESIDE IN WASHINGTON
AND WHO MAINTAIN CONTACTS WITH THE LOCAL DEALERS IN ORDER TO FACILITATE
THE SALES OF GENERAL MOTORS PRODUCTS, BUT THESE SALES REPRESENTATIVES
CONDUCTED NO BUSINESS IN WASHINGTON OTHER THAN THE PROMOTION OF THEIR
WHOLESALE INTERSTATE SALES.  THE ORDERS FOR AUTOMOBILES WERE SENT
DIRECTLY TO THE PORTLAND ZONE OFFICES WHERE THEY WERE ACCEPTED FOR
SHIPMENT, F.O.B., FROM POINTS OUTSIDE OF WASHINGTON.  FOR THE PURPOSES
OF THIS CASE, HOWEVER, IT IS USEFUL TO DIVIDE THE TRANSACTIONS - THE
TAXABILITY OF WHICH IS IN DISPUTE - INTO THREE CATEGORIES: 

(1)  PONTIAC AND OLDSMOBILE DIVISIONS SALES:  THESE DIVISIONS HAD NO
OFFICE, ESTABLISHMENT OR INTRASTATE BUSINESS IN WASHINGTON; THEY
OPERATED ENTIRELY THROUGH PORTLAND ZONE OFFICES AND THE WASHINGTON
SALES REPRESENTATIVES. 

(2)  GENERAL MOTORS PARTS DIVISION SALES:  THIS DIVISION MAINTAINED
WAREHOUSES IN BOTH SEATTLE, WASHINGTON, AND PORTLAND, OREGON.  THE
SEATTLE WAREHOUSE SOLD DIRECTLY TO LOCAL WASHINGTON DEALERS AND THE TAX
IMPOSED ON SUCH SALES HAS BEEN PAID AND IS NOT DISPUTED HERE.  THE
SALES TO WASHINGTON DEALERS OF PARTS AND ACCESSORIES ORDERED FROM AND
DELIVERED BY THE PORTLAND WAREHOUSE WERE, HOWEVER, ALSO TAXED AND THOSE
TAXES ARE DISPUTED HERE. 

(3)  CHEVROLET DIVISION SALES - "CLASS A AND B" SALES:  THE CHEVROLET
DIVISION MAINTAINED A ONE-MAN BRANCH OFFICE IN SEATTLE, WASHINGTON; AND
ALL SALES WITHIN THE TERRITORIAL JURISDICTION OF THAT OFFICE HAVE BEEN
REFERRED TO IN THIS LITIGATION AS "CLASS A" TRANSACTIONS.  THIS ONE-MAN
OFFICE OPERATED UNDER THE DIRECTION OF THE PORTLAND ZONE OFFICE AND
CONDUCTED NO BUSINESS IN THE STATE OF WASHINGTON OTHER THAN TO
FACILITATE THE MANAGEMENT AND HANDLING OF SALES AND ORDERS THROUGH THE
PORTLAND ZONE OFFICE.  THE SEATTLE OFFICE, HOWEVER, DEALT ONLY WITH
WASHINGTON'S NORTHERN COUNTIES AND DID NOT DEAL WITH NINE OF
WASHINGTON'S SOUTHERN COUNTIES; THE SALES TO DEALERS IN THOSE SOUTHERN
COUNTIES HAVE BEEN LABELED "CLASS B" SALES AND HAD NO CONNECTION WITH
CHEVROLET'S SEATTLE OFFICE.  THE "CLASS B" SALES WERE THEREFORE SIMILAR
TO THOSE IN CATEGORY (1) ABOVE. 

ALL OF THE ABOVE TRANSACTIONS HAVE BEEN SUBJECTED TO AN UNAPPORTIONED
GROSS RECEIPTS TAX WHICH THE STATE OF WASHINGTON ASSESSES FOR THE
PRIVILEGE OF "ENGAGING WITHIN THIS STATE IN THE BUSINESS OF MAKING
SALES AT WHOLESALE."  REV. CODE WASH. 82.04.270; WASH. LAWS 1949, C.
228, SEC. 1(E).  (FN1) 

