31:
336:, Congress clarified the circumstances in which governmental salaries could be taxed. The Act stated that federal salaries could only be taxed if the state tax "does not discriminate against such officer or employee because of the source of such compensation." If the state exempted its own employees from taxation, then it cannot tax discriminate against federal employees by subjecting federal salaries to taxation.
319:(1938), the Court ruled that state salaries would not be exempt from federal income tax unless it caused an "actual and substantial" burden on the governmental functions of the state. Exempting state employees from federal taxation would intrude on the "national sovereign power to tax" and create "a privileged class of taxpayers." In
412:
In a lone dissenting opinion, Justice John Paul
Stevens argued that the tax was not discriminatory because it treated federal employees the same as other Michigan taxpayers. Since most Michigan taxpayers did not receive retirement benefits from the state, they were also subject to the Michigan income
356:
In
Memphis Bank & Trust Co. v. Garner (1983), the Supreme Court held that states could not levy franchise taxes on federal bond interest if they exempted their own state bonds from taxation. Upon learning of the decision, Davis filed amended Michigan tax returns to 1979, claiming tax refunds on
352:
judge. He retired from the federal government in 1980. From 1979 to 1984, he paid $ 4,299 in
Michigan income taxes on his federal retirement benefits. At the time, Michigan exempted its own retirement benefits from taxation. However, pensions paid by the federal government, other states, and private
400:
The
Supreme Court ruled 8-1 in favor of Davis. The majority opinion, written by Justice Anthony Kennedy, held that states could not tax federal retirement benefits if they exempted their own state retirement benefits from taxation. Since retirement benefits were earned by employees as deferred
266:
holding that states may not tax federal pensions if they exempt their own state pensions from taxation. In the 1930s, the federal and state governments began to charge income tax on salaries paid to each other's employees. However, reciprocal treatment was required under the doctrine of
357:
his federal retirement benefits. The
Michigan Commissioner of Revenue, the Michigan Court of Claims, and the Michigan Court of Appeals ruled that Davis was not entitled to a refund. The Michigan courts ruled that he was not covered by the nondiscrimination provisions of
421:
Michigan chose to extend the income tax exemption to federal retirement benefits. Davis received $ 4,299 of tax refunds. Fourteen states that exempted their own state pensions from taxation had to refund billions of dollars to federal retirees.
290:(1819), the Supreme Court held that Maryland could not tax the Second Bank of the United States, as it would interfere with the bank's right to exist under federal law. The decision gave rise to the principle of
1385:
1340:
409:, which covered "pay or compensation." The state of Michigan could remedy its discriminatory taxation by either removing the tax on federal pensions or levying a tax on its own pensions.
1032:
963:
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72:
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508:
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asked
Congress to remove the reciprocal tax exemption for federal and state employees. The Supreme Court subsequently overturned its precedents from the 19th century. In
139:
applies to federal retirement benefits. Michigan violated intergovernmental tax immunity by taxing federal pensions while exempting its own state pensions from taxation.
599:
1325:
1080:
1052:
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271:. The Court's ruling extended the reciprocity to pensions, since they are a form of deferred compensation for services previously rendered by an employee.
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After the elections in
October the President will appoint Chairpersons for the following Chapter functions: ... Paul Davis Scholarship
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often argue their own cases when they are sued in an official capacity, it is unusual for private parties to appear
1089:
1066:
807:
1125:
1000:
955:
310:
115:
1211:
1141:
1016:
883:
325:(1939), the Court held that federal salaries were also subject to "nondiscriminatory" taxation by the states.
992:
891:
740:
315:
375:
365:, as he was retired and therefore no longer a federal employee. Davis appealed to the U.S. Supreme Court.
194:
162:
119:
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Virginia's nearly 200,000 federal retirees pay an estimated $ 150 million annually in state income taxes.
1249:
836:
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512:
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464:
321:
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64:
306:(1870), the Court also held that the federal government could not tax the salaries of state officials.
844:
431:
brief in the case, established the Paul S. Davis scholarship in honor of the plaintiff in the case.
