U.Colo.L.Rev. 849(1986).

LIBRARYREFERENCES
Taxationk216. C.J.S. TaxationSec.257.

ANNOTATIONS NOTES OF DECISIONS I. II. GENERALLY I to 40 OBLIGATIONS OR PROPERTY EXEMPT FROM TAXATION 41 tO 59

I. GENERALLY < SubdivisionIndex > Generally 6 Computationof tax Computationof tax - Generally13 Computationof tax - Deductions14 2 Constitutionality Constructionwith other laws 6a Deductions, computationof tax 14 Estoppel16 Franchise taxesfrom which obligationsexempt9 Gift taxesfrom which obligationsexempt 10 Historical 1 Incometaxesfrom which obligationsexempt 1l l5 Jurisdiction Nonproperty taxes from which obligations exempt 12 Nonresident aliens7 Particular taxes from which obligations exempt Particular taxes from which obligations exempt - Generally 8 Particulartaxesfrom which obligationsexempt- Franchise taxes9 Particulartaxesfrom which obligationsexempt Gift taxes 10 Particulartaxesfrom which obligationsexempt- Incometaxes l1 Particulartaxesfrom which obligationsexempt- Nonpropertytaxes 12 Power of Congress 5 3 Purpose Retroactiveeffect 4 1. Historical Revenuestatuteproviding for exemption from stateor local taxation of obligations of United

States, as amended in 1959,provided exemptionno broaderin scopethan that which Constitution requiresfor tax exemption for governmentobligations. First Nat. Bank of Atlanta v. Bartow County Bd. of Tax Assessors, U.S.Ga.1985, 105S.Ct.1516,470 U.S. 593,g4 L.8d.2d535. From the time when McCulloch v. Marvland, 1819.4 Wheat. 316,4 L.Ed. 579.was decided.an unbroken line of cases adopting the principles of that decision.has established the inherent nontaxability by the statesof propertv held bv the United States.and of bonds and obligationsissuedby the United Statesand held bv individuals or corporations.exceptbv permission of the United States. State v. Mavor of City of Newark" N.J.Err. & App.l899. 44 A. 654.63N.J.L. 547.

UNITED STATESCODE ANNOTATED TITLE 12. BANKS AND BANKING CHAPTER 3-.FEDERAL RBSERVESYSTEM

:l IkNOTE * * ?k ?k ?k

* * *NOTE

t<tr ?k ?k * rr *

OBLIGATIONS ARE NON.TAXABLE BY THE STATESOR POLITICAL

SUBCHAPTER XII--FEDERAL RESERVE NOTES SUB-DIVISIONS OF THE STATES Current through P.L. 104-98,approved 1-16-96 SEE TITLE 31. Section# 742 Sec.4l 1. Issuance to reservebanks; natureof obligation; redemption Federal reserve notes, to be issuedat the discretionof the Board of Governorsof the Federal ReserveSystemfor the purposeof making advances to Federalreservebanksthrough the Federal agents reserve as hereinafterset forth and for no other purpose, are authorized. The said notes shall be obligationsof the United Statesand shall be receivablebv all national and member banks and in Federal reservebanks and for all taxes.customs.and other public dues. They shallbe redeemed lawful money on demandat the TreasuryDepartment in the city of Washington, of the United States, Districtof Columbia, or at any Federal Reserve bank. [[[A DARN LIE IN FACT!!!lll

2. Constitutionality Where economic but not legal incidence of tax falls on federal government,such tax generally doesnot violate constitutional immunity if it doesnot discriminate againstholders of federal property or thosewith whom federalgovernmentdeals. Memphis Bank & Trust Co. v. Galner, U.S.Tenn.1983, 103S.Ct.692, 459U.S. 392,74L.Ed.2d562. Determination that statewas not prohibited by federal statutory exemption from taxing dividend to incomederivedfrom repurchase agreements did not resolvechallenge involving federalsecurities ground that tax violated intergovemmentaltax immunity doctrine of the supremacy tax on separate clauseof the United StatesConstitution.as scopeof statutoryexemptionwas not necessarily the same as scopeof intergovernmental Tax Bd.. Cal.1995.886 tax immunit)' doctrine. Bewle)'v. Franchise P.2d 1292.37Cal.Rptr.2d298.9Cal.4th526. ' Congresscannot withdraw from statetaxation securitiesissuedby the United Statesalready in former Sec.742 of subjectto suchtaxation,and Act Feb. 25, 1862,c. 33, 12 Stat.346, incorporated previouslyissued,was extra this title, so far as it exemptedfrom statetaxationUnited Statessecurities void. Peoplev. City and County of New York Com'rsof Taxesand Assessments, constitutionally

nondiscriminatory was to protectfederalobligationsagainstdiscriminatorystatetaxation when federal corporations. 3 9 .Ed. Co.Bank v.S. N Y. 1989. 'ederal ment obli h i n whi revent ical subdiv from issued bY United States oblisations ilishtest desree market value or investment attractivenessof eb.Ga.J.u.of Taxation Former Sec. v.Title Ins. Or.94L. w.1950. 7 7L .Barb. Sec.inter alia.338 U.or both. 2 d 1 0 7 2 .1944.except.5154] of this title were clarifications of congressionalintent to immunize from statetaxation only the interest bearing functions credit to carry on the necessary to secure obligationsof the United Stateswhich were needed judiciary' by the or modified in any degree which intent shouldnot have beenexpanded of government.Tex. E d . obligationswere offeredfor salein competitionwith statesecurities. Douglasv.N.. 3 3 2 . 1 2 5 0 .Stat.Ed. 0 8O r .exceptthoseexceptionsspecifiedin of Revenue. E d . Division of Tax Appealsin in an effort to secure 70 S.Stateex rel. C t .ct. S .425 [now Sec.D a v i s . of N. S .1862.413. 665. r e h e a r id s.3701 [now this sectionlprovidingthat all amended stocks. S U.37 3.American Bank and Trust Co. andFinance Dept.Stateof Or.2d566.in an effort to secureand protect soughtto preventthe slightestdiminution of market value or investmentattractiveness credit. 8 9L .Pacific First FederalSav.216 Neb. be considered.1984.635. Department 10333 .1983.bonds.6 5.2d 1993 ffort to securen ct. Congress directly or indirectly by the value of federalobligations. Karnes.on remand679 S. c t . U.2d231.557 her L.1 0 7 .Bd.742of this title which generallyexemptedinterestbearingobligationsof the to preventtaxeswhich diminishedin the from stateand local taxationwas enacted United States of obligationsissuedby the United States the market value or investmentattractiveness slightestdegree necessary credit.J. Retroactiveeffect .742of this title and former Sec. Federalpublic debt statuteis intendedto invalidate all stateand local taxes measureddirectly or indirectlyby vaiue of federalobligationsor any interestthereon.439.1 5 7 . 8 5 5 .W. ne gn i e d U . Purpose When Congress former Rev.exceptthose invalidateall taxesmeasured taxesspecifiedin amendment.179 P. U . Consression purposeof enactingthis sectionexemptinginterestfrom federalobligationsfrom Congressional franchisetaxesimposedon most forms of stateor local taxation. 1215..Ct. 3 2 3 S m i t h v .127 130L. intendedto sweepaway formal distinctionsand to directly or indirectly in computationof tax.3369.463 1457.S. S . 1 1 1 . 4.treasurynotesand other obligationsof the United Statesshall be exemptfrom taxation by or under stateor municipal or local authority to add sentencestating that exemption extendsto every form of taxationthat would requirethat eitherobligationsor interestthereon.Ed.2d470.S. Former Sec. of federalobligations.W. 4 6 3U .2d 1 0 4s . New JerseyRealty.103 77L.2d Statute.Congress 346 N. 750' Neb. v. Dallas County.s.

C axes { MORE LIES} Un son Ja fs fact to be ofi shouldbe ivelv.ffi?y be limited by ctarging obligations U'S'Ga'1985' Bd' of Tax Assessors' or burdens. ilrriNut. t-lfv a eld Yo v. 4 7 0 the national governmentwithin the The principle of exemption is that the statescannot control cannottax its obligationsfor payment sphereof its constitutionalpowers--forthereit is supreme--and implies the suchtaxation necessarily within that rangeof powers. N .because of moneyissuedfor purposes gaok.1 1 2 . 1 9 8 5 .which of the taxes did not accrueuntil they puia tn. Bank of Atlanta v.CO did n v. 7 W a l L 1 6 ' the United Statesgovernmentby taxing states may not encroachupon the borrowing power of Mont'1978' 580 P'2d 909' Dept. of Revenue. 103 SUPREME paid to statedid not involve -statesexcisetaxesdue and Permittingbanksto recover 1982corporate when SupremeCourt. Bartow County expenses 535. S . c t . 1 6 . S .1986 .O 24 I 98 ls10n date o vel irst BANK AND TRUST vs' STATE OF VrnmpnSIS O k la . 2 d 1 0 5s .2d580. instead. taxes under protest.8 4 L .479 Tenn. E d .W.N'J'Sup'1862'30 state.. 7 4U . CODE Section TENNESSEE h ons was fede COURTat. GenerallY by constitution is not a total Tax exemption for governmentobligations that is required and iheir interest fair shareof related exclusion. 1 9 L ' E d ' 5 1 .Ct' 1336. of discriminatory assessment Court' Miatand Bank & Trust Co' v' Olsen' to ruling of United StatesSupreme banksdid subsequent U'S' 1 103'94L'Ed'2d 186' denied107S. Montana 1 7 7M o n t .certiorari 5. . 16 88 . i tio f the v. v. in that taxes were not due retroactiveapplication of decision of United and actionby banksto contestconstitutionality decisionof United StatesSupremecourt was rendered. which totally upheld 31 U. federalobligations. Mayor and Controller of City of New York' assedionof the righito exercisesuchcontrotl U .Newarkcity gank v. Y .5 8 3 . 1 5 1 6 .S. U . B U T S E E # 742 by U'S' et al GARNER. Assessor 6.2 9 d1 0 2 6 . Montana BankersAss'n v.717 S.S. S . 7P 0 . but. Powerof Congress united Statesshall not be taxableby a congresshas power to declarethat bondsissuedby the N'J'L' 13' of Fourthward of city of Newark.