ON THESE FACTS THE COURT HOLDS THAT THE ACTIVITIES OF THE SALES
REPRESENTATIVES CONSTITUTE "AN IN-STATE ACTIVITY" FORMING "A SUFFICIENT
LOCAL INCIDENT UPON WHICH A TAX MAY BE BASED."  ANTE, AT 447.  THIS
DECISION DEPARTS FROM NORTON CO. V. DEPARTMENT OF REVENUE, 340 U.S.
534, AND ADOPTS A TEST THERE REJECTED.  NORTON INVOLVED A MASSACHUSETTS
CORPORATION WHICH OPERATED "A BRANCH OFFICE AND WAREHOUSE" IN CHICAGO,
ILLINOIS, FROM WHICH IT MADE "LOCAL SALES AT RETAIL."  ID., AT 535. 
THE MASSACHUSETTS CORPORATION WAS ADMITTEDLY ENGAGING IN INTRASTATE
BUSINESS WITHIN ILLINOIS AND WAS MAKING LOCAL SALES CONCEDEDLY SUBJECT
TO TAXATION BY THE STATE.  IN ADDITION TO "OVER-THE-COUNTER" CHICAGO
SALES, THE MASSACHUSETTS FIRM MADE TWO OTHER TYPES OF SALES TO ILLINOIS
INHABITANTS:  (1) SALES BASED ON ORDERS OR SHIPMENTS WHICH AT SOME
POINT WERE ROUTED THROUGH OR UTILIZED THE CHICAGO OUTLET AND (2) SALES
BASED ON ORDERS FROM ILLINOIS INHABITANTS SENT DIRECTLY TO
MASSACHUSETTS AND FILLED BY DIRECT SHIPMENT TO THE PURCHASERS.  THE
ILLINOIS TAX WAS IMPOSED UPON ALL RECEIPTS OBTAINED BY NORTON FROM
SALES TO ILLINOIS RESIDENTS REGARDLESS OF WHETHER THOSE SALES WERE
ASSOCIATED OR CONNECTED WITH THE LOCAL OFFICE AND WAREHOUSE WHICH WAS
CONDUCTING INTRASTATE BUSINESS.  THE COURT STATED THAT WHEN, "AS HERE,
THE CORPORATION HAS GONE INTO THE STATE TO DO LOCAL BUSINESS," THE FIRM
COULD BE EXEMPTED FROM TAXATION ON SALES "ONLY BY" SUSTAINING THE
BURDEN OF "SHOWING THAT THE PARTICULAR TRANSACTIONS ARE DISSOCIATED
FROM THE LOCAL BUSINESS AND INTERSTATE IN NATURE."  ID., AT 537.  THE
COURT HELD IN PART THAT "THE JUDGMENT ATTRIBUTING TO THE CHICAGO BRANCH
INCOME FROM ALL SALES THAT UTILIZED IT EITHER IN RECEIVING THE ORDERS
OR DISTRIBUTING THE GOODS WAS WITHIN THE REALM OF PERMISSIBLE
JUDGMENT."  ID., AT 538.  BUT IN SPITE OF THE BURDEN OF PERSUASION
RESTING ON A FIRM HAVING AN OFFICE DOING INTRASTATE BUSINESS, THE COURT
CONCLUDED THAT THE TAX ON ALL SALES BY NORTON TO ILLINOIS CUSTOMERS WAS
NOT WHOLLY WITHIN "THE REALM OF PERMISSIBLE JUDGMENT."   THE COURT HELD
THAT THOSE SALES INVOLVING GOODS AND ORDERS WHICH PROCEEDED DIRECTLY
FROM MASSACHUSETTS TO THE ILLINOIS CUSTOMERS WITHOUT BECOMING
ASSOCIATED WITH THE CHICAGO OUTLET WERE SO CLEARLY "INTERSTATE IN
CHARACTER" THAT THEY COULD NOT BE SUBJECTED TO THE ILLINOIS TAX.  ID.,
AT 539.  IN SO HOLDING THE COURT STATED THAT THE OUT-OF-STATE
CORPORATION "COULD HAVE APPROACHED THE ILLINOIS MARKET THROUGH
SOLICITORS ONLY AND IT WOULD HAVE BEEN ENTITLED TO THE IMMUNITY OF
INTERSTATE COMMERCE  ..  .""  ID., AT 538. 

