Allen v. Pullman’s Palace Car Co., 191 U.S. 171 (1903)
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Allen v. Pullman’s Palace Car Company
No. 27
Argued October 16, 1903
Decided November 16, 1903
191 U.S. 171
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE MIDDLE DISTRICT OF TENNESSEE
Syllabus
A state may not impose a tax which is in any way a burden upon interstate commerce; but it may impose a privilege tax upon corporations engaged in interstate commerce for carrying on that part of their business which is wholly within the taxing state and which tax does not affect their interstate business or their right to carry it on in that state.
The provision of the tax law of the Tennessee of 1887 that sleeping car companies doing business in the state pay a certain sum per annum per car and which, by its terms, applies to cars running through the state as well as to those operated wholly within the state, is repugnant to the commerce clause of the federal Constitution. Pickard v. Pullman. Co., 117 U.S. 34.
The provision of the tax law of the State of Tennessee of 1889 that sleeping car companies pay a tax of $3,000 per annum in lieu of all other except ad valorem tax for one or more passengers taken up at one point within the state and delivered at another and transported wholly within the state, and which does not refer to or affect the interstate business of the companies, is not repugnant to the commerce clause of the federal Constitution. Osborne v. Florida, 164 U.S. 650.
Such tax will not be regarded as a disguised attempt to tax the privilege of engaging in interstate commerce if, under the laws of the taxing state, it is not compulsory for a corporation engaged in interstate commerce to carry on that part of its business which is wholly within that state. Pullman Co. v. Adams, 189 U.S. 420.
This is a writ of error to review the judgment of the Circuit Court for the Middle District of Tennessee in suits brought by the Pullman’s Palace Car Company to recover from the State of Tennessee moneys paid under protest for taxes levied and collected by virtue of certain laws of the state requiring the payment of sums for the years 1887 to 1893, inclusive. These statutes are set forth in the opinion. The cases were tried to the court without the intervention of a jury, and separate findings of fact and law were made. From the findings of fact, it appears that the Pullman Company, a sleeping car company, operated its cars in Tennessee under a contract with railroad companies traversing the state. These contracts required the Pullman Company to furnish the cars, keep the same in order, and to hire the porters and conductors. The railroad companies paid the Pullman Company for the privileges afforded, furnishing light, heat, and water for the cars, and repairing damages due to accident and casualty. The special finding of facts as to the manner of operation in transporting the cars of the Pullman Company sets forth:
During the years 1887 and 1888, the company operated sleeping cars, as follows: a car left Nashville and went to Memphis nightly, and on this car tickets were sold to passengers from Nashville to Memphis, and not beyond. This car remained in Memphis during the day, returning to Nashville the following night, and going no further. The next night, it went from Nashville by way of Chattanooga to Atlanta, Georgia. It remained in Atlanta during the day, and returned the next night from Atlanta to Memphis. On the trip from Memphis, tickets were sold from Nashville to Atlanta and to intermediate points in the State of Tennessee. On the nights, the cars left Nashville for Memphis and Atlanta for Nashville, a car left Memphis for Nashville and another left Nashville for Atlanta, selling tickets from Memphis to Nashville and intermediate points, and no further, and from Atlanta and intermediate points to Nashville and no further. The car from Memphis to Nashville went on the trip to Atlanta before making a return trip to Memphis, and the car making the trip from Atlanta to Nashville went on the trip the following night to Memphis before making a return trip to Atlanta. The same cars were not used continuously in this service, but were changed from time to time, there being four cars performing the service at all times.
During the year 1887, the East Tennessee, Virginia & Georgia Railroad Company ran two sleepers of its own, doing a business between Knoxville and Chattanooga, Tennessee. During the years 1889, 1890, 1891, 1892, and 1893, the company has operated sleeping cars between Nashville and Memphis and Atlanta and Nashville, as above set forth. From 1887, continuously, the Pullman Company has operated its cars on the lines of the Nashville, Chattanooga & St. Louis Railway, the Louisville & Nashville Railroad, East Tennessee, Virginia & Georgia Railroad, now the Southern Railway, the Newport News & Mississippi Valley Railroad, Illinois Central Railroad, and Cincinnati Southern Railroad, and all other railroads within the State of Tennessee whereon sleeping cars are used, and has taken up, carried, and put down passengers within the state.
In 1887, sleeping cars were operated during a portion of the year between Nashville and Memphis, and did not pass beyond the limits of the state. It was agreed that, without either party’s waiving any rights, the plaintiff’s claim would be abated $1,234.
The gross receipts of the plaintiff per year from lines running into the State of Tennessee was about $500,000. The gross receipts per year from passengers carried locally in Tennessee was about $25,000.
The cars actually used on all these lines during each year would number over one hundred.