INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 391 of a percentage of gross-receipts, or whether it is sufficient that the gross-receipts tax is not a drain on any economic interest that is making other contributions to the state treasury, i.e., whether a gross receipts tax in default of other taxes is as good as one in Heu of them.^^ Another question that presents itself is whether a gross-receipts tax must be in Heu of all taxation on tangible property or some part thereof, or whether it is saved from sin if the valuation of the tangible property does not include its value as part of a "going concern," that is, does not include the contribution of the business in which the property is employed. The Galveston case does not answer this question. In the Maine case the road-bed and rolling stock contributed nothing to the state except the excise on gross receipts. In the Galveston case, no property of the road went imassessed because of the gross-receipts tax. But it was not be- cause no property went unassessed that Mr. Justice Holmes distin- guished the Texas tax from that of Maine. It was because " another tax on the property of the railroad is upon a valuation of that property, taken as a going concern." ^^ The value of the business had already been reached by the subjection of the company's franchise to an ad valorem tax as property. This value of the busi- ness is what the Supreme Court calls the "intangible property." Texas took toll from this intangible property by a tax on the valua- tion of the franchise and by the gross-receipts tax as well. Plainly a ^* See pages 414-16, infra. ™ 210 U. S. 217, 228, 28 Sup. Ct. Rep. 638 (1908). Italics are writer's. In the opinion, this passage is not preceded by "because," but by the statement: "On the contrary, we rather infer from the judgment of the state court and from the argimient on behalf of the state that," etc. In the opinion of the state court, Judge Brown, in distinguishing some earlier Texas decisions, said: "The fact that the franchise is sub- jected in this state to an ad valorem tax as property does not miHtate against the right to tax the persons or the corporations using that property as an occupation any more than would the taxing of the physical property of the railroads, as the tracks, right of ways, cars, etc., operate to prevent the imposition of occupation taxes for the use of them as instruments of transportation. There is nothing in the case cited which in- timates a prohibition against levying an occupation tax upon the company which may use the franchises taxed as property. As well might it be held that an ad valorem tax upon a storehouse, fixtures, and goods would preclude an occupation tax upon the mer- chant for pursuing the business of selling goods." State v. Galveston, H. & S. A. Ry. Co., 100 Texas, 153, 172,97 S. W. 71 (1906). The Texas court sustained the tax on the authority of the Maine case and of the Home Insurance case on which the Maine case had been based. The later legislation and judicial decision in Texas are referred to in 31 Haev. L. Rev. 762, note 156.