THE FACTS AND HOLDINGS OF NORTON SHOULD BE COMPARED WITH THE FACTS
AND DECISION OF THE COURT IN THE PRESENT CASE.  THE NORTON DECISION
SURELY REQUIRES IMMUNITY FOR THE SALES IN CATEGORY (1) (PONTIAC AND
OLDSMOBILE DIVISIONS SALES) FOR THOSE SALES WERE NOT ONLY INTERSTATE IN
CHARACTER BUT WERE WHOLLY FREE FROM ASSOCIATION WITH ANY LOCAL OFFICE
OR WAREHOUSE CONDUCTING INTRASTATE BUSINESS. 

WITH RESPECT TO THE TRANSACTIONS IN CATEGORY (2) (GENERAL MOTORS
PARTS DIVISION SALES), IT APPEARS THAT THE OFFICES AND WAREHOUSES
OPERATED BY THE PARTS DIVISION IN SEATTLE, WASHINGTON, AND IN PORTLAND,
OREGON, CREATE A SITUATION STRIKINGLY SIMILAR TO THAT IN NORTON WHERE
THE MASSACHUSETTS FIRM MAINTAINED AN OUTLET IN CHICAGO, ILLINOIS.  HERE
AS IN NORTON THE COURT IS PRESENTED WITH AN IDENTIFIABLE GROUP OF SALES
TRANSACTIONS (THOSE INVOLVING SALES AT THE LOCAL SEATTLE WAREHOUSE)
WHICH APPEAR TO HAVE BEEN OVER-THE-COUNTER AND INTRASTATE IN CHARACTER
AND WITH A READILY DISTINGUISHABLE GROUP OF SALES TRANSACTIONS (THOSE
INVOLVING ONLY THE PORTLAND WAREHOUSE) WHICH WERE NOT CONNECTED WITH AN
INTRASTATE BUSINESS AND WHICH WERE INTERSTATE IN CHARACTER.  IN NORTON
THE LATTER TYPE OF PURELY INTERSTATE SALES, THOSE UNCONNECTED WITH ANY
INTRASTATE BUSINESS, WERE SQUARELY HELD NONTAXABLE. 

FINALLY, WITH RESPECT TO TRANSACTIONS IN CATEGORY (3) (CHEVROLET
DIVISION SALES - "CLASS A AND B" SALES), THOSE IN "CLASS B," WHICH BY
DEFINITION LACKED ANY CONNECTION WITH AN IN-STATE OFFICE, WOULD SEEM TO
BE PRECISELY LIKE THOSE IN NORTON WHICH HAD NO CONNECTION WITH AN IN
STATE ESTABLISHMENT AND WHICH ACCORDINGLY WERE EXEMPTED.  AND, AS TO
THE "CLASS A" SALES WHICH WERE CONNECTED WITH THE ONE-MAN SEATTLE
OFFICE, IT IS IMPORTANT TO NOTE THAT THIS IN-STATE "OFFICE," UNLIKE THE
"OFFICE AND WAREHOUSE" INVOLVED IN NORTON, MADE NO INTRASTATE OR RETAIL
SALES, STOCKED NO PRODUCTS AND HAD NO AUTHORITY TO ACCEPT SALES
ORDERS.  IN FACT THE SEATTLE "OFFICE" SIMPLY OPERATED TO FACILITATE THE
INTERSTATE SALES DIRECTED BY THE ZONE OFFICE IN PORTLAND, OREGON. 

