136 Opinion of the Court. ize the company, corporation or association to whom it is issued to transact business until the first day of March of the ensuing year, unless sooner revoked or forfeited. The payment of such license fee shall be in lieu of all taxes for any purpose authorized by the laws of this state, except taxes on such real estate as may be owned by such company, corporation or association." In annual reports the Company disclosed all receipts derived from interest on United States bonds and claimed they were exempt from taxation under the Constitution and laws of the United States. The revenue officers acted upon another view, and both courts below have held that they rightly disregarded the source of the receipts and properly assessed sums reckoned upon the Company's entire gross income. Counsel for the State maintain that the effect of § 76.34. is to impose upon domestic insurance companies a privilege or franchise tax, and not one on property or income; that no charge is laid upon bonds of the United States, but the fee exacted is for granted privileges, including exemption from personal property taxation and right to do business; that the State may require domestic corporations to pay privilege, franchise or license taxes measured by gross income, although partly derived from United States bonds; and that in no proper sense can the challenged tax be regarded as one directly imposed upon gross income. They also suggest that this Court has interpreted the statute and pointed out its real nature. Northwestern Mutual Life Ins. Co. v. State of Wisconsin, 247 U. S. 132, 137. Speaking there of this same statute we did declare: The tax in question is, therefore, not only one for the privilege of doing life insurance business within the State, but is in effect a commutation tax, levied by the State in place of all other taxation upon the personal property of Opinion of the Court. 275 U.S. the company in the State of Wisconsin." But no question was then raised concerning taxation of income derived from United States bonds. The point now presented was not involved. It cannot be denied (and denial is not attempted) that bonds of the United States are beyond the taxing power of the states. Home Savings Bank v. City of Des Moines, 205 U. S. 503, 509; Farmers & Mechanics Bank v. Minnesota, 232 U. S. 516; and First National Bank v. Anderson, 269 U. S. 341, 347. Certainly since Gillespie v. Oklahoma, 257 U. S. 501, 505, it has been the settled doctrine here that where the principal is absolutely immune, no valid tax can be laid upon income arising therefrom. To tax this would amount practically to laying a burden on the exempted principal. Accordingly, if the challenged Act, whatever called, really imposes a direct charge upon interest derived from United States bonds, it is pro tanto void. The fundamental question, often presented in cases similar to these, is whether by the true construction of the statute the assessment must be regarded as a tax upon property or one on privileges or franchise of the corporation. Society for Savings v. Coite, 6 Wall. 594; Home Insurance Co. v. New York, 134 U. S. 594. Section 76.34 undertakes to impose a charge not measured by dividends paid, as in Home Insurance Co. v. New York, 134 U. S. 594, nor by net income, as in Flint v. Stone Tracy Co., 220 U. S. 107; and those cases are not controlling. The distinction between an imposition the amount of which depends upon dividends or net receipts and one measured by gross returns is clear. U. S. Glue Co. v. Town of Oak Creek, 247 U. S. 321, 328, and earlier opinions there cited. It is important to observe that although a state statute may properly impose a charge which materially affects in 136 Opinion of the Court. terstate commerce, without so unreasonably burdening it as to become a regulation within the meaning of the Constitution, no state can lay any charge on bonds of the United States. This distinction was adverted to in Gillespie v. Oklahoma, 257 U. S. 501, 505, and the principle found application in Choctaw & Gulf R. R. Co. v. Harrison, 235 U. S. 292, and Indian Territory Ill. Oil Co. v. Oklahoma, 240 U. S. 522. The power to tax property necessary to the conduct of interstate commerce has been often upheld; and without doubt the states by apt enactments may tax the ordinary property, franchises or business of their own corporations. A taxing act which requires payment of a certain percentage of the gross earnings of an interstate carrier but which practically imposes no more than the ordinary charge upon local property may be sustained. U. S. Ex'press