Allen v. Regents
304 U.S. 439 (1938)

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U.S. Supreme Court

Allen v. Regents, 304 U.S. 439 (1938)

Allen v. Regents of University System of Georgia

No. 882

Argued April 28, 29, 1938

Decided May 23, 1938

304 U.S. 439

Syllabus

1. Substitution of the official successor to a collector of internal revenue who resigned and died pending a suit to restrain collection of a tax assessment held proper under § 11, Act of February 13, 1925. P. 304 U. S. 444.

2. R.S. § 3224, providing that "no suit for the purpose of restraining the collection or assessment of any tax shall be maintained in any court," is inapplicable in exceptional cases where there is no plain, adequate, and complete remedy at law. P. 304 U. S. 445.

3. A corporation, created by a State as an instrumentality of the State and having control and management of state educational institutions, sought to restrain collection by distraint of sums assessed by the Commissioner of Internal Revenue in consequence of neglect to collect and pay over the federal tax, Revenue Act of 192, § 500(a)(1), as amended, on admissions to intercollegiate football games played at those institutions. The corporation contended

Page 304 U. S. 440

that the exaction would unconstitutionally burden a governmental activity of the State. The tickets of admission to the games in question bore printed notices to the effect that the corporation was not liable for any admission tax, but that an amount equivalent thereto was being collected as part of the price of admission, and would be retained as such unless it should later be determined that the corporation was liable for the tax. Held, the suit was within the equity jurisdiction of the federal court. Pp. 304 U. S. 445, 304 U. S. 448.

The State was entitled to a determination of the question whether the statute, as construed and applied, imposed an unconstitutional burden, and the issue could not adequately be raised by any other proceeding.

4. A corporation created by the State as an instrumentality of the State and having control and management of state educational institutions at which athletic exhibitions are held and the public are charged for admission, may constitutionally be required to collect, make return of, and pay to the United States the admissions tax imposed by Revenue Act of 1926, § 500(a)(1), as amended by Revenue Act of 1932, § 711. P. 304 U. S. 449.

5. The tax immunity implied from the dual sovereignty recognized by the Constitution does not extend to business enterprises conducted by the States for gain. P. 304 U. S. 453.

93 F.2d 887, reversed.

Certiorari, 303 U.S. 634, to review the affirmance of a decree enjoining a United States collector of internal revenue from distraining bank deposits representing moneys claims by the Regents of the University System of Georgia, a state instrumentality, respondent in this case. See also 10 F.Supp. 901; 18 id. 62; 81 F.2d 577.

Page 304 U. S. 441

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