a state can constitutionally tax income received by one of its own citizens from real estate situated in another state or from tangible personal property permanently located in another state, since an income tax on such property is a property tax, and real estate and tangible personal property cannot be subjected to a property tax at the domicile of the owner when it has a situs in another state." A state may also impose income taxes upon non-residents with respect to income accruing to them from their property located or business carried on within the state, provided only that such taxes are of like character to the taxes imposed upon residents of the state and not more onerous in their effect." When a non-resident or a foreign corporation carries on business both within and without a state, it is often a matter of difficulty to determine the proportion of the income attributable to the state levying the tax, and a rule or formula for allocating the income may be constitutionally established even if it does not work with precision in every case, provided it is not wholly arbitrary and unreasonable." 50. Territorial Jurisdiction for the Collection of Taxes There is no good reason why a tax upon real or personal property of a non-resident situated within the limits of a state cannot be assessed to the owner rather than in rem against the particular property to which it relates. If the owner is a foreign corporation, not engaged in interstate commerce or in the service of the federal government, payment of the tax can be enforced by restraining it from doing business in the state until the tax is paid. In the case of an individual non-resident there is how3 See supra, §§ 8, 42, 43. 4 Shaffer v. Carter, 252 U. S. 37 (1920); Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920); Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920). See also H. P. Hood & Sons v. Commonwealth, 235 Mass. 572 (1920). 5 Thus a state statute which imposes a tax on all income of residents, and on income of non-residents earned within the state, and allows an exemption to residents but not to non-residents is unconstitutional. Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920). Thus in Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920), a state statute was sustained which taxed foreign corporations engaged in selling tangible personal property upon the same proportion of their aggregate net income as their tangible property within the state bore to their aggregate tangible property. 1 Scollard v. American Felt Co., 194 Mass. 127 (1907). 2 Scollard v. American Felt Co., 194 Mass. 127 (1907). 3 ever.grave doubt whether such a remedy is available. At any rate it appears to be settled that a tax upon a non-resident on account of his property within a state cannot be made a personal liability against him but may be enforced only against his property within the state. But a tax upon the property of a non-resident decedent kept within the state may be proved as a claim against his estate in the state in which the property is kept; and a state may constitutionally impose as a condition in the charter of a corporation that the tax on the shares owned by non-resident stockholders shall be a personal liability. If a resident of a state leaves the state with all his property after the assessment of a tax upon him he cannot be sued for the amount of the tax in the state to which he has gone; for tax laws have no extra-territorial effect, and the courts of one state will not enforce the revenue laws of another state." THE CONSTITUTION OF MASSACHUSETTS 51. The Limitations on the Taxing Power in the The constitution of Massachusetts contains in Part II, Chapter 1, Section 1, Article IV, the following provision: And further full power and authority are hereby given and granted to the said General Court to impose and levy proportional and reasonable assessments, rates and taxes upon all the inhabitants of, and persons resident and estates lying within the said commonwealth; and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise and commodities, whatsoever, brought into, produced, manufactured or being within the same. The charter of the Massachusetts Bay Company under which the colony of Massachusetts Bay was administered from its first settlement until the revocation of the charter in 1691 did not in terms grant authority to the company to levy taxes in the territory occupied under the charter. Authority to provide 3 Dewey v. Des Moines, 173 U. S. 193 (1899). 4 Bristol v. Washington County, 177 U. S. 133 (1900). 5 Corry v. Baltimore, 196 U. S. 466 (1905). 6 Wisconsin v. Pelican Insurance Co., 127 U. S. 265 (1888). for the government of the colony was however granted in such broad language that the power to levy taxes was included by plain implication, and as early as 1630 taxes on all the property in the colony were levied by the court of assistants for general purposes. Excises, including duties on imports, were also imposed during the colonial period. The province charter of 1691 gave to the general court "full power and authority to impose and levy proportionable and reasonable assessments, rates and taxes, upon the estates and persons of all and every the proprietors and inhabitants of our said province and territory." The direct taxes assessed during this period seem to have been intended to be proportional; that is, to require all property within the same taxing district to pay the same proportion of its value, and to authorize only such exemptions as were based on public service or inability to pay. Provisions for the assessment of certain articles at a fixed value seem to have been intended rather for facilitating the work of the assessors and promoting uniformity than as a partial exemption of such property. In spite of the lack of specific 1 The history of taxation in Massachusetts during the colonial and provincial periods shows a constant effort to attain a system of equal and proportional taxation without attempting to tax all property at the same rate regardless of its character. Taxes were levied as early as 1630, but until 1646 no provision was contained in the annual tax acts as to the mode or basis of assessment other than directions that the taxes be "equal and proportionable." In 1646 provision was made for the assessment of live stock, then the most valuable class of property in the colony, at fixed figures for each kind of animal. All other property real and personal was to be taxed at its actual value. This method of taxation continued without substantial change during the whole of the colonial period, except that in 1651 it was specifically provided that the estate of merchants and traders be assessed and in 1682 the taxation of unimproved land at a fixed rate was established. After the grant of the province charter in 1692 the general court experimented with various forms of taxation. There was