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300:(1842), the Court held that states could not tax the salaries of federal officials. In
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182:
515:
490:
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compensation, federal pensions are entitled to the nondiscrimination provisions of
223:
Kennedy, joined by
Rehnquist, Brennan, White, Marshall, Blackmun, O'Connor, Scalia
67:
406:
362:
333:
249:
170:
136:
576:
Constitutional Law for a
Changing America: Institutional Powers and Constraints
294:, which was gradually extended from government agencies to their employees. In
79:
382:
at oral arguments. Davis divided his time with
Michael K. Kellogg from the
749:
617:
91:
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The National Association of Retired Federal Employees, which filed an
370:
344:
Paul S. Davis served the federal government as a lawyer for the
1314:
1108:
797:
761:
30:
618:"Davis v. Michigan Department of the Treasury(Oral Argument)"
328:
In the Public Salary Tax Act (1939), which was codified as
106:
Judgment for Michigan, Michigan Court of Claims; affirmed,
1033:
National Federation of Independent Business v. Sebelius
964:
National Federation of Independent Business v. Sebelius
1386:
United States Supreme Court cases of the Chase Court
633:
631:
353:
industry were only entitled to a $ 7,500 deduction.
54:
Paul S. Davis v. Michigan Department of the Treasury
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640:"Court Decides All Pensions Created, Taxed Equally"
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59:
49:
42:
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659:"Court Decision Leads To Hearing On Pension Taxes"
386:'s office, who appeared for the United States as
368:In a rare occurrence, Davis argued his own case
773:
8:
1376:United States taxation and revenue case law
600:"Preferential pension tax treatment barred"
1311:
1105:
794:
780:
766:
758:
20:
450:
448:
446:
444:
1134:Pollock v. Farmers' Loan & Trust Co.
1009:Pollock v. Farmers' Loan & Trust Co.
708:Davis v. Michigan Department of Treasury
687:NARFE Chapter 289 Lansing, MI Newsletter
574:Epstein, Lee; Walker, Thomas G. (2016).
262:, 489 U.S. 803 (1989), is a case in the
259:Davis v. Michigan Department of Treasury
1269:Brushaber v. Union Pacific Railroad Co.
1150:Brushaber v. Union Pacific Railroad Co.
480:Dobbins v. Commissioners of Erie County
440:
18:1989 United States Supreme Court case
7:
788:United States constitutional tax law
606:. Associated Press. March 28, 1989.
553:"The Public Salary Tax Act of 1939"
374:before the Supreme Court. Although
1277:Burnet v. Sanford & Brooks Co.
1231:Commissioner v. Glenshaw Glass Co.
638:Ashley, Douglas (March 29, 1989).
551:Shaw, Lucien W. (September 1939).
346:Securities and Exchange Commission
264:Supreme Court of the United States
36:Supreme Court of the United States
14:
1371:United States Supreme Court cases
1366:United States federalism case law
1331:Amendment affecting apportionment
878:Decline of sovereign tax immunity
718:803 (1989) is available from:
689:(August 2015-September 2015): 1.
118:1987); leave to appeal denied by
112:160 Mich. App. 98, 408 N.W.2d 433
1326:Apportionment of representatives
297:Dobbins v. Commissioners of Erie
29:
1336:Origination of bills of revenue
861:Pollock v. Farmers' L. & T.
657:Paust, Mathew (April 6, 1989).
108:Davis v. Department of Treasury
1381:1989 in United States case law
948:Bailey v. Drexel Furniture Co.
1:
1296:Bowers v. Kerbaugh-Empire Co.
1185:Bowers v. Kerbaugh-Empire Co.
680:"Chapter President's Message"
1158:Stanton v. Baltic Mining Co.
1025:Stanton v. Baltic Mining Co.
