Cite as: 526 U. S. 160 (1999)
Opinion of the Court
firm's financial status. Id., at 53a-54a; Ala. Code §§ 40-14- 41(b)(1)-(5), (c) (Supp. 1998).
In 1986, the Reynolds Metals Company and three other foreign corporations sued Alabama's tax authorities, seeking a refund of the foreign franchise tax they had paid on the ground that the tax discriminated against foreign corporations. Although the tax favored foreign firms in some respects (granting them a lower tax rate and excluding any capital not employed in Alabama), that favorable treatment was more than offset by the fact that a domestic firm, unlike a foreign firm, could shrink its tax base significantly simply by setting the par value of its stock at a low level. As a result, Reynolds Metals said, the tax burden borne by foreign corporations was much higher than the burden on domestic corporations, and the tax consequently violated both the Commerce and Equal Protection Clauses. U. S. Const., Art. I, § 8, cl. 3, and Amdt. 14, § 1.
The Alabama Supreme Court rejected these claims. White v. Reynolds Metals Co., 558 So. 2d 373 (1989). Without denying that the franchise tax imposed a special burden upon foreign corporations, the court nonetheless thought that this special burden simply offset a different burden imposed exclusively upon domestic corporations by Alabama's "domestic shares tax." This latter tax is a property tax on shares of domestic stock; it is assessed against shareholders based upon the value of the shares they hold, but in practice it is normally paid by the corporation itself. Id., at 386-388 (citing, e. g., Gregg Dyeing Co. v. Query, 286 U. S. 472 (1932) (permitting taxes that discriminate against interstate commerce when they compensate for burdens placed uniquely upon domestic commerce)). Any remaining discrimination, the court concluded, was constitutionally insignificant. 558 So. 2d, at 388-390.
While the Alabama courts were considering Reynolds Metals, a different foreign corporation, South Central Bell Telephone Company, brought the lawsuit now before us.
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