Petitioners, national banks that lease offices and maintain
their principal places of business in New York City, brought the
present action after the city had assessed them for its commercial
rent and occupancy tax for the period June 1, 1970, through May 31,
1972. The New York Court of Appeals held that the tax could be
imposed pursuant to Pub.L. 91156, as amended, which provided that,
as of January 1, 1973, national banks were to be treated as state
banks for the purposes of state tax laws, and which contained
temporary provisions that enabled States to tax national banks on a
more limited basis from its date of enactment, December 24, 1969,
until January 1, 1973. A saving clause, however, prevented the
imposition prior to January 1, 1973, of any tax in effect prior to
the enactment of Pub.L. 91-156, unless such imposition was
authorized by subsequent "affirmative action" of the state
legislature.
Held:
1. The disputed tax could not be imposed on petitioners prior to
January 1, 1973, because the affirmative action requirement of the
saving clause was not satisfied by a mere rate increase in the
city's commercial rent tax passed subsequent to Pub.L. 91-156. The
affirmative action provision was designed to require the States,
when imposing new taxes on national banks prior to January 1, 1973,
to consider the impact of such taxes on the existing balance of
taxation between national and state banks, and nothing in the
legislative history of the rate increase suggests that Pub.L.
91-156 was given the slightest attention.
2. The city's commercial rent and occupancy tax is not a tax on
"tangible personal property" within the meaning of the provisions
of Pub.L. 91-156 that render the saving clause prohibition
inapplicable to such a tax. The question is one of federal law;
and, for the purposes of Pub.L. 91-156, Congress did not consider
real estate occupancy taxes to be taxes on tangible personal
property.
Certiorari granted;
43
N.Y.2d 425, 372 N.E.2d 789, reversed.
Page 440 U. S. 448
PER CURIAM.
Petitioners are national banks that lease office space in New
York City, where they maintain their principal places of business.
After the city assessed them for its commercial rent and occupancy
tax for the period June 1, 1970, through May 31, 1972, they brought
the present action, arguing that their status as national banks
rendered them immune from the tax. Petitioners relied on our cases
that have held that national banks may not be taxed except as
permitted by Congress.
First Agricultural Bank v. State Tax
Comm'n, 392 U. S. 339
(1968);
McCulloch v.
Maryland, 4 Wheat. 316,
17 U. S.
436-437 (1819). The New York state courts upheld the
assessments, finding the necessary congressional authorization in
Pub.L. 91-156, 83 Stat. 434, as amended, 12 U.S.C. § 548 (1970
ed.).
Pub.L. 91-156, as amended by Pub.L. 92-213, § 4(a), 85 Stat.
775, provided that, as of January 1, 1973, national banks were to
be treated as state banks for the purposes of state tax laws. The
Act also contained temporary provisions that enabled States to tax
national banks on a more limited basis from its date of enactment,
December 24, 1969, until January 1, 1973. Banks like petitioners,
with their principal offices in the taxing State, could be
subjected to any nondiscriminatory tax generally applicable to
state banks. A saving clause, however, prevented the imposition
prior to January 1, 1973, of any tax in effect prior to the
enactment of Pub.L. 91-156, unless such imposition was authorized
by subsequent "affirmative action" of the state legislature. The
saving clause prohibition did not apply to "any tax on tangible
personal property."
The New York Court of Appeals held that the disputed tax could
be imposed on petitioners prior to January 1, 1973, because the
affirmative action requirement of the saving clause had been
satisfied by an amendment of the commercial rent tax passed
subsequent to Pub.L. 91-156 which increased the rate of the tax.
43
N.Y.2d 425, 372 N.E.2d 789. We disagree.
Page 440 U. S. 449
Based on our study of the legislative history of Pub.L. 91-156,
we are quite sure that the affirmative action provision was
designed to require the States, when imposing new taxes on national
banks prior to January 1, 1973, to consider the impact of such
taxes on the existing balance of taxation between national and
state banks. On its face, a mere increase in the tax rate under an
existing tax law does not indicate that such attention has been
given; and nothing in the available legislative history of the rate
amendment suggests that Pub.L. 91-156 was given the slightest
attention.
The New York Court of Appeals also concluded that, under New
York law, the commercial rent and occupancy tax was a tax on
tangible personal property, and hence not subject to the
prohibitions of the saving clause. Whether the tax at issue is a
tax on tangible personal property within the meaning of Pub.L.
91-156 is a question of federal law; and, for the purposes of that
statute, it appears to us that Congress did not consider real
estate occupancy taxes to be taxes on tangible personal property.
This is sufficiently clear from the provision of the Act dealing
with the interim taxation of banks having their principal offices
outside the taxing State. Those provisions, in numbered paragraphs,
list five kinds of taxes that were permissible. Paragraph (2)
specified "[t]axes on real property
or on the occupancy of real
property located within such jurisdiction" (emphasis added),
while paragraph (4) referred to "[t]axes on tangible personal
property." It follows that the saving clause forbade collecting
from banks like petitioners preexisting real estate and occupancy
taxes without affirmative legislative action, although it did not
bar taxes on tangible personal property.
We accordingly conclude that the New York Court of Appeals was
in error. The petition for certiorari is granted, and the judgments
of the New York Court of Appeals are reversed.
It is so ordered.
