Defendants in this case appeal from an injunction issued by Judge Clure Morton against the State of Tennessee forbidding the state from enforcing Tennessee Code Annotated § 67-2601(b). This statute had the effect of levying a state tax on the earnings from certificates of deposits issued by out-of-state financial institutions but owned by residents of the State of Tennessee. The statute provides as follows:
The word “bond” shall be held and construed to include all obligations issued by any person, firm, joint-stock company, business trust or corporation organized and doing business under the laws of this state, or any other state, evidenced by an instrument whereby the obligor is bound to pay interest to the obligee regardless of whether the obligor is doing business in this state, or whether the obligation under the terms of which the interest accrues is a mortgage or lien on property located in this state or beyond the jurisdiction thereof; provided that the word “bond” shall not include ordinary commercial paper, trade acceptance, etc., maturing in six (6) months or less from the date of issuance; provided further that the word “bond” shall not include certificates of deposits, issued by a bank, savings and loan association, or credit union chartered under the laws of this state or of the United States lawfully doing business under the laws of this state.
Tenn.Code Ann. § 67-2601(b) (Emphasis added).1
The disputed provision in this litigation concerns the proviso added by amendment in 1982 and emphasized above. 1982 Tenn. Pub. Acts (Adj.S.) ch. 652, § 1.
The plaintiffs in this case are three Virginia banks doing business in Bristol, Virginia just across the state line from Tennessee. They, of course, fear that the provision just referred to will damage their business with Tennessee customers. The banks are not threatened with paying the tax but equally clearly their Tennessee customers would be faced with doing so.
The fundamental law applicable to this case may be found in the Constitution of the United States. In the original Constitution under Article I, Section 8, we find: “The Congress shall have Power ... to regulate Commerce ... among the several States____” Further in the Fourteenth Amendment, the Constitution provides: “No State shall ... deny to any person within its jurisdiction the equal protection of the laws.”
The enactments referred to above respect the efforts of those who had experienced the turmoil of the war for independence and later the horrors of the Civil War to form one united nation. The United *110States Supreme Court reaffirmed the significance of the Commerce Clause and the Equal Protection Clause as limitations on the power of the States in the recent case of Metropolitan Life Insurance Co. v. Ward, — U.S. ---, 105 S.Ct. 1676, 84 L.Ed.2d 751 (1985):
Under Commerce Clause analysis, the State’s interest, if legitimate, is weighed against the burden the state law would impose on interstate commerce. In the equal protection context, however, if the State’s purpose is found to be legitimate, the state law stands as long as the burden it imposes is found to be rationally related to that purpose, a relationship that is not difficult to establish. See Western & Southern [Life Insurance Co. v. State Board of Equalization of California] 451 U.S. [648, 674, 101 S.Ct. 2070, 2086, 68 L.Ed.2d 514 (1981)] (if purpose is legitimate, equal protection challenge may not prevail so long as the question of rational relationship is “ ‘at least debatable’ ” (quoting United States v. Carolene Products Co., 304 U.S. 144, 154 [58 S.Ct. 778, 784, 82 L.Ed. 1234] (1938)).
The two constitutional provisions perform different functions in the analysis of the permissible scope of a State’s power — one protects interstate commerce, and the other protects persons from unconstitutional discrimination by the States. See Bethlehem Motors Corp. v. Flynt, 256 U.S. 421, 423-24 [41 S.Ct. 571, 572-73, 65 S.Ct. 1029] (1921). The effect of the statute at issue here is to place a discriminatory tax burden on foreign insurers who desire to do business within the State, thereby also incidentally placing a burden on interstate commerce. Equal protection restraints are applicable even though the effect of the discrimination in this case is similar to the type of burden with which the Commerce Clause also would be concerned. We reaffirmed the importance of the Equal Protection Clause in the insurance context in Western & Southern and see no reason now for reassessing that view.
In whatever light the State’s position is cast, acceptance of its contention that promotion of domestic industry is always a legitimate state purpose under equal protection analysis would eviscerate the Equal Protection Clause in this context. A State’s natural inclination frequently would be to prefer domestic business over foreign. If we accept the State’s view here, then any discriminatory tax would be valid if the State could show it reasonably was intended to benefit domestic business. A discriminatory tax would stand or fall depending primarily on how a State framed its purpose — as benefitting one group or as harming another. This is a distinction without a difference, and one that we rejected last term in an analogous context arising under the Commerce Clause. Bacchus Imports, Ltd. v. Dias, [— U.S. ---, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984) ]. See n. 6, supra. We hold that under the circumstances of this ease, promotion of domestic business by discriminating against nonresident competitors is not a legitimate state purpose.
105 S.Ct. at 1683-84 (footnotes omitted) (emphasis added).
We do not, of course, write in this case on an empty slate. The United States Supreme Court has interpreted these constitutional enactments in many cases by now. Here we rely primarily upon those decisions interpreting the Commerce Clause. The following we deem applicable to and controlling of our decision. Boston Stock Exchange v. State Tax Commission, 429 U.S. 318, 97 S.Ct. 599, 50 L.Ed.2d 514 (1977); Great Atlantic Tea Co. Inc. v. Cottrell, Health Officer of Mississippi, 424 U.S. 366, 96 S.Ct. 923, 47 L.Ed.2d 55 (1976); McLeod v. J.E. Dilworth Co., 322 U.S. 327, 330, 64 S.Ct. 1023, 1025, 88 L.Ed. 1304 (1944); and Freeman v. Hewit, 329 U.S. 249, 252, 67 S.Ct. 274, 276, 91 L.Ed. 265 (1946).
