American B. & T. v. Dallas County
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463 U.S. 855 (1983)
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U.S. Supreme Court
American B. & T. v. Dallas County, 463 U.S. 855 (1983)
American Bank & Trust Co. v. Dallas County
Argued March 29, 1983
Decided July 5, 1983
463 U.S. 855
Until 1959, Rev.Stat. § 3701 provided in pertinent part that
"[a]ll stocks, bonds, Treasury notes, and other obligations of the United States, shall be exempt from taxation by or under State or municipal or local authority."
In 1959, Congress amended § 3701 by adding a second sentence:
"This exemption extends to every form of taxation that would require that either the obligations or the interest thereon, or both, be considered, directly or indirectly, in the computation of the tax,"
exceptions only for nondiscriminatory franchise taxes or other nonproperty taxes, and for estate or inheritance taxes. In 1979 and 1980, Texas imposed a property tax on bank shares, and the tax was levied on bank shares of petitioner state and national banks and their shareholders. The tax was computed on the basis of each bank's net assets without any deduction for the value of United States obligations held by the bank. Petitioners, in separate state court actions, sought mandamus, declaratory, and injunctive relief, asserting that 3701, as amended, required that the value of their bank shares be reduced by the proportionate value of the United States obligations held by the bank. Ultimately, the Texas Court of Civil Appeals, in companion cases, upheld the tax.
1. The Texas tax on bank shares violates Rev.Stat. § 3701, as amended. Pp. 463 U. S. 862-867.
(a) The 1959 amendment to § 3701 set aside this Court's pre-1959 interpretation that the statute did not prohibit nondiscriminatory taxes imposed on discrete property interests such as corporate shares, even though the value of that discrete interest was measured by the underlying assets, including United States obligations. Under the plain language of the 1959 amendment, a tax is barred regardless of its form if federal obligations must be considered, either directly or indirectly, in computing the tax. Giving the words of amended § 3701 their ordinary
meaning, there can be no question that federal obligations were considered in computing the bank shares tax at issue here. The express exceptions to the 1959 amendment -- franchise taxes and estate and inheritance taxes -- reinforce this conclusion. The fact that the Texas tax statute, on its face, does not require use of the equity capital formula or any other formula based on the value of federal obligations is immaterial. The tax assessors in fact used the equity capital formula, which is the usual and customary method employed in Texas, and thus the taxes at issue violated § 3701's plain language. Pp. 463 U. S. 862-865.
(b) The legislative history of the 1959 amendment supports construction of the amendment according to its plain language. Nothing in that history suggests that Congress considered shares taxes to fall outside the scope of the prohibition. Rather, Congress intended to sweep away formal distinctions and to invalidate all taxes measured directly or indirectly by the value of federal obligations, except those taxes specified in the amendment. Pp. 463 U. S. 865-867.
2. Nor is the Texas tax authorized by Rev.Stat. § 5219, as amended. That statute provides only that States may not impose discriminatory taxes on national banks. Section 5219 is capable of coexistence with the plain language of § 3701, as amended, and there is no justification for construing § 5219 to create an inconsistency. An unexpressed congressional authorization to tax bank shares at their full value should not be read into the plain language of § 5219 on the basis of the language of that section as it existed before it was amended in 1969. Before 1969, § 5219 authorized the States to tax national banks in specified ways, including taxing bank shares. However, that version did not mention federal obligations; § 5219 was, and still is, addressed to the historically and analytically distinct federal interest in prohibiting state taxes that impose an intolerable burden on national banks. The prior version of § 5219 need not be read as giving implied consent to taxation of federal obligations, and the plain language of § 3701, as amended in 1959, need not be seen as an "implied repeal" of the pre-1969 version of § 5219. The doctrine disfavoring implied repeals thus is irrelevant here. Pp. 463 U. S. 867-873.
615 S.W.2d 810 (Bank of Texas judgment), American Bank & Trust Co. judgment, and Wynnewood Bank & Trust judgment reversed.
BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, WHITE, MARSHALL, and POWELL, JJ., joined. REHNQUIST, J., filed a dissenting opinion, in which STEVENS, J., joined, post, p. 463 U. S. 873. O'CONNOR, J., took no part in the consideration or decision of the cases.