expense involved in the issue and the necessary expense of regulation, its exaction constitutes an exercise of the power of taxation. In this sense therefore a license may exist without the imposition of a tax, and a tax may be imposed without the granting of a license. But as business, occupation or privilege taxes are usually collected through the issue of licenses, which are made conditions precedent of the right to carry on the business or occupation or to exercise the privilege, they are in effect licenses, and are commonly so termed.1 It is in view of this distinction between a license in the stricter sense and a tax, that the power is conferred in municipal charters to "license, tax or regulate."

The power of the State to tax foreign corporations for the privilege of doing business in its jurisdiction, irrespective of its right to tax the capital employed therein, has been already considered.2

A partnership, whether composed of non-residents or not, if it has a local office or place of business, and so does business in the State, is clearly subject to its taxing power, not only as to the assets employed by it in the State in such business, but also as to the privilege of conducting the business therein. Where the business of the partnership is thus localized in the State, and it enjoys the protection of the State's laws, it is obviously immaterial to the taxing jurisdiction of the State where the owners of the business are domiciled. The tax may be upon the assets employed in the business or upon the privilege of conducting the business in the State.3

The right to tax in such cases rests not upon the domicil of the partnership or person, as in ordinary personal property taxation, hereafter considered, but upon the fact

See License Tax Cases, 5 Wall. 462.

2 See supra, Chapter V.

3 Hopkins v. Baker Bros. & Co., 78 Md. 363, 22 L. R. A. 477.

that property is invested and business transacted in the State.

§ 410. License tax on emigrant agent sustained.

The comprehensive power of the State to tax employments is illustrated by the recent decision of the Supreme Court, sustaining a license tax imposed by the State of Georgia upon each emigrant agent or employer or employee of such agent doing business in that jurisdiction.1 It was urged that this was violative of the Fourteenth Amendment and impaired the right of free egress from the State. The court held however that it was a valid tax upon the occupation, that its purpose, connected as it was with the licenses upon other occupations, was altogether to gain revenue, and that no intention to prohibit the particular business could be imputed. The licenses only affected incidentally and remotely the volume of travel from the State or the freedom of contract.2

§ 411. Taxation and regulation under police power.

The power of taxation in the licensing of employments is closely allied to the police power of regulation. A license may be imposed for the purpose of regulating an employment as a police measure for the public safety and

1 Williams v. Fears, 179 U. S. 270.

2 In Fraser v. McConway, 82 Fed. Rep. 257, a tax levied by the State of Pennsylvania upon employers of foreign, unnaturalized males, authorizing a deduction of the amount of the tax from the wages of the employees, was held invalid as violative of the Fourteenth Amendment. In Joseph v. Randolph, 71 Ala. 499, a license tax of $250 exacted by the State of Alabama from all emigrant agents, who should contract in certain designated counties with laborers to remove them from the State, was held void as an indirect tax upon the citizen's right of free egress, operating to hinder his personal liberty, and therefore contrary to both the State and Federal constitutions. The court said that it was not a tax upon the right of hiring laborers, but its purpose was to prevent a free egress of laborers from the counties designated in the act.

also as a means of revenue. Thus the liquor traffic may be prohibited altogether by a State, or permitted under such regulations by way of licenses as the legislative power deems proper. As the legislature has the power to prohibit absolutely the sale of intoxicating liquors, it follows that it may impose any conditions or restraints upon the traffic which fall short of absolute prohibition, and these conditions and restraints may take the form of a licensefee exacted as compensation to the public.2

There is no necessary connection between a license and a tax upon the right to engage in a business. The former confers a privilege, the latter is levied for the exercise of a privilege. But both taxation and regulation may be effected in the form of a license by the same statute. This right to tax and regulate occupations for purposes of revenue and under the police power may be delegated by the State to municipalities, and the latter can then exercise such power without violation of due process of law.

§ 412. The Chicago Cigarette Ordinance sustained.

This was illustrated in the recent decision of the Supreme Court 3 sustaining an ordinance of the city of Chicago, which prohibited the sale of cigarettes except under a license costing one hundred dollars. The court said at page 188:

66

Regulations respecting the pursuit of a lawful trade or business are of very frequent occurrence in the various cities of the country, and what such regulations shall be and to what particular trade, business or occupation they shall apply, are questions for the State to determine, and their de

1 Bartemeyer v. Iowa, 18 Wall. 129; Beer Co. v. Massachusetts, 97 U. S. 25; Mugler v. Kansas, 123 U. S. 623.

2 State v. Bixman, 162 Mo. 1.

3 Gundling v. Chicago, 177 U. S. 183.

termination comes within the proper exercise of the police power by the State, and unless the regulations are so utterly unreasonable and extravagant in their nature and purpose that the property and personal rights of the citizen are necessarily, and in a manner wholly arbitrarily, interfered with or destroyed without due process of law, they do not extend beyond the power of the State to pass, and they form no subject for Federal interference."

The court held also that it was not a Federal question whether there was a delegation of power by the common council to the mayor, and the opinion concluded, p. 189:

"It is not a valid objection to the ordinance that it partakes of both the character of regulation and also that of an excise or privilege tax. The business is more easily subjected to the operation of the power to regulate, where a license is imposed for following the same, while the revenue obtained on account of the license is none the less legal because the ordinance which authorized it fulfills the two functions, one a regulating and the other a revenue function. So long as the State law authorizes both regulation and taxation, it is enough, and the enforcement of the of the ordinance violates no provision of the Federal Constitution."

It was not a Federal question whether the city was authorized by the State law to require the license fee. In that matter the decision of the Supreme Court of the State was conclusive. The Federal question, arising under the Fourteenth Amendment, was whether the State could authorize the passage of the ordinance.

§ 413. Limitations of power to impose license taxes.

But this power of the State to impose license taxes upon occupations must be exercised subject to the prohibitions already considered against interference with interstate or foreign commerce. The State cannot tax the business of

conducting interstate commerce as such, nor the soliciting of orders through sales by samples or otherwise, nor can it discriminate through business or occupation taxes against the manufacturers of other States.1

Although the State may license occupations, it is not relieved from the restraints of the Federal Constitution in the taxation of the property employed in such occupations. This, like any other property, is entitled to due process of law and the equal protection of the laws in taxation as in any other exercise of State powers.

§ 414. Jurisdiction over persons for taxation.

While the State, in the exercise of the power of taxation, may disregard the fiction that personal property has its situs at the residence of the owner, and may tax all property which it can find located within its jurisdiction, it may also through its power over persons within its jurisdiction, subject credits and other personal property owned by them to taxation, though such property may be located in another State, and, in the case of credits, owed by debtors residing in other States and secured by property situated there.

But the taxing power of the State over persons obviously depends upon the domicil of the person, as domicil is the test of liability for purely personal taxes.2 Domicil, or habitation, in the quaint language of the Massachusetts constitution, is "where a man dwelleth and hath his home."

Justice Story says:3" By the term domicil,' in its ordinary acceptation, is meant the place where a person lives or has his home. In this sense the place where a person has his actual residence, inhabitancy, or commorancy, is sometimes called his domicile. In a strict and legal sense that is properly the domicile of a person where

1 Supra, Chapters III to VI.

2 Dicey on Conflict of Laws, Am. Ed., 171.

3 Conflict of Laws, 7th Ed., § 41.