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Opinion of the Court
but, at most, a particular form of corporate organization that is burdened.
This argument is not persuasive. Whether or not the suggested methods of tax avoidance would be practical as a business matter, and whether or not they might generate adverse tax consequences in other jurisdictions, we do not think that a State can force a taxpayer to conduct its foreign business through a domestic subsidiary in order to avoid discriminatory taxation of foreign commerce. Cf. Metropolitan Life Ins. Co. v. Ward, 470 U. S. 869, 878-879 (1985). We have previously found that the Commerce Clause is not violated when the differential tax treatment of two categories of companies "results solely from differences between the nature of their businesses, not from the location of their activities." Amerada Hess Corp. v. Director, Div. of Taxation, N. J. Dept. of Treasury, 490 U. S. 66, 78 (1989).20 We find no
authority for the different proposition advanced here that a tax that does discriminate against foreign commerce may be upheld if a taxpayer could avoid that discrimination by changing the domicile of the corporations through which it conducts its business. Our cases suggest the contrary. See Westinghouse Electric Corp. v. Tully, 466 U. S. 388, 406 (1984); Halliburton Oil Well Cementing Co. v. Reily, 373 U. S. 64, 72 (1963).
Repeating the argument that prevailed in the Iowa Supreme Court, Iowa next insists that its tax system does not violate the Commerce Clause because it does not favor local interests. To the extent corporations do business in Iowa, an apportioned share of their entire corporate income is subject to Iowa tax. In the case of a foreign subsidiary doing business abroad, Iowa would tax the dividends paid to the domestic parent, but would not tax the subsidiary's earnings.
20 In Amerada Hess, we rejected the contention that a New Jersey tax violated the Commerce Clause because it "discriminate[d] against oil producers who market their oil in favor of independent retailers who do not produce oil." 490 U. S., at 78.
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