STATE TAXATION OF MANUFACTURING AND MINING
Under the above rule, obviously, production is not interstate commerce even though the thing produced is intended for the interstate market. Thus a Pennsylvania _ad valorem_ tax on anthracite coal when prepared and ready for shipment was held not to be an interference with interstate commerce although applied to coal destined for a market in other States;[542] and in Oliver Iron Company _v._ Lord[543] an occupation tax on the mining of iron ore was upheld, although substantially all of the ore was immediately and continuously loaded on cars and shipped into other States. Said the Court: "Mining is not interstate commerce, but, * * * subject to local regulation and taxation. Its character in this regard is intrinsic, is not affected by the intended use or disposal of the product, is not controlled by contractual engagements, and persists even though the business be conducted in close connection with interstate commerce."[544] Likewise an annual privilege tax on the business of producing natural gas in the State, computed on the value of the gas produced "as shown by the gross proceeds derived from the sale thereof by the producer," was held constitutional even though most of the gas passed into interstate commerce in continuous movement from the wells.[545] And in Utah Power and Light Co. _v._ Pfost[546] the generation of electricity in a State was held to be distinguishable from its transmission over wires to consumers in another State, and hence taxable by the former State. Likewise, a State statute imposing a privilege tax on the production of mechanical power for sale or use did not contravene the interstate commerce clause although applied to an engine operating a compressor to increase the pressure of natural gas and thereby permit it to be transported to purchasers in other States.[547] Similarly, a tax so much per pound on shrimp taken within the three-mile belt of the coast of the taxing State was valid, since the taxable event, the taking of the shrimp, occurred before they could be said to have entered the interstate commerce stream.[548]
But while the production of goods intended for the interstate market is taxable by the State where it takes place, their purchase for an established market in another State is interstate commerce and as such is neither regulatable nor taxable by the State of origin, provided at any rate their trans-shipment is not unduly delayed.[549] Thus, oil gathered into the pipe lines of a distributing company and intended for the most part for customers outside the State, is in interstate commerce from the moment it leaves the wells;[550] and a like result has been reached as to natural gas.[551] "The typical and actual course of events," says the Court, "marks the carriage of the greater part as commerce among the States and theoretical possibilities may be left out of account."[552]