owned certain domestic stocks and bonds which shehad convertedinto United StatesTreasurynotes under a preanangedprogram or understandingand solely for the purposeof making a gift of suchnotesin trust.Y.Supp.I94l. Commissionerof IntemalRevenue.Ohio 1955. Commonwealth. suchconversionwas ineffectualto avoid gift tax under former Sec.Ed.2d464. 7.607. R.3124. 81 refer to interestbearinginstrumentssuchas United bonds. I.152 Va.750 of this title which exemptedUnited Statessecurities beneficiallyowned by suchaliensfrom "taxation". the term was not restrictedto propertytaxes. Ya. D. Ohio v. Provenza States v.O.296.A.is distinguishable for tax purposes from meaning of 31 U. afftmed 185 F.Art. a nonresidentalien.and physically locatedwithin United States.Sec.2(N. Where taxpayer.750 of this title which exempted beneficially United Statessecurities ownedby suchaliensfrom taxation.A. .Jeffress v. Particulartaxesfrom which obligationsexempt--Generally Principle that obligations of federal governmentare immune from statetaxation embraces indirecttaxationof suchobligationsthroughtheir inclusionin tax imposedon all propertyof a taxpayer. shouldhavebeenexcludedfrom taxablegrossestateofnonresidentalien.56 O.as Sec.which provides that stocksand obligations of the United States govemmentare exemptfrom taxation by stateor political subdivisionof state. . for federalestatetax pu{poses.75S. l.U. Tax Ct. Comptrollerof Treasury.A.6A.1985.2d 831. 1.C. 563.and Code 1957. under former Sec. Sec.) 1948. for Savings Society in City of Cleveland.64 Md. United States bondsissuedafter Mar. C. Constructionwith other laws Definition of FederalReservenotesas "obligationsof the United States"within contextof 12 U.. 143. and which were physicallylocatedin United States.411 is containedwithin title which created the FederalReserveSystemand Sec. which were owned by nonresident alien individual who did no business in United States. 23J. Md.S. and it is quite immaterialthat statetax doesnot discriminateagainstthe federalobligations. affirmed 168F . C.E.Pa.2d 125. 3124 andArt. 325.2501 et seq. Nonresident aliens United States bondsissuedafter as well as beforeMar. 99 L.App.7929.C.9l Co for Banking & Trusts v.750 of this title. 349 U. within the gift tax exemptionprovisionsof former Sec.S.S.Sec.of Title 26 [now Sec. 100.365. l94l. F.1000et seq. 8.280(c)(1).146S.2d 975.App.Ct.411. U S. JandorfsEstatev. shouldhave beenexcludedfrom taxablegrossestateof nonresident alien not doing business in United States. 81.9 Liberty Bonds were taxableby the Commonwealth of Virginia while held by the executorof a nonresident alientestator. De Goldschmidt-Rothschild v.950. which governsissuance of suchnotes.71OhioLaw Abs.171F.which providesthat interestor dividendson obligationsof the United Statesshall be subtracted from federaladjustedgrossincome. 280.of Title 26]. Bowers.7947 T. underformer Sec.S.C.497A. Pennsylvania 1950.C.

1 8 L . stock.76S. 6 2 7 . 1 6 1N e b .350[J-5.1987 U . other surplus outstanding and debtsowed to reserves.also. First AmericanNat.PeterKiewit Sons'Co. 897.Y. C t . v.9 2 8 .Provident Conn. part of which were investedin securities deposits.Pa.. 9 3 . Pa. which is definedas sum of corporation's by corporation's franchisetax measured capital stock.2d 415.9 4 L .S.. 534. Com.Obligationsof federalgovernmentcannotbe taxed.N.Co.69A." and a number forms of taxation can be imposed within that exception.certiorari extentwasunconstitutional. S .742aof this title did not renderthe discrimination the statebut resultedfrom the passage by of a statutecould not have beendetermined sincethe constitutionality any the lessunconstitutional. 6 W a l l .S. .6 1 1 . municipalor local authorities.1867.S.Co.1 0 0 1 .742of this title did not exemptsavingssocieties of the United States. taxes 9. Monroe County Sav' Bank v.Tenn. v. Co.Franchise N. Mass.eitherdirectly or indirectly.W. 632.Ct. U. E d . l. 6 . DouglasCounty.100L. 3 3 9U .2d 4iO. 4 l T .Mass the United States. Stateof Massachusetts. Taxation.1956. accounts. 5. 3420aet seq. 54:104-1 et seq.Ct.W.72P.CurtisPub. a p p e ad l i s m i s s e1 d 0 8S .zd4I0.69 of the motivesbehindits enactment.W a l l .742aof this title madeliable to federalincome tax interestand gainson obligationsof United Statesissuedafter Mar. B d .earnedsurplusand undivided profits. 2 d 6 9 1 . See.becamediscriminatoryagainstsecurities Com. from a franchisetax on accountof Former Sec.Ig4l. J. U.S. 3420aet seq. not including depreciation which will accrueto shareholders.6 3 2 . 594. statutedoes not limit the stateto of acceptable .J Dept. Olsen. a consideration .1868 Whereformer Sec.Ed.73U. 492.4(d).. which imposedon eachdomesticcorporationan annual issuedand net worth. 70 S.1 4 6 0 . 1867 Rochester. Societyfor Savingsv. 904.was not intendedby That discriminationagainstfederalsecurities of former Sec. by state.9 0 7 .Hamilton Co. Institutionfor Savings 6 Wall.of Treasury.l949. Use of the indefinite articles "a" and "an" in federal statuteproviding that exemption from local in taxationof the United Statesobligationsdoesnot precludethe obligationsfrom being considered computing a nondiscriminatory franchisetax or an estateor inheritancetax means "an!. 4 8 5 S.v. Coite. 72 N.paid-in or capital surplus.J.742of this title could not have beenevadedby any mere changeof form or name in the law by which the tax was imposed.1949. WernerMach. as result of which the statefranchisetax on by reasonof the adoptionof the federalincometax returnsas basisof such statefranchise corporations tax included federal securitiesand excluded statesecuritiesin determining amount of such franchise of the United Statesand to that tax.Neb. v.v. ---. CurtisPub. Massachusetts.299.S. 1 3 4 9 .363Pa.S. Sec. v.1868. 9 9 L .7 5l the impositionof one suchtax. Director of Division of exemptfederalbondsin the determination .Ed.18L. 18 L.1955.Ed' 634' Stateof N.is valid despitethe inclusion of tax owning 10 percentor more of corporation's shareholders of net worth. Bank of Knoxville v. A. denied ' by 72 P. 365.2d The exemptionprovided by former Sec. Sec.37 N. 8 d ..A. A statestatuteimposed a franchisetax on corporationslawful so far as it affected securitiesof . S .

2d 394.1982.Ed.54l of Revenue.339U.475 U. v. Stateex rel.A.299.79N.rehearing denied555 N.2d243.S.2d275.5I Ohio St.Y. Douglasv.2d tax proscribed by subsec. securities 56 O. imposed 290.66N. 1109.627.is a "franchisetax" within meaningof the federalpublic debt statutewhich exemptsUnited StatesGovernmentobligationsand interestthereonfrom stateor municipal taxation "exceptnondiscriminatory franchiseor other nonproperty tax in lieu thereofimposedon corporations. Bowers. Limbach. Department of Financeof City of New York.247.3d163. The New York City financial corporation tax.750. Excisetax imposedon grossinvestmentincomeof domesticinsurance is companies franchisetax or anothernonproperty "nondiscriminatory tax" and.Ct.08.2d9l5.S. RaymondBag Co. certrorari denied113 S.Ed.363Pa.1992.S.Y. 231.2d 144.S. cl. statutedoesnot imposelimited incometax.Y. Karnes.0et seq.2d624. Ins.W.126N. .163 Ohio St.2d 251.A. 100L. but rathersetsout workable measure supremacy of value of privilege of doing business in State. Commissioner Mass.S.certiorari denied106S.E. t457. and290. Sec. 870.O.3d710.].50 Ohio St.648.89L. N.583N. 866.Supp. discriminatoryfranchise (a) of this section."BankersTrust New York Corp.506 U.N. 593N.and thereforeviolated supremacy United States clause[U.thus.1523.S.487 N.A. N.S. v.Ohio 1955.E.Ct. Sec. Bank One Dayton.S.1517.C. 6.742 of this title which exemptedfederal from taxation.Y.Ct.Y. v.496N.405Mass.2d 457.2d 647.2d821. v.Ct.202.E.2d763. R. underM.350 U.E. certiorari denied110S.94L.08.2l. 1003. I2I L. and 103 of Title 26 resultedin a franchisetax with a basethat excludedinterestfrom stateand local obligationsbut includedintereston federalobligationsresultedin an invalid.Y.Ct. appeal dismissed 76 S.A. Ohio corporatefranchisetax is a true franchisetax for purposes of federallaw baning taxation of obligationsof United Statesgovernmentexceptin a nondiscriminatory franchisetax.certiorari denied 70 S. Federalsecuritiesowned by corporation for profit were properly included in franchisetax base in determining franchisetaxes notwithstanding former Sec.S.1984.Ct. 76 S.108L. 928.Ed.rehearing denied 777. Department of Finance of City of New York.216 Corporate franchise subd.S. Code Sec.C. Co. imposition of tax on income from federal bonds and other federal obligations doesnot conflict with federal statuteor violate clause. Inc.city tax discriminatedagainstfederalobligationswithin meaningof federal statute[31 U. Neb.0 2.3 l24f permittingonly nondiscriminatory franchisetaxesto be levied on obligations.E. 77-2734(2)in tax which in light of sections statecorporate franchise 63.553 N.Ohio 1990. Forbes. Secs. N.and tax is imposedon interestpaid on stateobligationsas federal well as on obligations. utilized net incomeas a measuringstick for determiningthe value of exercisingthe corporatefranchise and which permittedthe inclusion of interestincomeon United Statesgovernmentobligationsin .352.S. 275.351U.R46-3.928.S.Neb. which tax. ' By renderinginvestments in obligationsof federalgovernmentlessattractivethan other in calculationof taxesdue underNew York City's generalcorporationtax fAdministrative investments.Ed.494 U.E.2d566.2d 321. Const.Liberty Mut. v.Ed.346N. which is imposed on financial corporationsfor privilege of doing business in the city in a corporate or organized capacity.1349. 61.1985.1989.Art.Ed. 1055.100L.

