TAXATION-POWER OF OBLIGOR STATE TO TAX BY INHERITANCE

Authors

Abstract

The recent ruling to the effect that the state of the obligor can not tax by inheritance, bonds owned by a non-resident and having a situs at his residence, confirms the conviction that tax lawyers have long had, more especially with respect to the bearer type. Farmers' Loan & Trust Co. v. State of Minnesota, 50 Sup. Ct. 98 (involving both registered and bearer bonds). The majority view announces in quite clear terms a disapproval of double taxation and a willingness to renounce positions taken by the court in the quite recent past. After committing itself to the proposition that "intangibles" are taxable. by one state alone it selects that of decedent's domicile as the favorite. This choice finds preponderating support. Mr. Justice Stone, concurring specially, seems to frame his opinion to meet the force of the dissent by .Mr. Justice Holmes. He fully realizes the import of the majority view, but is unwilling to denounce double taxation of a single economic interest because the court has repeatedly held that the Constitution is not offended by it. He questions the extra-territorial efficacy of the law of the obligor's jurisdiction in "creating" obligations on the bonds, a matter stressed by Mr. Justice Holmes as justifying that state's power to tax. The law determining the validity of the transfer of the bonds, i.e. that of decedent's domicile, was stressed.

Recommended Citation

TAXATION-POWER OF OBLIGOR STATE TO TAX BY INHERITANCE, 28 Mich. L. Rev. 916 (1930).
Available at: https://repository.law.umich.edu/mlr/vol28/iss7/7