first enacted a tax on all property, real and personal, on its yearly value (St. 1692-3 c. 4). This did not produce the desired revenue and during the next seven years various methods of taxation were experimented with among them a tax on all property at its market value (St. 1696, c. 3, c. 16; St. 1697, c. 6, c. 23), which apparently did not prove satisfactory for it was abandoned until the period of the Revolution. In 1700 a system was adopted which was retained with minor changes until 1777, by which live stock was assessed at fixed valuations as per schedule, other personal property at its market value, and real estate at a fixed number of times its rent or annual value. (St. 1699-1700 c. 27.) The only material change in the form of the statute, which was probably only declaratory of the existing law, came in 1738 when it was provided that the income or profit which any person should receive from business or employment "and all profits which may or shall arise by money or other estate not particularly otherwise assessed" should be taxed at the same rate as other personal property (St. 1738-9 c. 1). This statute apparently required the taxation of money at interest upon its income and not upon its capital value. authority excises were imposed with great frequency during the whole of the provincial period. In the original draft of the constitution of the commonwealth the only power or authority relating to taxation given to the general court was a clause substantially taken from the corresponding clause of the province charter; but in the form finally adopted some further slight verbal modifications were made in the clause relating to assessments, rates and taxes and the subsequent clause relating to duties and excises was added. Since the adoption of the constitution no change has been made in the provisions relating to taxation except the amendment relating to forest lands adopted in 1912,2 the income tax amendment adopted in 1915 and the various amendments restricting or extending the purposes for which taxes may be levied set forth in another section.* 3 It is a general principle of constitutional law that the provisions of a written constitution are not grants of power from the people to the government but are limitations upon a power which would otherwise be absolute, and consequently no act of the legislative body is unconstitutional unless it violates some specific provision of the constitution. Nevertheless, although there is nothing in the constitution of Massachusetts which in terms prohibits taxes that are disproportionate or excises that During the first two years under the Revolutionary Government the provincial tax system was retained except that income from money at interest and "extraordinary" occupational incomes were assessed at three times their annual amount. (St. 1775-6, c. 6; 1776–7, c. 13.) In 1777 however the classified system of taxation was abandoned, probably because no schedule of values could keep pace with the rapid changes in valuation which accompanied the war, and provision was made for the assessment of all property, real and personal, at its "current price" (St. 1777-8, c. 13). Income from money at interest and "extraordinary" occupational incomes were assessed at as high as ten times the annual amount before the war was over, apparently in an attempt to reach what we would now call excess profits due to war conditions. The first tax act under the constitution established the system of taxation prevalent during most of the nineteenth century. That is a tax at the same rate on all real and personal estate, at its market value, and on all occupational incomes at their actual amount. (St. 1780, c. 43.) In the following year however it was provided that unimproved real estate should be assessed at two per cent of its value and all other real and personal estate at six per cent of its value; and this discrimination continued until 1828 (St. 1828, c. 143). From 1829 until the enactment of the income tax act in 1916 the so-called proportional system of taxation remained in force. 2 Infra, G. L. c. 61. 3 Infra, G. L. c. 62. are either unreasonable or imposed upon subjects other than those designated, it has been uniformly held that the clause in question was intended to cover the whole subject of taxation and to exclude by plain implication any pecuniary imposition laid for the purpose of raising revenue for public uses not in accordance with its provisions.5 52. Proportional Taxation under the Constitution of Massachusetts In spite of the variety of methods of proportional taxation that were practised in the colonial and provincial periods, the provision in the constitution of Massachusetts giving authority to the legislature to levy proportional and reasonable taxes, taken in connection with the subsequent provision that "while the public charges of government or any part thereof shall be assessed on polls and estates in the manner that has been hitherto practised, in order that such assessments may be made with equality there shall be a valuation of estates within the commonwealth taken anew once in every ten years at least and as much oftener as the general court shall order" has been consistently construed by the courts as establishing the principle of uniformity of taxation of all classes of taxable property and as requiring that all property within the commonwealth which is owned and held in such a way that it ought to be available to its owner to increase his ability or enlarge his duty to assist in defraying the expenses of the government must be included in the aggregate of property upon which assessments are made1 and that all such property 5 Portland Bank v. Apthorp, 12 Mass. 252 (1815); Commonwealth v. People's Five Cent Savings Bank, 5 Allen 428 (1862); Oliver v. Washington Mills, 11 Allen 268 (1865); Dorgan v. Boston, 12 Allen 223 (1866); Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866); Commonwealth v. Provident Institution for Savings, 12 Allen 312 (1866); Providence Institution for Savings v. Boston, 101 Mass. 575 (1869); Cheshire v. Berkshire County Commissioners, 118 Mass. 386 (1875); Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882); Gleason v. McKay, 134 Mass. 419 (1883); Northampton v. Hampshire County Commissioners, 145 Mass. 108 (1887); Minot v. Winthrop, 162 Mass. 113 (1894); Day v. Lawrence, 167 Mass. 371 (1897); White v. Gove, 183 Mass. 333 (1903); O'Keeffe v. Somerville, 190 Mass. 110 (1906); Opinion of the Justices, 195 Mass. 607 (1908); Opinion of the Justices, 196 Mass. 602 (1908); Opinion of the Justices, 208 Mass. 616 (1911); Opinion of the Justices, 220 Mass. 613 (1915); Perkins v. Westwood, 226 Mass. 268 (1917). 1 Portland Bank v. Apthorp, 12 Mass. 252 (1815); Commonwealth v. People's Savings Bank, 5 Allen 428, 431 (1862); Oliver v. Washington Mills, 11 Allen 268 (1865); Commonwealth v. Hamilton Manufacturing Co., 12 |