Page:Harvard Law Review Volume 32.djvu/428

392 different question would have been presented had the gross-receipts tax been the only effort to draw sustenance from the "intangible property," even though all tangible property was subjected to ad valorem assessments.

Henderson Bridge Co. v. Kentucky, decided in 1897, appears to be a case in which a tax on the "intangible property" of an inter-state bridge company was assessed by capitalizing the gross receipts and then deducting the value of the tangible property. The majority did not notice the fact that, gross, rather than net, receipts were used. Chief Justice Fuller contented himself with saying that the authorities cited in the Ohio Express cases sanctioned the method of taxation prescribed by the Kentucky statute, and that the tax was not on the interstate business carried on over the bridge, because the company did not carry on that business but merely received tolls from its lessee, thus bringing the case within Erie Railroad v. Pennsylvania.

The Erie case seemed to go on the ground that tolls received for rental were not receipts from interstate commerce although the lessee paying the tolls was engaged in interstate commerce, thus treating rent from a leased railroad like rent from a leased office building. The statute, as paraphrased in the opinion of Mr. Justice Shiras, imposed "a tax of eight- tenths of one per centum upon the gross receipts of said company for tolls and transportation." No reference is made in the statement of facts or in the opinion to any other features of the state taxing system. Mr. Justice Shiras recognizes that receipts from interstate commerce cannot be taxed directly, but says that "the tax complained of is not laid on the transportation of the subjects of interstate commerce, or on the receipts derived therefrom, or on the occupation or business of carrying it on." The only hint that the tax was one in lieu of a property tax is contained in the succeeding sentence which says: "It is a tax upon the corporation on account of its property in a railroad, and which tax is measured by a reference to the tolls received."

In the Galveston case Mr. Justice Holmes refers to this passage