GREINER, EXECUTRIX OF KINGSLEY,
v.
LEWELLYN, COLLECTOR OF INTERNAL REVENUE

U.S. | 1922-04-10
No. 187
258 U.S. 384 Supreme Court of the United States (1922) Caution
Also reported at: 66 L. Ed. 676 · 42 S. Ct. 324 · 1922 U.S. LEXIS 2286 · SCDB 1921-097
Cited by 77 cases

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Synopsis

The executrix of an estate challenged the inclusion of Pennsylvania municipal bonds in calculating the net value of the decedent's estate for federal estate tax purposes, arguing that taxing these bonds violated the constitutional prohibition on federal taxation of state instrumentalities. The Supreme Court affirmed that Congress had the power to include municipal bonds in determining taxable estate value because the estate tax is an excise tax on the transfer of property rather than a direct tax on the bonds themselves, and the constitutional immunity from federal taxation does not extend to protect property merely because it is transferred at death.

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Opinion of the Court
Mr; Justice Brandéis

Mr; Justice Brandéis delivered the opinion of the court.

This action was brought in the federal court for Western Pennsylvania against the Collector of Internal Revenue to recover part, of an amount assessed' as estate tax under the Act of September 8, 1916, c. 463, Title II, 39 Stat. 756, 777, and paid by the plaintiff as executrix of the estate of Kate B. Kingsley. In determining the -net value of the estate upon the transfer of which the tax was imposed, the Collector had included bonds issued by political subdivisions of the State of Pennsylvania. The executrix claimed that to include these municipal bonds was in effect to tax them — which the Federal Government is under the Constitution without power to do. Pollock v. Farmers’ Loan & Trust Co., 157 U. S, 429, 583, 654; 158 U. S. 601, 618, 693. The District Court overruled this claim and' 'entered judgment for defendant. ' The case comes here on writ of error under § 238 of the Judicial. Code. Whether Congress has power to require that state municipal bonds held by a decedent be included for the purpose of determining the net value on which the estate tax is imposed is the sole question presented for decision.

That the Federal Government has power to tax the transmission of legacies-was settled by Knowlton v. Moore, 178 U. S. 41; and that it has the power to tax the transfer of the net assets of a decedent’s estate was settled by New York Trust Co. v. Eisner, 256 U. S.

345. The latter case has established' also that the estate tax imposed by the Act of 1916, like'the earlier legacy or succession tax, is a duty or excise, and not a direct tax like that on income from municipal bonds. Pollock v. Farmers’ Loan & Trust Co., supra. A State may impose a legacy tax on a bequest to the United States, United States v. Perkins, 163 U. S. 625, or on a bequest which consists wholly of United States bonds, Plummer v. Coler, 178 U. S. 115; Orr v. Gilman, 183 U. S.

278. Likewise the Federal Government may impose a succession tax upon a bequest to a municipal corporation of a State, Snyder v. Bettman, 190 U. S. 249, or may, in determining the amount for which the estate tax is assessable, under the Act of 1916, include sums required to be paid to a State as inheritance tax, for the estate tax is the antithesis of a direct tax, New York Trust Co. v. Eisner, supra. Municipal bonds of a State stand in this respect in no different position from money payable to it. The transfer upon death is taxable, whatsoever the character of the property transferred and to whomsoever the transfer is'made. It follows that in determining the amount of decedent’s net estate municipal bonds were properly included.

Affirmed.

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Cited By (27 total)

  • James v. Dravo Contracting Co., 302 U.S. 134 (U.S. 1937)
    …e, 272 U. S. 713; Macollen Co. v. Massachusetts, 279 U. S. 620, 629. The Banks v. The Mayor, 7 Wall. 16, 25. Home Ins. Co. v. New York, 119 U. S. 129; Home Ins. Co. v. New York, 134 U. S. 594. Plummer v. Coler, 178 U. S. 115; Greiner v. Lewellyn, 258 U. S. 384. Hibernia Savings Society v. San Francisco, 200 U. S. 310. Weston v. Charleston, 2 Pet. 449, 465. Jaybird Mining Co. v. Weir, 271 U. S. 609. Indian Motocycle Co. v. United States, 283 U. S. 570; Panhandle Oil Co. v. Mississippi ex rel. Knox, 277…
  • Willcuts v. Bunn, 282 U.S. 216 (U.S. 1931)
  • Indian Motocycle Co. v. United States, 283 U.S. 570 (U.S. 1931)
    …S. 216, 225; Denman v. Slayton, 282 U. S. 514. A bequest [*581] to the United States or a state may be subjected to an inheritance tax by the other, United States v. Perkins, 163 U. S. 625; Snyder v. Betiman, 190 U. S. 249; see Greiner v. Lewellyn, 258 U. S. 384, although the consequent indirect burden is apparent. Even if it could be said that there is some reason, which the Court has never attempted to state, for the distinction which was made by the decision in Panhandle Oil Co. v. Mississippi, 277 U. S.…

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