170
Opinion of the Court
neford v. Silas Mason Co., 300 U. S. 577 (1937) (upholding a facially discriminatory use tax as "complementary" to a domestic sales tax). Our cases hold that a discriminatory tax cannot be upheld as "compensatory" unless the State proves that the special burden that the franchise tax imposes upon foreign corporations is "roughly . . . approximate" to the special burden on domestic corporations, and that the taxes are similar enough "in substance" to serve as "mutually exclusive" proxies for one another. Oregon Waste Systems, 511 U. S., at 103; accord, Fulton, supra, at 332-333.
In this case, however, the relevant tax burdens are not "roughly approximate." See App. to Pet. for Cert. 36a-37a (plaintiffs' statement of facts, showing that the foreign franchise tax burden far exceeds the domestic franchise tax and the domestic shares tax combined); Mem. Op. 21a, n. 7 (adopting plaintiffs' statement of facts); cf. 711 So. 2d, at 1011 (See, J., dissenting) (in the face of the State's "indefinite assertion," plaintiffs offered "substantial evidence . . . that the foreign franchise tax exceeds any intrastate burden" imposed through the higher franchise tax rate and the domestic shares tax). And the State has made no effort to persuade this Court otherwise.
Nor are the two tax burdens similar in substance. Alabama imposes its foreign franchise tax upon a foreign firm's decision to do business in the State; Alabama imposes its domestic shares tax upon the ownership of a certain form of property, namely, shares in domestic corporations. Compare Ala. Code § 40-14-41 with § 40-14-70 (1993 and Supp. 1998). No one has explained to us how the one could be seen as a "proxy" for the other.
Rather than dispute any of these matters, the State instead says, with "respect to the merits," that "the flaw in petitioners' claim lies not in the application to Alabama's corporate franchise tax of this Court's recent negative Commerce Clause cases; the flaw lies rather in the negative Commerce Clause cases themselves." Brief for Respondents 3.
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