appeal of Taxation.2d422.---.226N.Gift taxes Tax Court's finding that conversion of domestic stocks and bonds into United StatesTreasury by the evidenceand noteswas solely for the purposeof making tax exemptgifts in trust was sustained of v. 2 d 118.742of this title which forbadethe states nondiscriminatory considerintereston suchobligationsin the computationof any tax other than a franchisetax or other nonpropertytax imposedin lieu thereof. CenterreBank of Crane fell outsideprohibition againsttaxing federalobligationsor interests Mo.eventhough tax is largelymeasured 779 P. Inc'. 886.S. 4 6L .226 Cheme. I24. 365.S.46 L.affrrmed legislature. the amountsof the taxes.2d 611. Commissioner 96 S.N. v.as amended The taxesupon corporations. aretaxesupon franchises. 367. Commissioner U . Burlington Northern.1989. the tax is not an income or property tax but is.Bank v.2d118..2d754. ReubenL. HomeIns. Or.37N. 124.S. 10.1385. in computingtax. a "franchise N. Monroe County Sav. Commissioner holding that the gifts were not tax exemptwas proper. Schwindenv.2d 1033.to computationof that net income did not violate former Sec.Co.Y. 500.181. 691 P.doesnot invalidatethe law and suchtaxation is within the authorityof the 8 S.Inc. corporate 96 dismissed of Taxation.I l9 U.Y. appeal Inc.A.02usesnet incomeas measuringstick for determiningvalue of the corporatefranchiseand permitsthe inclusionof interestincome on United States exercising governmentobligations in computation of that income.and the fact that dividends.744 5. of Revenue. Sav. interestincomefrom federalobligationsis included. ReubenL. Rochester.1883. c.ct. of the United Stateswhich are exemptfrom taxation. v. Director by Laws imposedunderLaws N. of Revenue. and thus doesnot violate this MCA 15-31-101is a nondiscriminatory that.Ct.Y.as sectionnotwithstanding it doesnot discriminateagainstholdersof federalobligationsbut.1975.1880. 1881.Ct. Bank tax imposed "for privilege of exercising its corporatefranchise within the stateaccording to and measuredby its net income for the precedingyear" was nondiscriminatory franchisetax which thereon.328.1975. E d .Bank v' City of securities 1867. rather.Ed.92N. L.. Department Federal franchisetax. Andersonin fact.2d corporate 1351. Anderson-Cherne. Mont.2d 611. Sec.W. tax" imposedupon the privilege of operatinga corporation.181.8 8 6 .423 Even though M.Minn.furnish the basisfor computing which are derivedfrom United Statessecurities.224 Mont.Minn. Pacific First by corporation's on federalobligations. 332. 382. 303 Minn.350. 303 Minn. Stateof Or.Y.W.423U. S . 129.213Mont. De Goldschmidt-Rothschild . dismissed for privilege of carryingon or doing business annuallyon corporations Stateexcisetax assessed tax." and thus within exceptionto federalstatuteinvalidating stateand local taxes in stateis "franchise net income.290.30 People v.Ed. s. opinionclarified730P. 542.1988. and privilegesgranteda Wherea tax is declaredin terms to be imposedon the franchises the corporationmay have seenfit to invest its moneysin bondsor it is not void because corporation.taxesinterestearnedby holdersof stateobligations. exemptfrom taxation.1984.W. portion of a not upon property.c. v.308 Or.

certiorari L. power "to in the executionof its expresslydelegated .168 F.. CaI. Mont. but not on stateobligations.First AmericanNat. 298. 523.2d 134. U.Ed. July 1. BurlingtonNorthern.75 1.605A. 541.Int. tax.A. Doneskiv.entitled "An act for the taxationof incomes.1872. .C.9 Bush.1336.224 Mont. denied610A.Ct. io. public debt. L.Incometaxes Maryland tax schemethat taxes only gains on federal obligations.1995. was impermissibly discriminatory becauseit made federal obligations less attractive than similar state obligations thus violating purpose of statuteto prohibit statefrom imposing any burden on any part of Md.ll7 S. 382.l22L. In re ThomasC.s.thosedeductionsare decreased incorne earnedby the corporation. the effect of which is to add back to taxable income interest income as from federalobligation.91 Md. in so Act N. Bank of Kentucky v.37Cal. prr. u..479 Tenn. Rev.2d 186.H. .94 Act 1867. Bewleyv. c t . usedby the government borrow money on the credit of the United States".72 Ky ' 46.r. 1984.1gg7. v.S.App. 1r03. 500.poseof determiningstatecorporationlicensetax.rxed to state's "piggybacking"taxation scheme applicable Vt.. in direct contravention directly or indirectly in the computationof tax' therefromare exemptfrom taxationby states v.1986 MidlandBank& TrustCo. 546A. 11. Olsen.u.2d 649."is unconstitutional. Bank of Knoxville v.691P.App. Olsen.C.certiorari 614. is a tax upon the . a p p e a Corporateexcise taxes imposed on banks and attributableto inclusion in banks'net earningsof discriminatedagainstFederal unconstitutionally interestearnedon obligationsof the United States inet stateand local obligations.213 Mont. Franchise involvingfederalsecurities.2d 1292.Rptr. Commonwealth.9 Cal.certiorari was Federalprohibition againststatetaxationof obligationsof United Statesgovernment of percentage which computedstatetax as f.Ed. 2 d 4 I 7 . taxpayercomputesallowabledeductions MCA 15-31-116 which providesthat when corporate by a ratio of federalinterestincometo all interest from grossincome.4th526.2d 784. earnings"did not includeintereston Tennessee obligationswherethe denied107 S.Inc. is unconstitutional interest and (a) of this sectionunderwhich both federalobligations to subsec.Ed.2d 975.allowing u tu* of 5 percenton the grossannualincome from interestpaid on bonds sincesuchtax to the Constitutionof the United States.W.2d422.1992. 46.1001. Comptroller of Treasury.2d796.99 dli s m i s s e 1 d 0 8s .2d I35I. federal Federalstatutory exemption from statetaxation of stocksand obligations of the United States Governmentdid not prohibit statefrom taxing dividend income derived from repurchaseagreements 886 P.2d69l. W .Ct. SawyerEstate..2d580.981. 1 4 6 0 . 2 1948. 4 8 5 S Tenn.2d Tax Bd. national denied113 S.n.1987. I49 Vt. of federalstatuteprecludingimposition Corporateexcisetax is not an incometax for purposes of incometax on obligationsof the United States. 1865. was repugnant issuedby the federalgovernment. ---.327Md. opinionclarified Schwinden 730 P.

2d Asexceptiontogeneralruleofimmunityoffederalgovernmentobligationsfromproperty thoughtax is *:iolders. corporate the on revied tax a as sustained been have 70 S'Ct'413'338 of N'l'' U'S'NJ'1950' Financ" in Dept.sec.S.of all moneys.w.2 751 Tenn.1919. l43.appeal d S.2dI0J2.53 N'H' 634' United states.securitiesof the derived from notes.s either mustbe considered' obligations of its form if federal thattax is banedregardless providing method iotit"la wasusualandcustomary .of 'ftt o' nationalbanks tax may be levied taxationby states. u.r"orproperty in N.of Taxationand of Tax Appeals Division 9 4 L . claimsto be andunpaid reserve to require construed as craims unpaid and reserve required of in excess wasinvalid' Stateof assets that value g"**l-tt"-'^b:1d'.Ct.zd69r.Rev.rrorJiy intangible against assessment ^ittun generally formersec' 1a20f this title which with conflict in as invalid was liabilities.J.Computation 7420f thistitle [nowthis section] formersection Ann..s.St.4 3 9 ' u. monthlyaverage.ggr. J.7lbhio LawAbs'280'.io.civ.19g7. arr. directlyor "aituf anAfrust Co' v' DallasCounty'U'S'Tex'1983' BanL tax.St.whichrequiredthetaxpayertoreturnt'oth eassessolastatemen the same'within the preceding controlled or held he time the for or value.whichrequired Rev."rtuJr states united or other greenbacks .bonds' and other far as it provides for the taxation of incomes 1873. American to calculate in Texas employed 1250'77 104s'ct' 39'463IJ'S' denied U. U.". tg55. Bd . other or credits year. olsen. v. 349 607.2T3T. Knoxville L.S. 54:4-22imposing ii-pt"""t o1lnit1 stockandsurplus f1t ti.Ed.A. 665.NonProPertY obligations purposesof federal statutepermitting corporate excisetax is a nonpropertytax for of Bank Nat' for certainstatetaxes. which assets corporate by measured in city of cleveland'ohio v' Bowers' for Savings is required..6386.t.S. ex Missouri "'?"h"tt' .if".ohio.b^"uts to total by proportion reduced 313'74L'Ed'870' "f S'Ct'326'281U'S' SO U'S'Mo'1930' Co' Ins' Missouri rel.Ohio Ataximposedonadomesticstockinsurancecorporationandleviedintheamountofl5 without entirenet worth computed capitalandsurpluslessliabilitiesor against against percent under thereon. but not securities' in government invested time that within .75s.Tl66violated vernon.71L.S.rity wh"r. to paytax on ulu: 9f assets companies insurance Sec.st. of tax by "n"" federar andthoughpayment obrigations i*trra.463 679S'W'2d566' 1457 . did not tax the citizenfor of-t"tn securities' purchase i*tt" created iniebtedness any bonflict deducting held duringthe year. tax computing in indirectly. of not excess from stateandrocaltaxation.Mo. interest uonasandaccrued states united exempt tax of amount principal of deduction but requiring property' of tax exempt exclusive a tax on uur. 855.andcould States united the of obligations bearing interest exempted Realty'Title Ins' co' v' New Jersey franchise. opitrio" of Justices. oi p. ---.andwasnot in h". First American of the united statesto be includedin ttre uase 108 S'Ct' 1460'485U'S' 1001'99 dismissed 4lT. the to money of roans for given States united taxes 12.Ed.rehearing 103s.il.. amount. of tax--Generally 13. onremand L. 3369.ct.q.Ed.Society agent ascollecting corporation 56 0'o' 365' 950.

