The general power of the state to tax all property within its jurisdiction extends to property which, although it has been brought into the state as a subject of foreign or interstate commerce, is owned in the state or is otherwise subject to its jurisdiction for taxation purposes; but the state cannot levy taxes on property, which is a subject of interstate or foreign commerce, that is, while it is actually being transported through the state or from a point in the state to some point in another state or a foreign country. The exemption of such property from taxation commences when the transportation commences and continues so long as the transportation continues. The mere fact, however, that goods are manufactured or otherwise prepared to be sold outside of the state does not exempt them from state taxation or from state regulations until they have actually become subjects of commerce by the commencement of transportation to another state or country. (See Kiddy.Pearson.) On similar reasoning it has been held that the anti-trust and combination statutes passed by Congress in the exercise of its power to regulate interstate and foreign commerce (Act of 1890, known as the Sherman Act) have no application to trusts and combinations affecting the manufacture of goods in a state, for the reason that such trusts and combinations are subject only to state regulation (United States v. E. C. Knight Company).

But the state taxing power cannot be so exercised as to impose specific burdens upon persons or corporations engaged in interstate or foreign commerce. Thus it has been held (Philadelphia, etc. Steamship Co. v. Pennsylvania) that a state tax on the gross receipts of a railway company or a steamship line is unconstitutional if a substantial part of such receipts are from interstate or foreign commerce. Likewise a specific tax on a telegraph company based upon its gross receipts for the transmission and delivery of telegrams is unconstitutional if the company is engaged in transmitting messages to or from other states and countries. (See Telegraph Co. v. Texas.) It is entirely proper, however, to require corporations engaged in interstate commerce to pay taxes in the state based on the value of their business within its limits, and it may properly be required that a corporation transacting such business in the state shall pay state taxes in accordance with the entire amount or profits of its business in all the states in which it operates, proportioned to the share of that business which is done in the state which levies the tax. (See Adams Express Company v. Ohio State Auditor, and Allen v. Pullman Palace Car Co.). But the state cannot impose a tax upon the entire capital stock of a foreign corporation engaged in interstate commerce as a condition to allowing it to also do local business. (Western Union Tel. Co. v. Kansas.)