A Kentucky statute imposed on its citizens an annual ad valorem tax on their bank deposits outside the state at the rate of fifty cents per $100 and at the same time imposed on their bank deposits within the state a similar tax at the rate of ten cents per $100. Decedent, a resident and citizen of Kentucky, died in 1929. On several prior tax assessment dates, he had large funds on deposit in New York banks which he failed to report for taxation purposes. The state brought suit against the executor to recover the tax, interest, and penalties. The Kentucky Court of Appeals overruled the executor's contentions that the classification was void under the due, process or equal protection clauses and that it violated the privileges or immunities of national citizenship. On appeal to the United States Supreme Court, held, that the classification was reasonable due to the difficulty and expense of collecting the tax on out-of-state deposits and that no privilege or immunity of national citizenship was violated. Colgate v. Harvey was specifically overruled, it being held that the right to carry out an incident to a trade, business, or calling, such as deposit of money in banks, was not a privilege of national citizenship. Justices Roberts and McReynolds dissented. Madden v. Kentucky, (U. S. 1940) 60 S. Ct. 406.
C. E. Gressman,
CONSTITUTIONAL LAW - PRIVILEGES AND IMMUNITIES OF FEDERAL CITIZENSHIP - DISCRIMINATORY TAX ON OUT-OF-STATE BANK DEPOSITS - COLGATE v. HARVEY OVERRULED,
Mich. L. Rev.
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