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GRAVES V. NEW YORK EX REL. O'KEEFE, 306 U. S. 466 (1939)

U.S. Supreme Court

Graves v. New York ex rel. O'Keefe, 306 U.S. 466 (1939)

Graves v. New York ex rel. O'Keefe

No. 478

Argued March 6, 1939

Decided March 27, 1939

306 U.S. 466


1. The receipt of salary by a resident of New York as an examining attorney for the Federal Home Owners' Loan Corporation, is constitutionally subject to nondiscriminatory taxation by a State. P. 306 U. S. 475.

2. For the purposes of this case, it is assumed that the creation of the Home Owners' Loan Corporation was a constitutional exercise of the powers of the Federal Government, and that all activities of the Government constitutionally authorized by Congress are governmental, and stand on a parity with respect to immunity from state taxation. P. 306 U. S. 477.

3. Whether Congress, as an incident to the exercise of specifically granted powers, has power to grant tax exemptions extending beyond the constitutional immunity of federal agencies which courts may imply is a question not determined in this case. P. 306 U. S. 478.

Page 306 U. S. 467

4. No purpose of Congress either to grant or to withhold immunity from state taxation of salaries of employees of the Home Owners' Loan Corporation is expressed or implied in the Home Owners' Loan Act of 1933, 48 Stat. 128, or is to be inferred from the silence of Congress. P. 306 U. S. 479.

5. A tax on income is not legally or economically a tax on its source, and there is no basis for the assumption that the economic burden of a nondiscriminatory state income tax on the salary of an employee of the National Government or of a governmental agency is passed on so as to impose a burden on the National Government tantamount to an unconstitutional interference by the one government with the other in the performance of its functions. P. 306 U. S. 480.

6. Assuming that the Home Owners' Loan Corporation is clothed with the same constitutional immunity from state taxation as the Government itself, it cannot be said that the present tax on the income of its employees lays any unconstitutional burden upon it. P. 306 U. S. 486.

7. Collector v. Day, 11 Wall. 113, and New York ex rel. Rogers v. Graves, 299 U. S. 401, are overruled insofar as they recognize an implied constitutional immunity from nondiscriminating income taxation of the salaries of officers or employees of the national or state governments or their instrumentalities. Id.

278 N.Y. 691, 16 N.E.2d 404, reversed.

Certiorari, 305 U.S. 592, to review the affirmance of an order, 253 App.Div. 91; 1 N.Y.S.2d 195, setting aside a decision of the Tax Commission of the New York rejecting a claim for refund of a tax.

Page 306 U. S. 475

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