ALTHOUGH THE OPINION OF THE COURT SEEMS TO IMPLY THAT THERE STILL IS
SOME THRESHOLD REQUIREMENT OF IN-STATE ACTIVITY WHICH MUST BE FOUND TO
EXIST BEFORE A "FAIRLY APPORTIONED" TAX MAY BE IMPOSED ON INTERSTATE
SALES, IT IS DIFFICULT TO CONCEIVE OF A STATE GROSS RECEIPTS TAX ON
INTERSTATE COMMERCE WHICH COULD NOT BE SUSTAINED UNDER THE RATIONALE
ADOPTED TODAY.  EVERY INTERSTATE SALE INVARIABLY INVOLVES SOME LOCAL
INCIDENTS - SOME "IN-STATE" ACTIVITY.  IT IS DIFFICULT, FOR EXAMPLE, TO
DISTINGUISH BETWEEN THE IN-STATE ACTIVITIES OF THE REPRESENTATIVES HERE
INVOLVED AND THE IN-STATE ACTIVITIES OF SOLICITORS OR TRAVELING
SALESMEN - ACTIVITIES WHICH THIS COURT HAS HELD ARE INSUFFICIENT TO
CONSTITUTE A BASIS FOR IMPOSING A TAX ON INTERSTATE SALES.  MCLEOD V.
J.E. DILWORTH CO., 322 U.S. 327; CF. REAL SILK HOSIERY MILLS V. CITY OF
PORTLAND, 268 U.S. 325; ROBBINS V. SHELBY COUNTY TAXING DISTRICT, 120
U.S. 489.  SURELY THE DISTINCTION CANNOT REST ON THE FACT THAT THE
SOLICITORS OR SALESMEN MAKE HOTELS OR MOTELS THEIR "OFFICES" WHEREAS IN
THE PRESENT CASE THE SALES REPRESENTATIVES MADE THEIR HOMES THEIR
"OFFICES."  IN THIS REGARD, THE NORTON DECISION RESTED SOLIDLY ON THE
FACT THAT THE TAXPAYER HAD A BRANCH OFFICE AND WAREHOUSE MAKING
INTRASTATE RETAIL SALES. 

THE OPINION OF THE COURT GOES BEYOND A CONSIDERATION OF WHETHER THERE
HAS BEEN IN-STATE ACTIVITY OF APPROPRIATE CHARACTER TO SATISFY A
THRESHOLD REQUIREMENT FOR IMPOSING A TAX ON INTERSTATE SALES.  THE
COURT ASSERTS AS A GENERAL PRINCIPLE THAT THE VALIDITY OF A TAX ON
INTERSTATE COMMERCE "RESTS UPON WHETHER THE STATE IS EXACTING A
CONSTITUTIONALLY FAIR DEMAND FOR THAT ASPECT OF INTERSTATE COMMERCE TO
WHICH IT BEARS A SPECIAL RELATION."  ANTE, AT 440.  WHAT IS "FAIR"? 
HOW ARE WE TO DETERMINE WHETHER A STATE HAS EXERTED ITS POWER IN
"PROPER PROPORTION TO APPELLANT'S ACTIVITIES WITHIN THE STATE"?  ANTE,
AT 441.  SEE NOTE, DEVELOPMENTS - FEDERAL LIMITATIONS ON STATE TAXATION
OF INTERSTATE BUSINESS, 75 HARV. L. REV. 953, 957 (1962).  I SUBMIT,
WITH DUE RESPECT FOR THE COMPLEXITY OF THE PROBLEM, THAT THE
FORMULATION SUGGESTED BY THE COURT IS UNWORKABLE.  CONSTITUTIONAL
ADJUDICATION UNDER THE COMMERCE CLAUSE WOULD FIND LITTLE GUIDANCE IN A
CONCEPT OF STATE INTERSTATE SALES TAXATION TESTED AND LIMITED BY THE
TAX'S "FAIR" PROPORTION OR DEGREE.  THE ATTEMPT TO DETERMINE THE
"FAIRNESS" OF AN INTERSTATE SALES TAX OF A GIVEN PERCENTAGE IMPOSED ON
GIVEN ACTIVITIES IN ONE STATE WOULD BE ALMOST AS UNSEEMLY AS AN ATTEMPT
TO DETERMINE WHETHER THAT SAME TAX WAS "FAIRLY" APPORTIONED IN LIGHT OF
TAXES LEVIED ON THE SAME TRANSACTION BY OTHER STATES.  THE INFINITE
VARIETY OF FACTUAL CONFIGURATIONS WOULD READILY FRUSTRATE THE USUAL
PROCESS OF CLARIFICATION THROUGH JUDICIAL INCLUSION AND EXCLUSION.  THE
ONLY COHERENT PATTERN THAT COULD DEVELOP WOULD, IN REALITY, ULTIMATELY
BE BASED ON A WHOLLY PERMISSIVE ATTITUDE TOWARD STATE TAXATION OF
INTERSTATE COMMERCE. 

