Mahoney, P. J., and Herlihy, J., dissent and vote to confirm in the following memorandum by Herlihy, J. We join in the majority opinion as to the conclusion that the tax at issue herein does not violate the requirements of due process or equal protection. However, while petitioner’s view of the Federal treatment of income derived from domestic corporations *990engaged in export activities as regulating foreign commerce has some merit, the fact remains that the Internal Revenue Code does not exempt the income from taxation. The tax imposed herein is based upon the taxpayer’s relationship to the wholly owned subsidiary and is unrelated to the subsidiary’s function of overseas sales — foreign commerce. Petitioner has failed to demonstrate any tax imposed on foreign commerce or any implicit prohibition on the power of the State to allocate net income to the shareholder as a portion of income subject to the New York State franchise tax. Upon the present record, the inference that the Internal Revenue Code is an exclusive regulation of foreign commerce is speculative and does not suffice to overcome the presumption of the constitutionality of the New York statute. The determination of the Tax Commission should be confirmed, and the petition dismissed.