Allied Stores of Ohio, Inc. v. Bowers

In Allied Stores v. Bowers, 358 U. S. 522 (1959), the Supreme Court noted that the State was "dealing with its proper domestic concerns, and not trenching upon the prerogatives of the National Government." 358 U. S., at 526. When such is the case, the State's power to classify is, indeed, extremely broad, and its discretion is limited only by constitutional rights and by the doctrine that a classification may not be palpably arbitrary. Id., at 526-528. But where taxation of the private use of the Government's property is concerned, the Government's interests must be weighed in the balance. Accordingly, it does not seem too much to require that the State treat those who deal with the Government as well as it treats those with whom it deals itself. In Allied Stores of Ohio, Inc. v. Bowers, U. S. 522 (1959), the Supreme Court sustained an Ohio statute exempting non-residents from an ad valorem tax on certain property held in a storage warehouse, but not exempting Ohio residents from the tax. Without alluding to any possibility that legislative classifications based on State of incorporation should be subject to a different standard from other classifications, the Court held that state tax laws "must proceed upon a rational basis and may not resort to a classification that is palpably arbitrary." Id., at 527.