THE DILEMMA INHERING IN THE COURT'S FORMULATION IS REVEALED BY ITS
TREATMENT OF THE "MORE DIFFICULT," BUT INEXTRICABLY RELATED, QUESTION
ARISING FROM THE ALLEGED MULTIPLE TAXATION.  THE COURT WOULD AVOID THE
BASIC QUESTION BY SAYING THAT APPELLANT "HAS NOT DEMONSTRATED WHAT
DEFINITE BURDEN, IN A CONSTITUTIONAL SENSE, THE ST. LOUIS TAX PLACES ON
THE IDENTICAL INTERSTATE SHIPMENTS ..  .   AND FURTHER, IT HAS NOT BEEN
SHOWN THAT OREGON LEVIES ANY TAX ON APPELLANT'S ACTIVITY BEARING ON
WASHINGTON SALES."  (FN2) ANTE, AT 449.  THESE PROBLEMS ARE ENGENDERED
BY THE RULE APPLIED HERE AND CANNOT BE EVADED.  FOR IF IT IS "FAIR" TO
SUBJECT THE INTERSTATE SALES TO THE WASHINGTON WHOLESALE SALES TAX
BECAUSE OF THE ACTIVITIES OF THE SALES REPRESENTATIVES IN WASHINGTON,
THEN IT WOULD SEEM EQUALLY "FAIR" FOR OREGON, WHICH IS THE SITE OF THE
OFFICE DIRECTING AND CONSUMMATING THESE SALES, TO TAX THE SAME GROSS
SALES RECEIPTS.  MOREOVER, IT WOULD SEEM "FAIRER" FOR CALIFORNIA,
MICHIGAN OR MISSOURI - STATES IN WHICH AUTOMOBILES ARE MANUFACTURED,
ASSEMBLED OR DELIVERED - TO IMPOSE A TAX MEASURED BY, AND EFFECTIVELY
BEARING UPON, THE SAME GROSS SALES RECEIPTS.  SEE NOTE, 38 WASH. L.
REV. 277, 281 (1963).  PRESUMABLY, IF THERE IS TO BE A LIMITATION ON
THE TAXING POWER OF EACH OF THESE STATES, THAT LIMITATION SURELY CANNOT
BE ON A FIRST-COME-FIRST-TAX BASIS.  ALTERNATIVELY, IF DIVERSE LOCAL
INCIDENTS CAN AFFORD BASES FOR MULTISTATE TAXATION OF THE SAME
INTERSTATE SALE, THEN THE COURT IS LEFT TO DETERMINE, OUT OF SOME
HYPOTHETICAL MAXIMUM TAXABLE AMOUNT, WHICH PROPORTION IS "FAIR" FOR
EACH OF THE STATES HAVING A SUFFICIENT "IN-STATE" CONTACT WITH THE
INTERSTATE TRANSACTION.    THE BURDEN ON INTERSTATE COMMERCE AND THE
DANGERS OF MULTIPLE TAXATION ARE MADE APPARENT BY CONSIDERING
WASHINGTON'S TAX PROVISIONS.  THE WASHINGTON PROVISION HERE INVOLVED -
THE "TAX ON WHOLESALERS" - PROVIDES THAT EVERY PERSON "ENGAGING WITHIN
THIS STATE IN THE BUSINESS OF MAKING SALES AT WHOLESALE" SHALL PAY A
TAX ON SUCH BUSINESS "EQUAL TO THE GROSS PROCEEDS OF SALES OF SUCH
BUSINESS MULTIPLIED BY THE RATE OF ONE-QUARTER OF ONE PER CENT."  REV.
CODE WASH. 82.04.270; WASH. LAWS 1949, C. 228, SEC. 1(E).  (FN3)  IN
THE SAME CHAPTER WASHINGTON IMPOSES A "TAX ON MANUFACTURERS" WHICH
SIMILARLY PROVIDES THAT EVERY PERSON "ENGAGING WITHIN THIS STATE IN
BUSINESS AS A MANUFACTURER" SHALL PAY A TAX ON SUCH BUSINESS "EQUAL TO
THE VALUE OF THE PRODUCTS  .. MANNUFACTURED, MULTIPLIED BY THE RATE OF
ONE-QUARTER OF ONE PER CENT." REV. CODE WASH. 82.04.240; WASH. LAWS
1949, C. 228, SEC. 1(B).  THEN IN A PROVISION ENTITLED "PERSONS TAXABLE
ON MULTIPLE ACTIVITIES" THE STATUTE ENDEAVORS TO INSURE THAT LOCAL
WASHINGTON PRODUCTS WILL NOT BE SUBJECTED BOTH TO THE "TAX ON
MANUFACTURERS" AND TO THE "TAX ON WHOLESALERS."  REV.  CODE WASH.
82.04.440; WASH. LAWS 1949, C. 228, SEC. 2-A.  PRIOR TO ITS AMENDMENT
IN 1950 THE EXEMPTIVE TERMS OF THIS "MULTIPLE ACTIVITIES" PROVISION
WERE DESIGNED SO THAT A WASHINGTON MANUFACTURER-WHOLESALER WOULD PAY
THE MANUFACTURING TAX AND BE EXEMPT FROM THE WHOLESALE TAX.  THIS
PROVISION, ON ITS FACE, DISCRIMINATED AGAINST INTERSTATE WHOLESALE
SALES TO WASHINGTON PURCHASERS FOR IT EXEMPTED THE INTRASTATE SALES OF
LOCALLY MADE PRODUCTS WHILE TAXING THE COMPETING SALES OF INTERSTATE
SELLERS.  IN 1950, HOWEVER, THE "MULTIPLE ACTIVITIES" PROVISION WAS
AMENDED, REVERSING THE TAX AND THE EXEMPTION, SO THAT A WASHINGTON
MANUFACTURER-WHOLESALER WOULD FIRST BE SUBJECTED TO THE WHOLESALE TAX
AND THEN, TO THE EXTENT THAT HE IS TAXED THEREUNDER, EXEMPTED FROM THE
MANUFACTURING TAX.  REV. CODE WASH. 82.04.440; WASH. LAWS 1950 (SPECIAL
SESSION), C. 5, SEC. 2.  SEE MCDONNELL & MCDONNELL V. STATE, 62 WASH.
2D 553, 557, 383 P.2D 905, 908.  THIS AMENDED PROVISION WOULD SEEM TO
HAVE ESSENTIALLY THE SAME ECONOMIC EFFECT ON INTERSTATE SALES BUT HAS
THE ADVANTAGE OF APPEARING NONDISCRIMINATORY. 