not includingthe franchiseof suchbanksand to adoptthe value of the shares of the as the measure taxable valuation of such property without permitting any deductionsfrom such valuation on accountof bonds of the United Statesowned by its bank. Ga.37Cal. and multiplying the quotientby the numberof months of the year remainingafter deductingthe time the bondswere owned. 520Pa. Franchise 298.9 0 1 .5 0 3 .1915. 2 d 535. Shotwellv.and not to individual stockholders. BartowCountyBank v.2654.Continental Bank v. Bartow CountyBd.Sec. ---.Iowa 1907. Ariz.111Kan.Pa. 244.S.St. Sec.Rptr.5 1 L .1984.1989.767.R.E.21(E)(2)(Repealed).Ct. 1322. 553A. without subtractingvalue of federal securities ownedby bank.with formerSec. U.81L. dkectingthat the shares of stock of statebank shall be assessed suchbanks.contradicted prohibiting imposition of federalstatutes statetaxeson federalobligationsand violated supremacy v.which had effect of reducingor extinguishing net operatingloss which was carriedforward and usedas deductionin computingfuture net income. SingleExciseTax enactedas legislativeresponse to Pennsylvania SupremeCourt decision striking down as violative of federal law method of computing bank sharestax that required taxpayerto include obligationsof United Statesin total assets for purposeof calculatingnet worth. insofar as it allowed shares to of banksor banking associations of stockholders be taxed at their fair market value on basis of net worth of bank.App. jurisdiction probable noted104 S. that imposed tax only upon taxpayerswhich had claimed or intendedto claim refunds or refusedto pay taxes assessed as result of SupremeCourt decision. 14.Hanna.9 S.of Revenue. computedby dividing the value of the bondsby twelve.467U. CaI.St. S . violated this sectionexemptingall federalobligationsfrom statetaxation.43-123 . C t . 2 0 5 U . ArizonaDept.742 of this title which prohibitedtaxation of obligationsof United States. clause.461. As appliedto federalsecurities. P. bondshad The portionof Gen.Ohio. 1214. Home Sav.2762. 831.1981.827. S .742 of this title.1922. Moore.11163.742 ofthis title.1516. 129U. First Nat.9 Cal. Kan.Ed. was not . A. a sum shouldhave beenlisted for taxationas money on handMarch 1.4th Tax Bd.affrrmed105S. the effect of which is to requiretaxation upon property. violatedformer Sec. Bewleyv. Bank of Fredericksburg Com. Federalstatutoryexemptionfrom statetaxationof stocksand obligationsof the United States Government extended to statetaxesthat eitherdirectly or indirectly considered federalobligationin computing tax.32 L. City of Des Moines.2d 937.251Ga.Ct.2d s26.S.Deductions The immunity of national securities from statetaxationis violated by a tax imposedunder to authorityof CodeIowa Sec.2d 361. E d ..5 7 1 .S. of Tax Assessors.2d228.Ohio1889. 638 P. 590.5 8 3 .Bank v.S.Bd. A tax on the shares of stock in a trust companyunderRev.8 4 L .6. which providedthat whereUnited States beenpurchased during the year precedingMarch 1.362.. E d .Ct. 4 7 0U .207 Bank sharetax.2d102. Larfizv.2d 1292.1995. 2 7 S . Sec.S. 886 P. addingtax-exempt incometo grossincomewhen computingnet operatingloss.U. 312 S.l3l Arrz.violated former Sec.

831. providing that federalgovernment This'section obligationsare exempt from taxation understate or local authority does not require a specific deduction for the proportionate value of the federal obligations held by bank in valuing the sharesof bank stock for taxation so long as the method of doesnot directly or indirectly involve any computationwhich takesfederalobligationsinto assessment accountmathematically as a factor in determiningthe value.App. f T a x A s s e s s o tG s .8 4 L .63 N. A savingsbank which owns United States bonds.S. federalobligationsfrom tax without insulatingbank'staxableassets fully insulates G1 a. MontanaDept.742 personal taxablevalue of the company's title.Ct. S . 4 7 0U . 698. that is.Co.Ottumwa Sav.456. attributableto federalobligations of assets allowing deductionfrom bank'snet worth of percentage at the sametime.Tex. 580 P.to have suchbondsdeducted estimate surplusover from its apparent and abovethe amountof its deposits.in the of its propertysubjectto taxation.742 of this title to have a deductionfrom the value of the sharesof the amount of the capitalstockof the companywhich was investedin United States bonds. taxablevalue of its personalproperty. Statecourt not impose tax upon stockholders'interestsin a national bank.S. City of Waco v. 672.l92l.2d 361. a r t o w C o u n t y B do jurisdiction probable noted104S. in the remainderwhich was declaredto be the assessed property.Bank v. Citv of Ottumwa.Ct. BridgeportSav.Y.467 U. Peopleex rel. 119. since obligationsto extentthat they were represented in net worth.Mont.Ct. City of Wacov. 184U. Texas Life Ins.5 8 3 ..W.without making a deduction for federal obligations owned by the bank.-Dallas 1984.it compelleda deductionas such for the amountof the bonds. art.Bd. 2 d 535. E d . determining and then deductingexemptfederal extentto which federalobligationswere represented in bank'sassets.Civ. 2 d 1 0 2 .Tex.248 S. if it was possibleto give it such constructionas to avoid a conflict with the federal statutes.providing for deductionfrom an insurance as the remainderto be the assessed its real estate. v. Dallas County. ' The effect of former Sec.1516. Tex.W.2654.742of this title was that in any schemeof stateor municipal taxation in any equationto reachthe taxable government bondsshouldhave beeneliminatedfrom consideration properly.1 5 4N . 171.W.1 897.would have beeninvalid to that extent.App.Bank v.W. American Bank and Trust Co. 47 N . affirmed248 S. of the value of assets company's R.Bank of Bozeman v. B .2d9I3. of Revenue.it was the court's duty to do so.I978. by which sharetax is measured.App. 8 .Tex.4764. v. 3 1 2 5 .W.Ohio1902.not subjectto taxation.affirmed105S. measuredby corporateassetvalues. Barker.Ed.315.679 S.394.9 7 3 .2d 566. ClevelandTrust Co. therefore.N.95lowa 176. Iowa 1895.Com.8IL. is entitled.or at leastwhen they were included.46L. I2l4.230 S. E .equivalentto a tax on the property of the corporation.a . 1 9 8 4 .and therefore the shareholders were not entitled under former Sec. Y .1923.S.22S. 2 5 BartowCountyBankv . U. .177 Mont. Lander. The amountpaid for United States of a savingsbank bondspurchased out of the generalassets shouldbe deducted from its taxableassets. Bank sharetax had to be calculatedby proportionatemethod of deduction. 1 2 8 .S. First Sec. AmicableLife Ins Co.if so construed of this to make it possibleto have United States bondsexemptfrom taxation under former Sec.

to have deductedfrom the amount of their capital stock paid in. of United Statesbondsfrom statetaxes.))2. where statement showedthat United Statesbondsof certainamountwere includedin the valuation of the propertylisted.not tax appealboards. 79-324.St.also.without deductionof amountof United Statesbondsincludedin valuation.1862.on groundthat officer of company. of Revenue. Nat.Estoppel Life insurance companyis not estopped to questionvalidity of tax imposedby stateupon its property.12Stat.742 of this title. Newark City Bank v.30N.J.73. courts. Peoplev.when assessed underthe New JerseyTax Act of Mar. underActs Feb. S. Mont. complaintraisedquestionas to legality of tax imposedand did not put into issueany questionof valuation.underRev.1977. In the exemption. See.2d 188.12 Stat. v. Assessor of Fourth Ward of City of Newark. & Bankers' Farmers' Life Ins. I Vroom 112.1862.175Mont.had setforth all of the capital stock and other property of the companyat its true value in money. Commissioners of Taxesand Assessments.insteadof their market value. 1863.Law 13. Bank of Red Lodge v. 16.345. Bridges.Mar.33. Kan.30 N.allegedthat Departmentof Revenuehad illegally taxedtheir shares of stockin violation of federallaw.c. 709.76 N.their par value. Co. 573P.had original subjectmatterjurisdiction to hear cases. 1I2. 592. 205.in their complaints. OBLIGATIONS OR PROPERTY EXEMPT FROM TAXATION < SubdivisionIndex > 41 Generally Annuities 42 Bank earnings 60 Bonds43 of indebtedness Certificates 44 capital45 Corporate Debtsowing by United States46 Determiningownership 49a reserve notes53a Federal Gold and silver certificates 47 tax refundclaims48 Income Interest49 .J.79-310. 1879.I925.L. II. Jurisdiction Wherebanks.232 P. 64. the amount of the stockand public securities issuedby the United Statesownedby them at the time of assessment.Y. and accumulatedsurplus. aa^ Corporations were entitled. therefore.under Rev. shouldhave beendeducted from the personalestate.25. 1 Vroom 13.1862.Mechanics' & Traders' Bank v. 28. II7 Kan. Montana Dept. 1862. I 5. 451. incorporated in part in former Sec.U.St.in listing property.3. c. Anderson.

