Unquestionably Congress may tax corporations organized under federal
laws upon their franchises; any sovereignty may tax the creatures of its
creation for the privilege of exercising their franchises; but how about
corporations chartered by the states and doing purely an intrastate
business? A state confers on John Doe and his associates the privilege
or franchise of doing business in a corporate capacity. Can Congress
impose a tax on the exercise of that privilege or franchise? The power
to tax involves the power to destroy.[1] If Congress can impose a tax of
one per cent., it can impose a tax of ten per cent. or fifty per cent.,
and thus impair or destroy altogether the value of corporate charters
for business purposes. Does Congress possess such a power? The
Constitution puts no express limitation on the right of Congress to levy
excises except that they shall be "uniform throughout the United
States." But there are certain implied limitations inherent in our dual
system of government. The sovereignty and independence of the separate
states within their spheres are as complete as are the sovereignty and
independence of the General Government within its sphere.[2] Neither may
interfere with or encroach upon the other.

[Footnote 1: _McCulloch vs. Maryland_, 4 Wheat., 316.]

[Footnote 2: _The Collector vs. Day_, 11 Wall., 113, 124.]

The right to grant corporate charters for ordinary business purposes is
an attribute of sovereignty belonging to the states, not to the General
Government. The United States is a government of enumerated powers. The
Constitution nowhere expressly confers upon Congress the right to grant
corporate charters, and it is well settled that this right exists only
in the limited class of cases where the granting of charters becomes
incidental to some power expressly conferred on Congress, e.g., the