Burnet v. Brooks
288 U.S. 378 (1933)

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U.S. Supreme Court

Burnet v. Brooks, 288 U.S. 378 (1933)

Burnet v. Brooks

No. 496

Argued February 9, 1933

Decided March 13, 1933

288 U.S. 378


1. In computing the tax on the transfer of the estate of a nonresident decedent under the Revenue Act of 1924, §§ 301-304, that part of the gross estate was to be returned and valued "which at the time of his death is situated in the United States."


Page 288 U. S. 379

(1) That bonds of foreign governments and of foreign and domestic corporations and stock of foreign corporations, belonging to a nonresident alien but kept in this country at the time of his death, should be included in the computation. Pp. 288 U. S. 386, 288 U. S. 406.

(2) A local cash deposit belonging to the decedent should likewise be included if not "deposited with any person carrying on the banking business," and therefore specifically excepted by § 303(e). Pp. 288 U. S. 395, 288 U. S. 406.

(3) It is to be presumed that Congress, by the phrase "situated in the United States," meant to embrace all property, tangible or intangible, having a situs subjecting it to the federal taxing power, in accordance with principles declared by this Court before the statute was passed, and it is inadmissible to restrict the intention because of limitations on state taxing power which were determined later. P. 288 U. S. 388.

(4) This construction is confirmed by administrative practice and legislative history, and is not inconsistent with special qualifying provisions found in § 303(d) and (e) of the Act. Pp. 288 U. S. 389-394.

2. Substantial reenactment in later Acts of a provision theretofore construed in regulations of the department charged with its administration, is persuasive evidence of legislative approval of the regulations. P. 288 U. S. 393.

3. As a nation with all the attributes of sovereignty, the United States is vested with all the powers of government necessary to maintain an effective control of international relations. P. 288 U. S. 396.

4. Taxation by one nation of securities belonging to a nonresident alien which are physically within its jurisdiction violates no principle of international law. P. 288 U. S. 396.

5. The remedy for multiple taxation resulting from several nations having jurisdiction to tax the same interest on distinct grounds -- citizenship, domicile, source of income, situs -- is by international negotiation and convention. P. 288 U. S. 399.

6. The United States is as competent as other nations to enter into such negotiations and become a party to such conventions unless a limitation upon its sovereign power in that regard is necessarily found to be imposed by its own Constitution. P. 288 U. S. 400.

7. A tax by the United States on securities and bank accounts owned by a nonresident alien but kept in this country, being within the federal taxing power and not being arbitrary or confiscatory, is consistent with the due process clause of the Fifth Amendment. P. 288 U. S. 400.

Page 288 U. S. 380

8. The principle that one state of the Union may not tax securities kept in the State but owned by a resident of another state is a limitation due to the relation of the states to each other in our constitutional system, and has no application to the power of the federal government to tax the property of a nonresident alien. Pp. 288 U. S. 400, 288 U. S. 403.

60 F.2d 890 reversed.

Certiorari, 287 U.S. 594, to review the affirmance of a judgment sustaining a ruling of the Board of Tax Appeals, 22 B.T.A. 71, which set aside a deficiency assessment.

Page 288 U. S. 386

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