A congressional statute that became law on September 14, 1959,severely curtails the power of all state and local governments to impose net income taxes. This statute was the aftermath of the Northwestern-Stockham decision, and a series of cases soon to follow, by the United States Supreme Court, which held that neither the due process nor the commerce clause bars the way to a nondiscriminatory, properly apportioned state tax levied directly on net income derived exclusively from interstate commerce. These decisions by the Supreme Court caused such a furor in the business world that demands were soon made on Congress for protection against the suddenly publicized danger of future, as well as retroactive taxes. It was feared hat not only would the states widen their tax-gathering net in the future, but also collect any possible back taxes.
Paul J. Hartman,
State and Local Taxation -- 1960 Tennessee Survey,
13 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol13/iss4/25