1900.Associationcertificates52 Mutual fund income 52a National bank notes53 Open accountclaims 54 Propertyobtainedby pledgeor obligations55 47 Silver certificates benefits 6l Socialsecurity srock56 Treasury Treasury. neither amount of civil service pension benefits nor amount of stateincome tax payablethereonwas measuredby or computed on or dependentin any way on amount of interest received by pension fund annuity and statewas not requiredto characterize by reasonof its ownershipof United Statessecurities.the words "other obligations"in former Sec.11 Ohio C. 503N. Ill.3d292.App. of Local Government Life Ins.words "otherobligations"within former Sec. Annuities from civil servicepensionplan. 1 1 1 . S . Dept. Shields.W.bonds. Ill.1980. distributionsof tax exemptinterest. S . Governmentinterest" and thus exempt from statetaxation.S.Notes 58 41.44 Affairs.1944. Meunier v.municipal or local authority.Ct. State. 1 Dist. C t . denied114S.Dec.2d Minn.E. of the sametype as thosespecificallyenumerated'Smith v' referredonly to obligationsor securities U .2d973.Generally51 Mortgages. 43. v. estatein her dower interestand distributive sharein her husband's Wherea widow surrenders of an annuity. 8 9L . E d . were subject to stateincome tax. that purpose.referredonly to obligationsof the sametype as specificallyenumerated.635.Checks and orders 57 Treasury. Co. Bonds . 361.Ed.App.D. Under rule of ejusdemgeneris. certrorari Revenue.Ga. exceptas otherwiseprovidedby law. 3 2 3 U.89 Ill.6 5 Davis. all stock. MinnesotaDept.obligationsor property 59 Miscellaneous Money borrowedon obligations50 Mortgages Mortgages.2d I25.742 of this title which providedthat. so as to render it a tax on governmentbonds investedfor Ohio Cir.1993.MontgomeryWard 411 N.1 5 7 . a qualified paid to retired federalemployees Annuity payments pensionplan trust.126L. althoughtaxpayersclaimed that portion of pension annuity paymentswere derived from "U.S.607 . Generally Under rule of ejusdemgeneris.1 0 7 .treasurynotesand other obligationsof United Statesshouldhave beenexemptfrom taxation by state. of payments as pass-through 594.Chisholmv. 42.taxation of suchannuitydoesnot involve the questionof taxationof the consideration property investedto produce such annuity.742of this title.

1 6 . u. Armington.exemptfrom taxation. Department expressway 949.34 c.256.2d965. 108S. 1870.742 of this title.1898.Y.then.also. themselves. Sec'742of this 2T2. 365. c.Ct.given in "satisfactionof auditedand settleddemands.27 R. the United of interestthereonshall be exempt from the paymentof all taxesand dues from taxationin any form by or under state.by statelaw.1983. Commissioners including premiumsabovepar which suchbondscommanded in City of New York.485 dismissed 513 So. and could not have beenenforced."and Gen.2d114.Y.1253.5 7 .4752-2 exempting all stateand municipal obligations from taxation where bank sharestax was imposed on capital owned from state and employedby bank in its banking operations.1 9L . which exempted the exemptioncovered"bonds" and every incidentthereto. CountySav. Bank of Florida' of Revenue bond exemptionprovision. Dale Nat."were not exemptfrom taxationby virtue of former Sec.Pa. 170.1868. 742 of thistitle was.Law128. capital 45. See.1867 Gardiner. of bondsand the bonds. andmunicipalobligations Statutepurporting to exempt county expresswaybonds from statetaxation. Mayor and Controllerof City of New York.. Haight. 48 Barb. Rochester.90 N.c. Certificates issuedby the United Statesto creditors of the governmentfor Certificatesof indebtedness suppliesfurnished to it in carrying on the war for integrity of the Union.352. 1882. 1862.502 Pa.4l A.37 of indebtedness 44.74 U . under which no in determiningwhetherrepealerprovision bondshad ever beenissued. of United States upon propertywhich consisted it was void. which providedfor the issueof United States as well as States.the law was expressed. Sec' issuedand exemptedfrom taxationby from taxation "the bondsand other securities 2.1870.were United of the United States. given by the Treasurer Certificates *d. 608. E d .exempt from statetaxation.J. Com. 44.Bank v. in whateverform.LawsR'I. of the United States. and by which the government promisedto pay the sumsof money specifiedin them with interestat a time named. N."all of which severalclasses title. disbursingofficers.incorporatedinpartinformer UnderActJuly 14. First Union Nat. Corporate . Mutual Life & CasualtyIns' Co.S.1867. that whenever.1987. 1. Monroe or in whateverterms. to securea loan of money. v. 1 6 . such.35' 12 issuedpursuantto Act Mar.S.Impositionof bank shares tax on nationalbank did not violate 72P.5Vroom 128.16Stat.Y. U. a tax was laid bonds. U. The principle of former Sec. . of the United States of indebtedness Certificates and in dischargeof checksdrawn by Stat.570. 33.I.which capital was property interest separate 465A. Peoplev.appeal FIa." the government in the market. 7 W a l l . v.5.99 L'Ed-2d408.RhodeIslandHospital of TaxesandAssessments TrustCo. Sec.did not have to be considered containedin law which createdfranchisetax was sufficient to negateexemption later provided in v. Peoplev' N.N'Y.were beyondthe iaxing power of the states. N. S .Banks v. Bank v.municipal or local authority. 63. Statessecurities.

Whitney 200. BondsoftheUnitedStatesheldbyanationalbank..l23Iowa CapitalstockofabankorganizedunderActsl5thGen. .2d885. city N'W' State 1904'99 ilJu.Assem.s.gg U'S' 97. cityof Independence' FirstNat.|2. c. or bonds States 7 N'W' 105'54Iowa609' Iowa1880.19 P. banking state of shares 93 Mont. 6. 200.19j3 ."pf"'.fll-Td that its capitalnot of the capitalof a bankwhich refused An assessment asnot invadingany of uniteJ i.iso.l905. 234.2Wa11. whichexempted to werewithoutauthority Art. cr.A r t. by exempted expressly not were bonds 1tr Mont' 210' tvtont'tqZS '236P' 1090'73 Ba#u. 142.La.2. 64.lT. to pay o" tht.S.Sec. law in that it took into account.. Sel. 37g. Burlington.rtion and'whenthat property of propeny the on tax a is paid in. of law supfeme was taxation thoughsuch oito"at of the United States' consisting banksor rrrorr"y"Jcapital of state tax property ' East es 1921 '. W h e r e sta te 'u n d e rC o n st.t. State Helena ."r. u. of thefederal stocks 23 Ind'331' 1864' v' Cityof Madison' 793.ause corporation.investedinUni sav' Bankv' city of taxation'German-American state to liable not was securities.S"t' 2' Rev'cod cons]' Mont. 69U.states u. E d . bank to and individualshareholders.. 6 6 5 . or under state 52 S'E' 494'58 W'Va' 559' Court. p. Mont.W. N. See. county. 482. federal violated on banks to be assessed taxes property formulafor determining Tax assessor.s baflks' of part that constituted iederalobligations at leastindire-ctiy.l2growa230.u. of Milescity v. Burlington. Mont'1925' pustH"it"u Stut"Bankv' Rogers' of UnitedStates.though federal securitiesmay be invalid even . Roge's. Corinty OldNat. not invalidastaxing capita^l-was andmoneyed andcredits moneys Laws1929 .Sec'1998 12. be to or secured N'Y'1865' Tax Com'rs' the tari.on a valuation of consists the inrtli.Bankv. of Bankv. of Taxation 9 4 L .New JerseyRealty' imposedwithout discriminationagainstthe 338 of N'J'' U'S'N'J'1950'70 S'Ct' 413' andFinance Division of Tax Appealsin Dept. paid in' equalto the amountof their capitalstock A tax laid by a state"on banks.const.A..291.taxing Bank securities' theit o*""trrrip of UnitedStates of .11L. 1090.1 New Orleans. UnitedStatesbondsownedbyabankarepropertywhichtendstoenhancethevalueofits National valueof its shares' assessabre determiningthe in con_1qya properly are and stock.aspartofitscapitalcannotbetaxedbyt 53 Ind'App'185' t.742ofthistitle.S.60.from of general publicsecurities As former sec. 103 1905. custer government. A statetax on corporatecapital measued by co' v' Ins' Title federarobligations.Ed. Berkeley also. iuui"g' eunk 'ig13' 101N'E--3?5' Beard its authority.'. legartendernoteswassustained consisted in rearestate invested of New orleanscanal & Bankingco v' city laws. or constitution federal the by it to secured right 8l8.Iowa.couldnottaxbothshar esofstoc k ons its tateb tax iax propertyof bankitself it cannot to choosing by itself. capital Sav'Bankv' Security io*u 696' See'also'. carroll. under land.c.4 3 9 . in bonds whichis invesied property 73 Mont'210' 236P.lrq N'W' % 1903.layini tfr" tax is uoia' Nt* York v' government.c.9 Otto97'25 L'Ed' 409' U. s .

456. Ass'n v. bank. 1869. Capital of a private banking firm.44Barb. Robinson.stocks.where assessor assets.393.. AIa. computed tax by determining total amount of capital assetsof eachbank and subtractingfrom that figure only bank's liabilities and assessed value of real estateowned by bank.W. The principle that the capital of an incorporated companyis. securities was exemptfrom stateand municipal taxation.851. Lightner. City of Chicagov. of Kerrville v. State ex rel. although part or the whole of suchcapitalmay be investedin suchbonds.as such.is clearly established.or cuffency. People . City of New Orleansv.of United Statesbonds. v.1875 .affirmed99 U. The capital of a private bank investedin United Statesbonds is not taxable by the state.53 Ala. 97.J. 1877. Rogers.Y. constantlyabsorbedin some form of government by resaleand repurchase.79Mo. Where apart of the capital stock of a corporationwas investedin the bondsof the United States. when investedin bondsor other of the United States. if not entirely.47 Mo.414.exempting"all shares of the capital stock of corporations which are requiredto list their propertyfor taxation. Mclver v. Tex.Ed.and was illegal.I87l. Lunt.S.2d 466."did not apply to shares of the stock of a national bank whosecapitalconsisted mainly. & Sav. A bank. 25 L.App.which the corporationwas required not to list for taxation. St. ' is not a holder of A shareholder in a bank whosecapital is investedin governmentsecurities held by the the securities of and an assessment suchsecurities.N..683 S. Louis Bldg. Haight. CharlesSchreiner Bank. Louis bonds.29 La. securities exemptfrom statetaxation. Co.it is also true that the sharesof the capital stock of a corporation can be taxed at their true value. 1883. Building & Sav. 1871 .421.1861.which claims that aportion of its capitalis investedin United Statesbonds.Ass'nv. 1870. The Alabamarevenuelaw of 1868. Lightner. 148. 409.Prac. New OrleansCanal & Banking Co.Ass'nv.and it will be the duty of their officers to pay the tax on behalf of the shareholders.Law 128. of stock in under the name of "shares and a tax was levied upon this part of the capital stock separately companies.their shares shouldbe so assessed St. Lightner.37l. St. Louis Building & Sav.cannotbe taxed by a state.-SanAntonio 1984. Assessors of Town of Barton. 47 Mo. Kerrville Independent SchoolDist.unlessthere is an expresscongressional permission to tax the same. upon his shares is not an assessment v. 393. value of their the to cover as with the amountof stock held by each.42Mo. together Where the offrcers of a bank furnish the assessor with the namesof the shareholders.34 N. must show affirmatively the exact amount of its capital so invested. While it is true that United States bonds.29 How.5 Vroom 128.Ann.52IlI. such capital will not be exemptfrom taxation." incorporated the assessment was againstthe corporationin respectof its capital stock.Davisv.283.1868.Mutual Life & CasualtyIns. otherwise.