EVEN UNDER THE AMENDED "MULTIPLE ACTIVITIES" EXEMPTION, HOWEVER, AN
OUT-OF-STATE FIRM MANUFACTURING GOODS IN A STATE HAVING THE SAME
TAXATION PROVISIONS AS DOES WASHINGTON WOULD BE SUBJECTED TO TWO TAXES
ON INTERSTATE SALES TO WASHINGTON CUSTOMERS.  THE FIRM WOULD PAY THE
PRODUCING STATE A LOCAL MANUFACTURING TAX MEASURED BY SALES RECEIPTS
AND WOULD ALSO PAY WASHINGTON A TAX ON WHOLESALE SALES TO WASHINGTON
RESIDENTS.  UNDER SUCH TAXATION PROGRAMS, IF AN OUT-OF-STATE
MANUFACTURER COMPETES WITH A WASHINGTON MANUFACTURER, THE OUT-OF-STATE
MANUFACTURER MAY BE SERIOUSLY DISADVANTAGED BY THE DUPLICATIVE
TAXATION.  EVEN IF THE OUT-OF-STATE FIRM HAS NO WASHINGTON COMPETITORS,
THE IMPOSITION OF INTERSTATE SALES TAXES, WHICH ADD TO THE COST OF
PRODUCING, MAY DIMINISH THE DEMAND FOR THE PRODUCT IN WASHINGTON AND
THUS AFFECT THE ALLOCATION OF RESOURCES IN THE NATIONAL ECONOMY. 
MOREOVER, THE THREAT OF DUPLICATIVE TAXATION, EVEN WHERE THERE IS NO
COMPETITOR MANUFACTURING IN THE CONSUMING STATE, MAY COMPEL THE OUT-OF
STATE PRODUCER TO RELOCATE HIS MANUFACTURING OPERATIONS TO AVOID
MULTIPLE TAXATION.  THUS TAXES SUCH AS THE ONE UPHELD TODAY MAY
DISCOURAGE THE DEVELOPMENT OF MULTISTATE BUSINESS OPERATIONS AND THE
MOST ADVANTAGEOUS DISTRIBUTION OF OUR NATIONAL RESOURCES; THE ECONOMIC
EFFECT INHIBITS THE REALIZATION OF A FREE AND OPEN ECONOMY UNENCUMBERED
BY LOCAL TARIFFS AND PROTECTIVE DEVICES.  AS THE COURT SAID IN MCLEOD
V. J.E. DILWORTH CO., 322 U.S., AT 330-331: "THE VERY PURPOSE OF THE
COMMERCE CLAUSE WAS TO CREATE AN AREA OF FREE TRADE AMONG THE SEVERAL
STATES.  THAT CLAUSE VESTED THE POWER OF TAXING A TRANSACTION FORMING
AN UNBROKEN PROCESS OF INTERSTATE COMMERCE IN THE CONGRESS, NOT IN THE
STATES." 

