The State which incorporates, and that State only, may tax the franchise of a corporation, that is, its right to be and operate as a corporation. In Louisville & Jeffersonville Ferry Co. v. Kentucky63 the court say, with reference to the attempt of Kentucky to include for purposes of taxation the valuation of a ferry franchise granted to Indiana: "Beyond all question, the ferry franchise derived from Indiana is an incorporeal hereditament derived from and having its legal situs in that State. It is not within the jurisdiction of Kentucky. The taxation of that franchise or incorporeal hereditament by Kentucky is, in our opinion, a deprivation by that State of the property of the ferry company without due process of law in violation of the Fourteenth Amendment of the Constitution of the United States; as much as if the State taxed the real estate owned by that company in Indiana."

It would seem, however, that the franchise or permission granted a foreign corporation to do business in a State may be taxed as property in that State. Also, of course, a yearly payment by the companies may be required by that State as a condition precedent to doing business in that State, but such payments partake more of the nature of a license fee than of a tax.

62 In a dissenting opinion, concurred in by Justice Brewer, Justice Day declared: "In view of the recognition of the character of bills and notes as tangible property, it seems to me inaccurate to say that they are mere evidences of debt. They are tangible things, capable of delivery, passing from hand to hand, and for many purposes may be regarded as of the value of the debt which they evidence."

63 188 U. S. 385; 23 Sup. Ct. Rep. 463; 47 L. ed. 513.

As regards a domestic corporation, a State may tax not only its property, and its franchise (valuing that franchise by net or gross receipts) but also may tax, as property, privileges or rights which it may have granted, as, for example, the use of the public streets. The fact that, at the time of the granting of this right or privilege, payment was made therefor by the company, either in the form of a lump sum or a continuing annual amount, does not exempt that right from taxation according to its pecuniary value, any more than does the purchase of a piece of land from the State and payment therefor exempt it from future taxation as property.64