as taxationby the statewould have hinderedthe exercise constitutional of the federalgovernment's powersto borrow money on the credit of the United States.O.when that interestis includedin computingtaxpayer's net incomeor for purposeof incometax or the like.44 N. .Ed. affirmed 2 3 t 2 .130L.E. 47. L. bonds. of Revenuev.742of this title was of doubtful application.141N.Y. Former section 742of thistitle providing that.E.557. J . C t .S. 2 dt 5 2 .Ct. Statev.E.479tJ.Y.2d380.AstoriaLight.Y. v.Dec.S.Heat& PowerCo. I 5 I Ohio St. & App.5 4 7 . 0.2dl74.97Ill. L .1923.184. 417.1994. 46. 4 8 2U . | 15 S.Treasurynotesand other obligationsof the United Statesshall be exempt from taxationby or under stateor municipal or local authorityappliedto incomein form of interestearnedby bank on variousfederalobligations.1858. A . Loewenstein.9 6 L .93L.probable 107S. An unpaidbalanceof a debt owed on accountfrom the United Stateson a fully performedwar contractwas not taxableunder GreaterNew York Charterand McKinney'sN. Incometax refund claims Under former Sec.N. Mayor of City of Newark. S .1899.Y. and to raiseand support armies.459 U. jurisdictionnoted 405.Tax Law Sec.Neb.17How. 1 8 2 .v. of Revenue.Ct.Tenn. that was true.2d 470.Ohio 1949. v. Co.2d 392. earnings U.Ed.86 N.5.l12Ill. Glander. to declarewar. Debtsowing by United States GNMA mortgage-backedsecuritieswere not "obligations of the United States"exempt from ad valoremtax. 318.1986.Prac. NebraskaDept. 344.742of this title "otherobligations"did not include claim of corporation listed as asset on its books againstUnited Statesfor refund of federalincome taxeson accountof depreciation accelerated of war facility whetheramountwas agreedupon or not so as to exemptclaim from inter countypersonalpropertytax. Soc.2d 1278.692. RockfordLife Ins.InternationalLife Assur. E d . notwithstandingformer Sec. People ex rel.for purposes exemptionfrom statetaxation. Commissioners of Taxes.947. all stocks. 12. Garner. 103 S. 48.primarily notesand bills of the United StatesTreasuryand obligationsof federalcreditbanks. Glidden Co. 6 5 4 .492 N.1983. MemphisBank & Trust Co. Cantor. 6 3 N . 206.74 562.8d.A foreign corporationis not liable to be taxed for any portion of its capital investedin the stock of the United States.J.430. 901. Department I11. v.Ct.S.39 49. N.En. 28 Barb. U. Gold and silver certificates Notes and gold and silver certificates of the United Statesare not taxable by or under the authority of any state. 1 0 7S . v.without the permission of the United States. exceptas otherwiseprovidedby law.2d 1.236N. Interest Intereston federalobligation is "considered" offederal statutory in statetaxation.

HammondLead Products. Taxpayerwas not requiredto pay stateincometax with respectto proceeds receivedfrom passthrough of investment trust for short-termUnited Statesgovernment representing securities. J .1987. Md. 2 d9 9 8 . 9 4 L . of Taxation. 658. 5 4 L Statewas not prohibited.with tax them.2d294.FormerSec. . N .I987. 2 d 9 l 3 . Corp. Division of Tax Appealsin Dept.was exempt from statetaxation. Director. Div.93L. C t . interestincomereceivedby trust directly from United Statesgovernment. v. 5 0A 8.1987.Ct.New JerseyRealty. U. Garfield Trust Co. 1 9 5 0 . certioraridenied108 S.310 Md.v. of Taxes. 1 0 2 N . 2 d 1 1 0 4 . Norberg.3 9 0 .2d9rr. 552A. I n d . v. 2812.d. Comptroller of the Treasury. . Stateof Ind. 9L. but ratherprivilege of doing business and by net incomewhich includedintereston federalobligations. from including interest bondsin calculatingbank'snet income for purpose receivedon FederalHome Loan Banks consolidated franchisetax on financial institutions.149Vt.1981 . 531A. 2 d 7 8 4 . S .2d I92. S 4 1 3 . C t . B d . S . S .925.Ed. J . VermontDept.Yt. statewas not taxing bondsor intereston of nondiscriminatory as financial institution in corporateform in state. E . Tax incomeearned C o m ' r s .Title Ins.2d 418. .3 3 8U . dismissed Taxationv. 6 6 5 .Inc.Md.742 of this title which generallyexempted interestbearingobligationsof the United Statesfrom stateand local taxation also exemptedaccruedbut unpaid interest on federal securities. by doctrine of intergovernmentalimmunity. 664. 4 8 5U . 4 7 9 Inclusion of interest derived from. Interestearnedby taxpayeron investmentin retirementfund which investedsolely in federal obligationswas incomederived from federalobligationsand as such. 1 0 0L . 320 Md.F. of Taxationand Finance o f N .546 A . 7 0.p p e ad l i s m i s s e1 d0 7S . 1596. First United Bank & Trust. N . Bank. SawyerEstate. 1 9 8 6 . tax exempt United net income government corporation's States obligationsin the allocationformula usedto measure levy of tax on taxsubjectto tax by statewas impermissible. v. with bank by which bank sold United States Corporationwhich had enteredinto agreement to agreed TreasuryBills and Notes to corporationfrom its portfolio and corporationsimultaneously resell them to bank at agreed-uponprice and on certain date with bank paying corporation interestwas 'not so was not entitledto exemptionfrom stateincome tax for interest "owner" of the securities. 4 3 9 . appeal U .U . 1 0 3 5 9 Paymentsby borrower pursuantto repurchase agreementinvolving borrower's conveyanceof federal obligation to trust and trust's reconveyance of obligation in future were not interest derived from obligation and were federal subjectto statetaxation. In re ThomasC. and proceedsfrom corporation'ssale of. 1990. J . v. J .in light of fact that it involved an indirect Federal Products exemptfederalsecurities.2d345.Vt.Ct.486 ' State'scorporation businesstax was nondiscriminatory within intent of federal public debt statuteso as to permit tax to include interest income of federal obligations in the net income baseand facevalue of the obligationsin the net worth base. 4 2 0 a. 5N .R. S .I. 352. 429 A.S. IncomeTax Div. Co.t 4 9 V t . MarylandNat. E d .2d 441.578A. StateDept. Keysv. of Assessments measured 108 S. 1 9 95 17 .1 0 4 8 . pursuant to repurchase agreement.

1989.statecorporationexcisetax could be appliedto interest earnedon federalobligations.742.34. Or. 1.Dec.1984. Farmers& Traders StateBank v. Where corporation enteredinto agreementwith bank whereby bank sold United StatesTreasury bills and notesto corporationfrom its portfolio and corporationsimultaneously agreedto resellthem to bank at agreed-upon price and on certain date with bank paying corporation interest at fixed rate for period betweenoriginal saleand repurchase.83 L.Dec.2d 1 0 3 33 .A. Ill..2d 776. 918.S. corporationwas not entitledto exemptionfrom state incometaxesfor interestincome earnedpursuantto repurchase agreement was. Stateof Or.2d210.290.1981.E. Lenckos. 458 N.565. interestreceivedby bank on Puertofucan bondsheld by the bank was includablein its net income taxable for purposes of the computationof the bank excisetax.Tax 1990.A.a collateralized loan because corporationdid not bearany risk of market fluctuationsand could not sell the securities to third parties. which specifically for in lieu bank taxesunder68 O.81. Rochester Bank & TrustCo. Hammond Lead Products. excludeinterest andthusviolated31 U.where secondstatefranchisetax was basedon amountof capitalstock in corporation's authorized articlesof incorporation.C.App. Borg v.l2l Ill.S.308 Or. Tax-exempt interest income on obligations of the United Statescould not be taken into considerationin apportioning taxpayer bank'staxable income under formula utilized to determine portion of financial institution'smultistatebusiness incomewhich could be taxed by Illinois.2d 424.1984. Section745 of Title 48 exemptingPuertoRican bondsfrom federalor statetaxation includedby implicationthe sameexceptioncontainedin former Sec.. Continental 464 N. Bank and Trust Co. Interestincome from niutual fund derived from interestpaid by federal govemment to fund on on to holdersto of the United Stateswas not subjectto stateincometaxationwhen passed securities fund. Department of Revenue.E. Johnson. excludedinterestincome earnedon stateand local obligationsfrom taxableincome.08. agreement. certiorari denied105S. Ill. Department of Revenue. Stateof Ind.W.2d 1099.S.repurchase in effect.469U. Minn. (1976Ed.Ed. Sec.290.App. Commissioner of Revenue. subd..E.742of this title which exemptedobligationsof from taxation. Or.549N.E.305 N. Pacific First FederalSav.779 P.296.2d231. Illinois Nat.2d 998.80 I11. of Chicagov. 1989. v. providing that the statestatutoryexemptionfrom taxationfor obligationsof the United States and its possessions was not applicable to corporations taxableunderM. 0 8O r .Ct. and which barsa tax regardless of its form if federalobligationsare considered .361. Ind.S.Bank v.2d 1064." therefore. v. under M.that suchobligationswere exempt "exceptas otherwiseprovidedby the United States law.Inc. Interestearnedon governmentnationalmortgageassociation certificateswas neither so immune from statetaxationnor did it constituteother obligationsof United States constitutionally that it was not exempt from statetaxation under this section. affirmed575N.Stateof Or.1981 Secs. in computingthe tax. Provisions 2370 and237l.3d43.4 Dist.did not likewise ' incomefrom federalobligations. and corporation failed to prove that any burden on United States Treasuryexistedif exemptionwas denied.S.) Sec. Sec. 102111. 774P. 3 3 2 .interestrate on United Statesobligationswas not material to computationof tax on corporation'sinterest income. Tax Com'rs. ratherthan on interestearnedon federal obligations.2d1365. Even if federalpublic debt statuteexceptsonly one statefranchisetax from its prohibition on stateor local taxation offederal obligations. 76 Ill.