IT MAY BE URGED THAT THE WASHINGTON TAX SHOULD BE UPHELD BECAUSE IT
TAXES IN A NONDISCRIMINATORY FASHION ALL WHOLESALE SALES, INTRASTATE AN
INTERSTATE, TO WASHINGTON PURCHASERS.  THE COMMERCE CLAUSE, HOWEVER,
WAS DESIGNED, AS MR. JUSTICE JACKSON SAID IN H.P. HOOD & SONS, INC., V.
DU MOND, 336 U.S. 525, 538, TO CREATE A "FEDERAL FREE TRADE UNIT" - A
COMMON NATIONAL MARKET AMONG THE STATES; AND THE CONSTITUTION THEREBY
PRECLUDES A STATE FROM DEFENDING A TAX ON INTERSTATE SALES ON THE
GROUND THAT THE STATE TAXES INTRASTATE SALES GENERALLY. 
NONDISCRIMINATION ALONE IS NO BASIS FOR BURDENING THE FLOW OF
INTERSTATE COMMERCE.  THE COMMERCE CLAUSE "DOES NOT MERELY FORBID A
STATE TO SINGLE OUT INTERSTATE COMMERCE FOR HOSTILE ACTION.  A STATE IS
ALSO PRECLUDED FROM TAKING ANY ACTION WHICH MAY FAIRLY BE DEEMED TO
HAVE THE EFFECT OF IMPEDING THE FREE FLOW OF TRADE BETWEEN STATES.  IT
IS IMMATERIAL THAT LOCAL COMMERCE IS SUBJECTED TO A SIMILAR
ENCUMBRANCE."  FREEMAN V. HEWIT, 329 U.S., AT 252.  A STATE THEREFORE
SHOULD NOT BE ENABLED TO PUT OUT-OF-STATE PRODUCERS AND MERCHANTS AT A
DISADVANTAGE BY IMPOSING A TAX TO "EQUALIZE" THEIR COSTS WITH THOSE OF
LOCAL BUSINESSMEN WHO WOULD OTHERWISE SUFFER A COMPETITIVE DISADVANTAGE
BECAUSE OF THE STATE'S OWN TAXATION SCHEME.  THE DISADVANTAGE STEMMING
FROM THE WHOLESALE SALES TAX WAS CREATED BY THE STATE ITSELF AND
THEREFORE THE FACT THAT THE STATE SIMULTANEOUSLY IMPOSES THE SAME TAX
ON INTERSTATE AND INTRASTATE TRANSACTIONS SHOULD NOT OBSCURE THE FACT
THAT INTERSTATE COMMERCE IS BEING BURDENED IN ORDER TO PROTECT THE
LOCAL MARKET.  (FN4) 