In the Boston Exchange case, the New York legislature had amended a state transfer tax statute applicable to securities transactions so that stock transactions in*111volving an out-of-state sale were more heavily taxed than most transactions involving a sale within the state. The obvious effect was to occasion New York State investors to use the stock exchange in New York. The Supreme Court, with Mr. Justice White writing, held that under the Commerce Clause, no state could “impose a tax which discriminates against interstate commerce by providing a direct commercial advantage to local business.” 429 U.S. at 329, 97 S.Ct. at 607.
On the basic issue of whether the Commerce Clause of the Constitution has been violated by this tax, we believe the Boston Stock Exchange case is dispositive.
Appellants argued below and argue here that the challenged tax passes constitutional muster when viewed in light of the Supreme Court’s statement in Colgate v. Harvey, 296 U.S. 404, 56 S.Ct. 252, 80 L.Ed. 299 (1935), that “a tax upon income is not an interference with interstate commerce simply because the income is derived from a source within another state; and, moreover, if there be any tendency to interfere with such commerce, it is purely collateral and incidental.” 296 U.S. at 419, n. 2, 56 S.Ct. at 254, n. 2. The District Court answered this contention by holding:
[W]e think the “collateral” or direct — indirect test applied in Colgate v. Harvey has been replaced with the more realistic inquiry of whether a law “substantially affects” interstate commerce. See, e.g., Commonwealth Edison Co. v. Montana, 453 U.S. 609, 614-16 [101 S.Ct. 2946, 2951-53, 69 L.Ed.2d 884] (1981); Boston Stock Exchange, [429 U.S. 318, 97 S.Ct. 599, 50 L.Ed.2d 514 (1977) ].
The decisions of the Supreme Court in many years since the Colgate v. Harvey decision confirm the correctness of the District Court’s holding. In a recent decision striking down a Louisiana tax on natural gas produced in the federal outer continental shelf and piped through Louisiana en route to other states, the Supreme Court stated:
A state tax must be assessed in light of its actual effect considered in conjunction with other provisions of the State’s tax scheme. “In each case it is our duty to determine whether the statute under attack, whatever its name may be, will in its practical operation work discrimination against interstate commerce.” Best & Co. v. Maxwell, 311 U.S. 454, 455-56 [61 S.Ct. 334, 335, 85 L.Ed. 275] (1940). See Halliburton Oil Well Cementing Co. v. Reily, 373 U.S. 64, 69 [83 S.Ct. 1201, 1203, 10 L.Ed.2d 202] (1963); Gregg Dyeing Co. v. Query, 286 U.S. 472, 478-80 [52 S.Ct. 631, 633-35, 76 L.Ed. 1232] (1932).
Maryland v. Louisiana, 451 U.S. 725, 756, 101 S.Ct. 2114, 2134, 68 L.Ed.2d 576 (1981). See also Bacchus Imports, Ltd. v. Dias, — U.S. ---, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984); Westinghouse Electric Corp. v. Tully, 466 U.S. 388, 104 S.Ct. 1856, 80 L.Ed.2d 388 (1984).
Appellants also seek to justify the challenged tax as a measure to compensate for Tennessee’s inability to apply to out-of-state banks the Tennessee tax laws and banking regulations under which Tennessee banks must operate. Yet the Commerce Clause places limits on a State’s power in this regard:
The common thread running through the cases upholding compensatory taxes is the equality of treatment between local and interstate commerce. See Boston Stock Exchange, 429 U.S., at 331-32 [97 S.Ct. at 607-608]; Henneford v. Silas Mason Co., 300 U.S. 577, 583-84 [57 S.Ct. 524, 527-28, 81 L.Ed. 814] (1937).
Maryland v. Louisiana, 451 U.S. at 759, 101 S.Ct. at 2135. We find no such equality of treatment in our instant case.
This does not, however, end our consideration of this case. Appellants strongly urge that the Tax Injunction Act of 1937, 28 U.S.C. § 1341 stands in the way of plaintiffs Virginia banks’ attack upon this Tennessee statute. The Act relied on reads as follows:
The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law *112where a plain, speedy and efficient remedy may be had in the courts of such state.
28 U.S.C. § 1341 (1982).
If this record showed “a plain, speedy and efficient remedy” in the courts of Tennessee, this, of course, would be a complete answer to the Virginia banks’ suit. This record, however, demonstrates clearly that the Virginia banks were aware of the terms and purposes of the Tax Injunction Act and sought relief thereunder. Their efforts to invoke the federal constitutional principles, which we have already discussed above, were frustrated when the Tennessee Supreme Court rejected their suit in Dominion National Bank v. Olsen, 651 S.W.2d 215 (Tenn.1983). The Tennessee Supreme Court held that only Tennessee taxpayers had standing to challenge Tennessee state taxes.
Under this circumstance, we do not see any “plain, speedy and efficient remedy” for out-of-state parties whose business is threatened by the tax here imposed.
Additionally, we find no difficulty in holding that the plaintiffs have suffered an injury in fact and that they were within the “zone of interest” regulated by the statute here under assault. See Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).
For this reason and others further explicated by Judge Morton, the judgment of the District Court is affirmed.
. The former Tenn.Code Ann. § 67-2601(b) has been recodified as Tenn.Code Ann. § 67-2-101(1) (1983).