ur.Ed. 1144.77 L.. certiorari Sav.2d 635.1985. was sole stockholder who was successful Where contractor.E. 199I.1959.A. 57 on obligations 50. whether that party has ability to sell securitiesto third in be Govemmentpaysinterestincome.253.Tenn. Chattanooga The interest de tax rncome 714.5.200 Mont.St. Determining ownershiP exemption In determining ownership of federal obligations on which owner would be entitled to bears ownership party claiming from stateincome tax for interest received. First Tennessee Government v. Stateof Ind.Y. of federalland and gavemortgages corporations private financing for construction of project with payment of l2 in order to procure necessary by United States.Y. S.S. 49A.C.S. v.OklahomaTaxCom'n. denied103 S.2d I378.N. government housingforits military personneland at sametime avoid increasing tax recording were not exemptfrom mortgage and mortgages not pledgeits credit in the usual sense of Stateof N'Y'.o.Ct.148. cl. 358.was designedto relieve governmentof obligation to provide mortgagesguaranteed did the national debt. 1748er seq' of of federalland and gavemortgages which obtainedleases of corporations es bonds nited S id in ': did s xable sta ea not have been t of th ediate f the bo taxa State w.Silberblatt. under Sec.186N.5N.361U'S' d 646.whereby successfulbidder on military housing project becamesole stockholder under Sec' 1748 et seq' of Title which obtainedi.Y.rrt -uy considerwhether party. Inc.736 S'W.Ok1a. Sec.4L.2d 496.159N. cl-2 (the FirstofMcAlesterCorp. Bank. 52.654P.2d195. Interestincome received by taxpayerson exempt federal obligations was not includable in net of calculatingMontana corporationlicensetax.v.certiorari N. 2 (the "BorrowingClause")and Art.A. 1982. whether seller risk of market fluctuations. 6.3 N. 1.115Tenn. HammondLead Products. 9r2.742of this title.Ct.8.3128.1987.alsoviolatedU.S. v. denied80 S. Money borrowed of Town of Money borrowedon governmentbondsis liable to taxation. Peoplev.709P. Tax Commission underformer Sec. . MCA 15-31-101' First Federal incomefor purposes Mont. Tax Com'rs.Art.2 183.Rep. Interestincomefrom obligationsissuedby FederalNational MortgageAssociationand National MortgageAssociationwas subjectto stateexcisetaxation.Inc.and Loan Ass'n v. Assessors Flushing.2d1026' "supremacyClause"). Departmentof Revenue..2d bidder on military housingproject. 5 1.2d601.Const.1886.y. Mortgages--Generally of Arrangement. Olsen.and whetherobligationsmust considered or United States 5 N'E'2d 998' computingtax.462 U .Ind.Ed.

SN.361U. States United timely payments.. States united of obligations other and notes treasury on default by the united Statesto pay the certificates rocal authority.td.Ed. 152' 87.Y.with mortgage private financing for construction of project Titre 12 in order to procure necessary in absenceof statute'that the be assumed. certificates was not constitutionally Interestearnedon federarnationar mortgageassociation Statesso that it was not of the obligations constitut"-ott it did nor Yiit:9 taxation exempt from state ".Y.Ill.Mortgage associationcertificates .742ofthis title which providedthat. Life Ins.they did not have congressional to pay specifiedsumsat specifred States usedto not were of p. Silberblatt.-pt from taxation by state..ill'App' + ilst'tgg+' necessary.APP'3d from were not constitutionally immune Governmentnational mortgage associationcertificates former of l..i t"--i:^illing statutorily exempt from statetaxation.l2l Ill. paymentsguaranteeJfy United States.2d sole stockholder bidder on military housingproject' was who was successful where contractor.5." issuedby private financial institutionsand commonly known as Instruments were fundamentally different from by Govemment National lvtortgageAssociation guaranteed taxation as "other and thus were not exempt from state statuti immunity tax in specified securities to make of certificatethat boie primary obligation obligationsof the united States'. v' Tax Commissiontf Stutt of N'Y'' by federalgovemment.565.upi.5N. Tax Commission S.Dec.Silberblatt. 43' Ill.E.certiorari 646. N'y'tgsq' 159N'E"2d v.Inc.s otherwiseprovidedby laY' alt s1c-\s' -!l1|^tl Sec. grrtu*or *u.89llLAPP3d292' standardsin effect published assessment Fact that Department of Local GovernmentAffairs exempt from mortgageassociationcertificates were national government that indicating erroneously .Ill'19 of Revenue.it was isru. excepias municipal or *.S. 607.y'. . contractor and corporate paymentsguaranteed governmentor lts tax as instrumentalitiesof federal and local taxation or statemortgagerecording owned eachcorporation would ultimately be notwithstanding fact that all oi.Ct.Dec. promise by the United certificates. 52.v.186N. State. 107S'Ct' 23 12' 482U'S' 1 82'96L'Ed'zd U.rs & TradersStateBank u.253.S. 912' 4L'Ed:d 253'361U'S' 80 S'Ct' aeniea certiorari N.but a *""t "unt-11f 458 N'E'2 d 1365'76 parm. .o-i'" to pay'-andcertif.S. denied80 S.ia 635. so as to exemptmortgag"' government 195' 186N'Y'S'2d of statelf N.S.r. in right of fact that guarantyof to borrow were not issuedby government agency certificates that and promise binding a not issuerwas Ward essentialgou"tnrn""J{fu":11"n' Montgomery money on credit of Uniied Statesto finance an 44 Ill'App' 1 Dist'1980'411 N'E'2d 973' effairi Government Local of Dept.'GinnieMaes.rcates fuIl faith and credit of the united states in support be so that governmentcredit would not ptiuut" securecredit for government.2d183.4 L. Sec' 1748et seq'of of federalland and gavemortgageiunder which obtainedleases of corporations with mortgage private financing for construction of project Titre 12 in order to procure necessary mortgagorswere not exempt from state by united states. ---.*.ut stock of agencies. 912. Co. v.2d195. 159 N'Y'1959' tnc. loft rron. 18 3 . Illinois Dept' obiigo'' Rockiord Life Ins' Co' v' not only.S.it would not recordingtax' f'o* N:yI":\mortgage function was involved.2d 646. 635.otherobligationsof the United states"within meaning capitalstocktax and were not state. in that pledging authorizatton times.

44 Ill. of StateRevenue. like other typesof United Statescurency.and dues. but insteadwas intereston loansfrom mutual funds to sellerborrower.89 lll.774P..thus.was taxableto holders of fund eventhough securities would be tax exemptif incomewere paid directly by federal government.E. W .E.Tax1994. 1869.308 Or. Mutual fund income Interestincome earnedby mutual funds from repurchase agreements involving federal securities was not intereston "obligationsof the United States Government. Stateof Or. 53A. Federal reserve notes Federalreservenotesare not federalobligationswithin meaningof exemptionfrom state t'axation for federalobligations.1 i 5 S. Minn.S. v.1990. Board of Com'rs of MontgomeryCounty v. Mutual fund income derived from repurchase agreements. 32 Ind. Trust which investedin shortterm federalsecurities and repurchase agreements involving federalsecurities did not actually own the securities.public charges. 607. did not exemptthe notesof nationalbanksfrom statetaxation.1864.App.W.2d 24.3d 292. 2 Am.218. Elston. 172.nationalcurrency.460N.l980. 52A.Ind. 327.Neb. 557. Co.and other obligationsof the United Statesshouldhave beenexemptfrom statetaxation.state's capitalstocktax would not precludea subsequent correctionof the error and taxationof the property. .Rep.470 N . Yurista v. Loewenstein. taxes. though it was assertedthat investment community had relied on such exemption.Dept. U... Richey v. 53.Iowa 1991. MontgomeryWard Life Ins.Dec.2d 470.27.treasurynotes. federalreservenotesare legaltenderfor all debts.Nebraska Dept. State.Dept.and that the words "obligationor other securityof the United States" meantall bonds. Or. 4l I N.and other representations of value which may havebeenor may be issuedunder any Act of Congress. IndianaDept. Everettv. 2 d1 3 . of Revenue v. Ill.United States notes. Department of Revenue.App." for purposesof federalstatutory exemptionfrom taxationby states. which declared that all bonds. Mutual fund dividends which were directly attributableto income from the United States treasurynotesand bondswere exempt from stateincometaxation. of Revenueand Finance. State.2d 1099.c. 130L.2d 1375. Ind.13 Stat.2d 973.634 N.Nationalbank notes Act June30. and.34. of Local GovernmentAffairs. I Dist.Ed. under which sellers other than the United Statessold United Statesobligations to mutual fund and simultaneouslyagreedto repurchase sameor similar securities at a price that includedinterestduring period of sale.Ct.1994.1989. Commissionerof Revenue. neithersupremacy clausenor constitutional prohibition againststatetaxationrequiring obligationof governmentor intereston obligationof government to be considered in computingtax appliedto prevent Statefrom taxing the incomederivedfrom repurchase agreements. incorporated in part in former Sec. Borg v.742of this title.