IN MY VIEW THE RULES SET FORTH IN NORTON CO. V. DEPARTMENT OF
REVENUE, SUPRA, REFLECT AN ATTEMPT TO ADHERE TO THE BASIC PURPOSES OF
THE COMMERCE CLAUSE.  THEREFORE, IN DEALING WITH UNAPPORTIONED TAXES ON
INTERSTATE SALES, I WOULD ADHERE TO THE NORTON RULES INSTEAD OF
DEPARTING FROM THEM BY ADOPTING A STANDARD OF "FAIRNESS."  I WOULD HOLD
THAT A MANUFACTURER OR WHOLESALER MAKING INTERSTATE SALES IS NOT
SUBJECT TO A STATE GROSS RECEIPTS TAX MERELY BECAUSE THOSE SALES WERE
SOLICITED OR PROCESSED BY AGENTS LIVING OR TRAVELING IN THE TAXING
STATE.  AS NORTON RECOGNIZED, A DIFFERENT RULE MAY BE APPLIED TO THE
TAXATION OF SALES SUBSTANTIALLY CONNECTED WITH AN OFFICE OR WAREHOUSE
MAKING INTRASTATE SALES.  THE TEST ADOPTED BY THE COURT TODAY, IF
FOLLOWED LOGICALLY IN FUTURE CASES, WOULD SEEM TO MEAN THAT STATES WILL
BE PERMITTED TO TAX WHOLLY INTERSTATE SALES BY ANY COMPANY SELLING
THROUGH LOCAL AGENTS OR TRAVELING SALESMEN.  SUCH A RULE MAY LEAVE ONLY
MAILORDER HOUSES FREE FROM STATE TAXES ON INTERSTATE SALES.  WITH FULL
SYMPATHY FOR THE REVENUE NEEDS OF STATES, I BELIEVE THERE ARE OTHER
LEGITIMATE MEANS OF RAISING STATE REVENUES WITHOUT UNDERMINING THE
COMMON NATIONAL MARKET CREATED BY THE COMMERCE CLAUSE.  I THEREFORE
RESPECTFULLY DISSENT. 

FN1  THE TAX PERIODS INVOLVED IN THIS CASE ARE FROM JANUARY 1, 1949,
THROUGH JUNE 30, 1953. 

FN2  WITH RESPECT TO THE VIEW THAT THE APPLICATION OF THE COMMERCE
CLAUSE DEPENDS UPON THE EXISTENCE OF ACTUAL, AS DISTINGUISHED FROM
POTENTIAL, MULTIPLE TAXATION, COMPARE FREEMAN V. HEWIT, 329 U.S. 249,
256:  "IT IS SUGGESTED  ..  THHAT THE VALIDITY OF A GROSS SALES TAX
SHOULD DEPEND ON WHETHER ANOTHER STATE HAS ALSO SOUGHT TO IMPOSE ITS
BURDEN ON THE TRANSACTIONS.  IF ANOTHER STATE HAS TAXED THE SAME
INTERSTATE TRANSACTION, THE BURDENSOME CONSEQUENCES TO INTERSTATE TRADE
ARE UNDENIABLE.  BUT THAT, FOR THE TIME BEING, ONLY ONE STATE HAS TAXED
IS IRRELEVANT TO THE KIND OF FREEDOM OF TRADE WHICH THE COMMERCE CLAUSE
GENERATED.  THE IMMUNITIES IMPLICIT IN THE COMMERCE CLAUSE AND THE
POTENTIAL TAXING POWER OF A STATE CAN HARDLY BE MADE TO DEPEND, IN THE
WORLD OF PRACTICAL AFFAIRS, ON THE SHIFTING INCIDENCE OF THE VARYING
TAX LAWS OF THE VARIOUS STATES AT A PARTICULAR MOMENT.  COURTS ARE NOT
POSSESSED OF INSTRUMENTS OF DETERMINATION SO DELICATE AS TO ENABLE THEM
TO WEIGH THE VARIOUS FACTORS IN A COMPLICATED ECONOMIC SETTING WHICH,
AS TO AN ISOLATED APPLICATION OF A STATE TAX, MIGHT MITIGATE THE
OBVIOUS BURDEN GENERALLY CREATED BY A DIRECT TAX ON COMMERCE." 

FN3  SEE NOTE 1, SUPRA. 

FN4  CF. BALDWIN V. G.A.F. SEELIG, INC., 294 U.S. 511, 523:  "TO GIVE
ENTRANCE TO THAT EXCUSE ("THE ECONOMIC WELFARE OF THE FARMERS OR OF ANY
OTHER CLASS OR CLASSES" OF LOCAL BUSINESSMEN) WOULD BE TO INVITE A
SPEEDY END OF OUR NATIONAL SOLIDARITY.  THE CONSTITUTION WAS FRAMED
UNDER THE DOMINION OF A POLITICAL PHILOSOPHY LESS PAROCHIAL IN RANGE. 
IT WAS FRAMED UPON THE THEORY THAT THE PEOPLES OF THE SEVERAL STATES
MUST SINK OR SWIM TOGETHER, AND THAT IN THE LONG RUN PROSPERITY AND
SALVATION ARE IN UNION AND NOT DIVISION."  SEE H.P. HOOD & SONS, INC.,
V. DU MOND, 336 U.S. 525, 532-539.