In 1880 these companies were subject to an ad valorem tax of one-half of one per cent upon the value of their property in the state. In 1881 it was provided that "from every person, firm or association of persons owning or running any palace, sleeping, or dining-room cars not owned by the railway company, on any railroad in this state, there shall be collected an annual tax of $2 per mile for each and every mile of any and all railroads in this state over which such cars may run." This tax was to be in lieu of all other taxes, and could not be employed by any county or municipality. Upon being tested in the courts, it was declared unconstitutional, because it did not apply to all persons owning and running such cars.2 In 1882 this defect in the law was cured and the tax was reduced to 50 cents. The tax was paid by the Pullman Company, up to August 31, 1884, but from then until August 31, 1886, none was paid and from 1886 to 1894 only $83 was paid annually and that by the H. & T. C. Railroad on one car between Austin and Houston. The companies declined to pay the tax on the ground that it was an interference with interstate commerce, and no action was taken by the state to test it. In 1893 a tax of 25 cents on each $100 of the capital stock of such companies employed within the state was enacted.3 The method of computing the state's share of the capital stock as laid down in the statute was that it should be "such proportion of the capital of such company, after deducting therefrom the amount shown to be invested in real estate, manufacturing plants, materials and properties, other than such sleeping, palace, or dining cars and their equipment or properties used in connection with the operation of such cars, as the miles over which it runs its cars in this state bear to the whole number of miles in this state and other states over which such cars may run." This tax was in addition to other taxes in force, but no occupation tax could be levied upon such companies by any county, city, or town. Upon data furnished by the companies to the comptroller, the latter computes the tax. This tax has been paid regularly by the Pullman Company. In 1897 a tax of 10 cents for each 100 miles over which cars ran within the state was enacted to replace the one of 50 cents per mile, but two weeks after enactment it was repealed and succeeded by a tax of 2 1/2% on the gross receipts from passenger travel originating and ending within the state. This tax was payable quarterly to the state treasurer. This gross receipts tax was in addition to the one of 25 cents on the capital stock. It was denied to a county, city, or town to levy an occupation tax upon a company doing this business.1 In 1905 the rate was raised to 4% on gross receipts, except those from buffet service, and in 1907 to 5%. In 1910 the proceeds of the gross receipts tax were $33,845; those of the capital stock tax, $2,908. In 1915 the proceeds were, respectively, $39,628 and $5,157.

1 Rev. Civil Stats., 1911, art. 7403.

2 The Pullman P. C. Co. v. State of Texas, 64 Tex., 274 (1885).

3 Laws of 1893, p. 156. Rev. Civil Stats., 1911, art. 7375.