U. Smith45.37N. States.Cityof Pittsburghv. Hooperv. s66.Ed.S. Openaccountclaims An open account claim againstthe United Statesdoesnot representa "credit instrumentality of the United States"within constitutional immunity from stateand local taxation of all properties. 9. I I 1.5P.2 Black 635. Former Sec.2B|ack620.2 A.FirstNat.89 L. United of of obligations revenue providing local taxation violate statute for exemptionfrom stateor 105 S.75. of Tax Assessors. Peoplev.463 U. Whitney.I7 L. v.Marsh. in computationof tax. States. 157. Morrison. Commonwealthv.1869. Propertyobtainedby pledge or obligations Though governmentbonds are not subjectto taxation. Co.25 How. rather. See. E d .55Pa.1868.75. Bank v.470 Exemptionof all stocks.1829. Mass. 904. 1250.J.77 AmericanBank and Trust Co. also. 662.Mich. 449. E d . 8 9 L .37 So.Tex.Ga.S.as construedby Georgia SupremeCourt. E d . Stock and securitiesissuedby the United Statesunder the power to borrow money are exempt from taxation. . Massachusetts.1845.S.K. Boardof Com'rsof Taxesand Assessments Countyof New York.Prac.C.S.Prac. 3 2 3U . l S 6 3 .Ed.65 S.7 Wall. 2 d 535.2d1072. the money or property obtainedby a pledgeof suchbondsis subjectto taxation.1863.Y. to allow bank to deduct from net worth not full value of United did not Statesobligationsit held but.U. 141 Ala. P e r r y .rehearing denied104S. Bank of Atlantav. Bkg.A1a. FourthWardof CityofNewark. N. Peoplev. 107.W. 335. directly or indirectly. C i t y a n d C o u n t y o f N e w Y o r k . Davis.Cas.8 4 L . for City and Countyof New 1867. Bank of Commonwealth v.Ed. FirstNat. U. NewarkCityBankv. 55.Ed.S. 56. 365.19 L.1985.7 L.39. functions.2d 77 L.5 8 3 . Connelly.742 of this title did not apply to an openaccountclaim of a creditorof United Smithv.Bank v.or both.treasurynotesand other obligationsof United Statesfrom every form of taxationthat would requirethat eitherthe obligationsor the interestthereon. onremand679 S. N.U. DallasCounty.1819.1 0 7 . S. Mfg. L.Bank.1944.Ct.U 6. Davis.C. 632. City of Rochester.New York ex rel. Assessorof for City and 1862.bonds.456.1983. 6 Wall. 449. 1867. Fed.S.91 Ark.Y.and instrumentalities of the federalgovernment. Nat. Ass'nv.Smith v. No.Y. T S.1863.C a n o l l v .456. 635 (note).1863.S. Stock Georgia statuteimposing property tax on fair market value of sharesof bank stockholders.9Ky.only percentage of fair obligationsattributableto assets. 459. State. 1 Vroom 13. Commissioners of TaxesandAssessments York. Hamilton v.1944.I22 S.Ga.45.Ed.1870.Law 13.S. Westonv. N. be of their form. FirstNat. Boardof Equalization County. Y .Y. barsall suchtaxes.Ct.regardless considered.67U. MonroeCountySav.54. 57. 2.3369. U .620. S .26l. 1516.30N.21IJ. N . S . 4 5 1 . 111.2l Ind. 855. City of Charleston. City of Madison v.323 U.463U.Ct. Bartow CountyBd.2 Pet. 65 S.Ga. F.18 L.1904. N.Ed. Bank of Commerce L .Ed.W.Ct. v. 16.Y.2d1457.Ct. 988.11l .5.41How. Commissioner of Taxes. 103 S.157.1 7 of Independence C.1909. 481.

bonds. lg62. 200 u. 50 L. 265. 310.Cas. 33. affirmed 26 S. 205. also. Tax com'rs.Ed. and is not exempt though money originally deposited may have beenTreasurynotes. 8 9 2 . lg L.7 L'Ed' 481.S. 57. and actuallyhaving constituted. treasury notes"includeonly obligationsof the governmentsimilar in character to thosespecificallynamedand given underthe generalpower to bonow money on the credit of the united States. U'S' 449'2Pet' 449. affirmed26 s.ct. 25.thecompany's assets. Gold coin and united StatesTreasurynoteson deposit in New york city were not subjectto .& Loan Soc. charleston. 4g5. Hibemia Sav. 60. 934. See.c.or underthe authorityof sucha law.27 Yttlt-a!*es.N. Checksor ordersof the Treasurer of the united States payableon demandare not within the reasonand scopeof the rule forbidding such taxation by the statesas may tend to destroy the powers of the nationalgovernmentor impair their efficiency.s. cal. and to issueand returnthereforobligationsin any appropriate form. 26.s.Ed.c. 1g63. U.N.26 s.s.Cas.a specific deductionfor federalsecurities held by the bank is not necessarily requiredas the value ofthe shares of stockhaveno fixed or necessary relation to. 7 8T e x . intendedto circulateas money. city and county of san Francisco.7 wall. 265.S. and they do not include checksgiven in paymentof suchobligations'HiberniaSav. city andcounty of SanFrancisco. lg2g. 26.Ed. cal.v. Heard.S. weston v. Treasurychecksand orders united StatesTreasurychecksor orders issuedfor interest accruedupon registeredbonds of the United States were intendedfor immediatepayments anJcould have beentaxed by a statein the hands of the owner without having violated former sec. 679s.ct. 3 r0.2d 566. Peopleof Stateof New yorklx rel Bank of New york v. Tex.w.market value may be determined by suchfactorsas the experience and ability.l g63. Boardof Sup'rs of New york county.4Am. Tex. 345. 73' 12 stat' 709.v.200u. 20i.-Dallaslgg4. v. 58.17 L.tairrg comparable returnswith comparable safety' AmericanBank and Trust co.742of this title. on stock issuedfor loansmadeto the is repugnant to the constitution. 12 Stat.s. The words "and other obligations" read in connection with the context ..cal.934. with the nationalbank notes'the ordinarycirculatingmedium of the country. 3.c.2Black 620.Ann. 6 0 7 . City and cfunty of SanFrancisco.72 p.200 u.stocks. 74 u. 920. Dallas county.obligationsof the national government.1903. 1903 ' 72 P.Ann.ct.Ed.Ann. U.934. Griffin v. 4 Am.4 Am.of the -*ug. generaleconomicprospects in the community'and selling prices of altemative_investm#. 139 cal.Bank & Loan Soc.t gos. Treasurynotes United statesnotesissuedunderActs Feb.y.& Loan Soc. 920. and.A tax itpo-1t9 by a law of any state. 495. Hibernia Sav.cas.y.14 !h-e S.People v. 139 cal.Mar. 310. 451.1g90.Ed. 265.1906. 50 L. Money in the hands of others subjectto draft is a credit due a bank.App. when a tax is assessed on the market value of shares in a statebanking corporation."*nt. yi. 4g5. and exemptfrom statetaxation.50 L. were moreover.w. v.

Tenn.742of this title. certiorari Dallas 1981. 298.2d 9.2d Bewleyv. CaI.2d408. Nat.488 U.67-751 imposing tax on net earnings net eamingsas including interestreceivedon obligationsof the United Statesand its instrumentalities and its political but not interestearnedon obligationsof Tennessee and obligationsof other states.2 Am. 102L. 2 9 1 .29.2d rehearing within the state Nonpropertyexcisetax on privilege of operatingbank or savingsassociation States United of by exceptionto statuteprohibiting taxation tax contemplated was a franchise v. such statutedid not preclude statefrom imposing incometax on socialsecurifv benefitsreported 417 N.e.S. E d . Memphis Bank & Trust Co. to withdraw in any respect Congress did not intend for former Sec. v.W.615 S. 4 6 3 U .692. Franchise Tax Bd. 2 d 3369. and its political subdivision subdivision. 329.taxationunderthe Alabamarevenuelaw of 1868. Bank earnings of banksdoing businessin statewhich defines T.2d 1292. 392.ref.appeal 60. S . Vamer v.S.2d 341"227 Neb.48 Ala.Rptr.485 So.Ct.Bank of Texasv.74 L. Elston. Dale 465A.Ed.1253. 1983.459U.Pa.Ct. 170. r e v e r s1 e0 d3S . Neb.37Cal. to statetaxation of national or statebank shares. Board of Com'rsof MontgomeryCounty v.2d114.1983.popularly known as "greenbacks.its consent in part 103 granted 634 S.9 Cal. 2 d 2 7 6 .injunctiongranted 1072. U.l869.Departmentof Revenue U.discriminates in favor of securitiesissued by Tennessee bank tax impermissiblv discriminates and against federal obliqations and.4 5 9U .r. as amended.Bankv.103S. 801. 59. Bank of Florida.Ct.4th526.2d 679 onremand 1457. Karnes.W.W.S.A.S. Tennessee asainst federal sovernment and those with whom it deals. United StatesTreasurynotes. benefits 61. therefore. Miscellaneous obligationsor property Bank shares tax imposedon nationalbank violatedthis sectionexemptingobligationsof United from taxationby or under stateauthoritywheretax was computedon basisof equity capital and States whereequity capitalwas determinedin part by bank'sownershipof United Statesobligations.C. Boersmav.1988.S.99L.Ct.2d810. Fla' 1987.2d2. Calhoun. dismissed 108S. Federalstatutoryexemptionfrom statetaxationof stocksand obligationsof the United States Govemment did not prohibit statefrom taxing dividend income derived from repurchaseagreements 886 P. aDDeal as federal taxable income. S. 32Ind. C t . Socialsecurity "Obligations. 9 6 6 .2d965.W. First Union Nat. Com.77 L. 566."were not liable to state taxation.1995.Civ'App.Ed. S. Childs. 39. 7 4 L .Ed. 1250..Ind.Ct." for purposesof federal statute stating that stocksand obligationsof United StatesGovernmentare exempt from taxation by stateor political subdivisionof statewere investment securities. Sec. 109S. 178.Rep. Tex.. 7 1L . 27.502Pa. 1872.463 U.327. involvingfederalsecurities.Ed.2d562. n. dismissed .. E d . Garner. 949.rather than government's dutv to pay social securitv benefits and thus.513 obligationsby the states.Ala. S . 8 5 5 . denied104 S.

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