905:Uniformity of indirect taxes
1196:Taxable corporate dividends
1407:
1223:Taxable corporate earnings
1090:Cooley v. Board of Wardens
1067:Cooley v. Board of Wardens
1053:State import-export duties
921:Brushaber v. Union Pacific
822:Brushaber v. Union Pacific
750:Oyez (oral argument audio)
663:Daily Press (Newport News)
644:Daily Press (Newport News)
292:intergovernmental immunity
280:Intergovernmental immunity
269:intergovernmental immunity
1391:Legal history of Michigan
1321:
1310:
1261:Deductions and exemptions
1126:Springer v. United States
1104:
1001:Springer v. United States
956:United States v. Kahriger
793:
311:Franklin Delano Roosevelt
240:
148:
131:
28:
1212:United States v. Phellis
1142:Flint v. Stone Tracy Co.
1017:Flint v. Stone Tracy Co.
578:(9 ed.). CQ Press.
993:Hylton v. United States
892:South Carolina v. Baker
376:state attorneys general
831:Sovereign tax immunity
163:William J. Brennan Jr.
120:Michigan Supreme Court
45:Decided March 28, 1989
43:Argued January 9, 1989
1341:Federal voting rights
1250:Crane v. Commissioner
837:McCulloch v. Maryland
557:California Law Review
316:Helvering v. Gerhardt
287:McCulloch v. Maryland
78:109 S. Ct. 1500; 103
1081:State tonnage duties
884:Flint v. Stone Tracy
845:Veazie Bank v. Fenno
396:Opinion of the Court
1118:History and purpose
1041:California v. Texas
972:California v. Texas
932:Regulatory taxation
741:Library of Congress
309:In 1938, President
195:Sandra Day O'Connor
1316:Related provisions
1288:Diminution of loss
1204:Eisner v. Macomber
1177:Eisner v. Macomber
816:Scope of authority
624:. January 9, 1989.
528:Graves v. New York
350:administrative law
322:Graves v. New York
159:Associate Justices
1353:
1352:
1349:
1348:
1306:
1305:
1100:
1099:
869:Davis v. Michigan
456:Davis v. Michigan
384:Solicitor General
255:
254:
175:Thurgood Marshall
155:William Rehnquist
24:Davis v. Michigan
1398:
1312:
1106:
940:Head Money Cases
913:Head Money Cases
853:Collector v. Day
808:Authority to tax
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504:Collector v. Day
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303:Collector v. Day
242:Supremacy Clause
144:Court membership
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1061:Privilege taxes
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340:Case background
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207:Anthony Kennedy
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187:John P. Stevens
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723:Google Scholar
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183:Harry Blackmun
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585:9781483384078
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563:(6): 705–711.
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389:amicus curiae
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359:4 U.S.C.
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330:4 U.S.C.
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151:Chief Justice
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133:4 U.S.C.
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92:Oral argument
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984:Direct taxes
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236:Laws applied
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98:Case history
71:
53:
15:
604:Tulsa World
541: (1939)
518: (1870)
493: (1842)
171:Byron White
1360:Categories
435:References
407:§ 111
363:§ 111
334:§ 111
275:Background
250:§ 111
137:§ 111
116:Mich. App.
800:Article I
417:Aftermath
80:L. Ed. 2d
60:Citations
706:Text of
220:Majority
88:Argument
348:and an
231:Stevens
228:Dissent
127:Holding
1299:(1926)
1280:(1931)
1272:(1915)
1253:(1947)
1234:(1955)
1215:(1921)
1207:(1920)
1188:(1926)
1180:(1920)
1169:Income
1161:(1916)
1153:(1915)
1145:(1911)
1137:(1895)
1129:(1881)
1093:(1851)
1070:(1851)
1044:(2020)
1036:(2012)
1028:(1916)
1020:(1911)
1012:(1895)
1004:(1881)
996:(1796)
975:(2020)
967:(2012)
959:(1953)
951:(1922)
943:(1884)
924:(1915)
916:(1884)
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887:(1911)
872:(1989)
864:(1895)
856:(1871)
848:(1869)
840:(1819)
825:(1915)
753:
747:
744:
738:
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732:Justia
729:
726:
720:
710:,
582:
530:,
507:,
482:,
459:,
428:amicus
405:
380:pro se
371:pro se
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205:
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683:(PDF)
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413:tax.
103:Prior
716:U.S.
622:Oyez
580:ISBN
536:U.S.
513:U.S.
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