Co. v. Minnesota, 223 U. S. 335, Cudahy Packing Co. v. Minnesota, 246 U. S. 450. But if the enactment goes further and burdens property beyond the state, as in Union Tank Line Co. v. Wright, 249 U. S. 275, or amounts to a direct imposition upon interstate commerce itself, as in Galveston Ry. Co. v. Texas, 210 U. S. 217, or lays an impost upon exports, as in Crew Levick Co. v. Pennsylvania, 245 U. S. 292, it violates the Federal Constitution. Here the statute undertook to impose a charge of 3 per cent. upon every dollar of interest received by the Company from United States bonds. So much, in any event, the State took from these very receipts. This amounts, we think, to an imposition upon the bonds themselves and goes beyond the power of the State. The judgment below is reversed; and the cause will be remanded to the Supreme Court of the State of Wisconsin for further proceedings not inconsistent with this opinion. Reversed. Argument for Blodgett. 275 U.S. 1 BLODGETT v. HOLDEN, COLLECTOR 1 CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT. No. 154. Argued October 4, 1927.-Decided November 21, 1927. 1. The Revenue Act of 1924, §§ 319-324, in so far as it undertakes to impose a tax on gifts fully consummated before its provisions taxing gifts came before Congress, is invalid under the Due Process Clause of the Fifth Amendment. McReynolds, J.; Taft, C. J., and Van Devanter and Butler, JJ., concurring. P. 147. 2. The provision of the Act in question should be construed, in favor of constitutionality, as meant to operate only from the date of the Act, and only to tax gifts thereafter made. Holmes, J.; Brandeis, Sanford, and Stone, JJ., concurring. P. 149. RESPONSE to questions certified by the Circuit Court of Appeals arising upon review by it of a judgment of the District Court, 11 F. (2d) 180, in favor of the defendant, in a suit to recover money exacted of the plaintiff, Blodgett, by Holden, Collector, as a tax on gifts. Mr. Mark Norris for Blodgett. This "gift" tax is an unapportioned "direct" tax and therefore in contravention of Art. I, cl. 3, § 2, and cl. 4, § 9 of the Constitution. The tax, so far as it affects the plaintiff in this case, has deprived him of property without compensation and without due process of law contrary to the Fifth Amendment. McCray v. United States, 195 U. S. 27; Barclay v. Edwards, 267 U. S. 442; Schlesinger v. Wisconsin, 270 U. S. 230; Hammer v. Dagenhart, 247 U. S. 251; Child Labor Case, 259 U. S. 20; Hill v. Wallace, 259 U. S. 44. Distinguishing, Stockdale v. Ins. Co., 20 Wall. 323; Flint v. Store 1 The first of the two opinions is here published as modified by a memorandum decision of Feb. 20, 1928, to be found in the next volume. 142 Argument for Holden. Co., 220 U. S. 111; Brushaber v. U. P. R. R., 240 U. S. 1; Patton v. Brady, 184 U. S. 608; Billings v. United States, 232 U. S. 261; Schwab v. Doyle, 258 U. S. 529; Hecht v. Malley, 265 U. S. 144. See McNeir v. Anderson, 10 F. (2d) 813; Anderson v. McNeir, 16 F. (2d) 970; Brown v. Maryland, 12 Wheat. 444. Mr. Alfred A. Wheat, Special Assistant to the Attorney General, with whom Solicitor General Mitchell and Mr. Robert P. Reeder, Special Assistant to the Attorney General, were on the brief, for Holden, Collector. The tax upon transfers of property by gift is not a direct tax but an excise tax. It is not unconstitutional as applied to transfers of property by gift during the earlier portion of the year in which the law was passed. It is clearly established that retroactive legislation is not unconstitutional as such. The Constitution forbids Congress to enact ex post facto laws and it forbids the States to enact ex post facto laws and laws impairing the obligation of contracts, but with these express exceptions neither federal nor state legislation is unconstitutional because it is retroactive. See Calder v. Bull, 3 Dall. 386; The Peggy, 1 Cr. 103; Prize Cases, 2 Black. 635; Johannessen v. United States, 225 U. S. 227; Satterlee v. Matthewson, 2 Pet. 380; Curtis v. Whitney, 13 Wall. 68; Kentucky Union Co. v. Kentucky, 219 U. S. 140. This Court has sustained state tax laws which were retroactive in scope, Carpenter v. Pennsylvania, 17 How. 456; Locke v. New Orleans, 4 Wall. 172; Seattle v. Kelleher, 195 U. S. 351; State v. Bell, 61 N. C. 76; and it has sustained similar federal taxes, Stockdale v. Ins. Cos., 20 Wall. 323; Railroad Co. v. Rose, 95 U. S. 78; Billings v. United States, 232 U. S. 261. The certificate from the Circuit Court of Appeals states that the gifts under consideration were made between January first and the approval of the law, but it |