TAXATION

Issues

This case presents the Supreme Court with an opportunity to resolve whether federal legislation to promote interstate commerce would override a state’s right to determine how to tax competing industries. The Alabama Department of Revenue (“ADR”) argues that state taxation is entitled to deference from the courts, so long as a state provides a justification for why its taxing plan for one industry differs from that of a competing industry. CSX Transportation, on the other hand, argues that the ADR’s differentiated tax plan is discriminatory when applied to its direct competitors, and that the tax plan therefore inhibits interstate commerce. This case will ultimately decide the extent of state discretion in designing state tax codes pertaining to different industries. 

Questions as Framed for the Court by the Parties

Written by

Edited by

Additional Resources

Issues

This case asks the Supreme Court to decide an issue of statutory construction; specifically, on what basis should the Secretary of the Treasury evaluate taxpayer violations of the Bank Secrecy Act (“BSA”). The Bank Secrecy Act requires citizens with a financial interest in a foreign bank account to report that financial interest to the Commissioner of Internal Revenue for each year that the interest exists. Alexandru Bittner contends that evaluating violations under the Bank Secrecy Act on a per-form basis is consistent with the statute’s text, history, and purpose. The United States counters that the text of the Bank Secrecy Act clearly outlines that a violation occurs on a per-account basis, not a per-form basis, and that the statute’s history and purpose confirm this viewpoint. The outcome of this case has heavy implications for tax law, banking regulations, civil penalties for tax violations, and financial interests in foreign bank accounts.

Questions as Framed for the Court by the Parties

Issues

In 1997 and 1998, the Oneidas re-purchased title to parcels of aboriginal land within Sherrill, New York, in open market transactions. Sherrill subsequently assessed property taxes, which the Oneidas ignored, asserting that the properties are contained within the Oneida Indian Reservation and therefore are considered to be "Indian Country", which is nontaxable by state municipalities. Sherrill sent the Oneidas notices of tax delinquency, held a tax sale where Sherrill repurchased the parcels, then initiated eviction proceedings. The U.S. District Court for the Northern District of New York found in favor of the Oneidas. On appeal, the Second Circuit affirmed the District Court and also found that the 1838 Treaty of Buffalo Creek, 7 Stat. 550, did not require the Oneidas to abandon their lands in the state of New York in exchange for land in Kansas, and further, that a reservation continues to exist even if a tribe ceases to exist and is protected under the Non-Intercourse Act. The Supreme Court must now assess the Second Circuit Court's interpretations.

This case consists of four separate questions, which ultimately address whether properties reacquired by the Oneida Indian Nation of New York are subject to taxation by the City of Sherrill, New York and Madison County, New York.

1. Whether alleged reservation land is Indian Country pursuant to 18 U.S.C. § 1151 and this Court's decision in Alaska v. Native Village of Venetie Tribal Gov't, 522 U.S. 520 (1998) where the land was neither set aside by the federal government nor superintended by the federal government?

2. Whether alleged reservation land was set aside by the federal government for purposes of Indian Country analysis under 18 U.S.C. § 1151 and Native Village of Venetie Tribal Gov't where the alleged reservation was established by the State of New York in the 1788 Treaty of Fort Schuyler, and not by any federal treaty, action or enactment?

3. Whether the 1838 Treaty of Buffalo Creek, which required the New York Oneidas to permanently abandon their lands in New York, resulted in the disestablishment of the Oneida's alleged New York reservation?

4. Whether alleged reservation land may (i) remain Indian Country or (ii) be subject to the protections of the Indian Trade and Intercourse Act, or Non-Intercourse Act, 25 U.S.C. § 177, if the tribe claiming reservation status and Non-Intercourse Act protection ceases to exist?

Questions as Framed for the Court by the Parties

Issues

This case asks the Supreme Court to examine § 11-21-12(c)(6) of the West Virginia Code (“§ 12(c)(6)”), which grants an income tax exemption for the retirement compensation of state retirees, but not of federal retirees. Petitioner James Dawson contends that § 12(c)(6) violates federal law 4 U.S.C. § 111 (“§ 111”), which prohibits discriminatory tax treatment against federal employees by state governments. Under the Supreme Court’s Davis test, according to Dawson, a state law violates § 111 by imposing higher taxes on income from the federal government than income from the state government when there are no significant differences between the two to justify the heavier tax burden placed on federal income. Respondent Dale Steager, the State Tax Commissioner of West Virginia, counters that § 12(c)(6) does not discriminate against federal retirees because § 12(c)(6) applies in very narrow cases. Steager further argues that West Virginia treats federal employees the same as state employees, and Dawson is not similarly situated to state retirees that are eligible for this tax exemption. The outcome of this case will affect state-level taxing policy and tax exemptions afforded only to state employees.

Questions as Framed for the Court by the Parties

Written by

Edited by

Additional Resources

Issues

The due process clause of the Fourteenth Amendment requires the government to give “reasonably calculated” notice to inform an affected party of an upcoming governmental proceeding. The issue before the Court is whether, when mailed notice of a tax sale or property forfeiture is returned undelivered, due process requires the government to take additional steps to locate the owner before taking the property. A holding that the government is required to take additional steps may subject the government to significant administrative burdens and undermine the process of transferring property rights. A holding that due process does not require the government to take additional steps may make property from tax sales more transferable, but may also deprive property owners of their constitutional right to due process.

Questions as Framed for the Court by the Parties

Additional Resources

Issues

The Supreme Court will determine whether stock that a railroad transfers to its employees is taxable under the Railroad Retirement Tax Act (“RRTA”), 26 U.S.C. § 3231(e)(1). Petitioners Wisconsin Central Ltd. et al. (“Wisconsin Central”) argue that Congress enacted the RRTA to create a retirement program separate and distinct from the program created under the Federal Insurance Contributions Act (“FICA”). Wisconsin Central further asserts that when interpreting the RRTA as Congress intended at the time of enactment, stock transfers from railroad employers to employees were not considered as “compensation.” Finally, Wisconsin Central contends that the Court should not give weight to the exceptions added after the RRTA’s enactment in determining the original definition of “money remuneration” and that those exceptions are not rendered “surplusage” when using the medium-of-exchange definition for money. Respondent United States (“Government”) responds that Congress intended the RRTA’s tax structure to align with FICA’s—which taxes non-qualified stock options—by defining “compensation” as “any form of money remuneration,” which includes stock. The Government maintains that Congress added exceptions to the RRTA to help clarify the statute’s meaning; and, here the language indicates that “money” includes non-cash payments such as non-qualified stock options. Although Wisconsin Central and its supporters contend that stock-based compensation is a valuable form of compensation that rewards employee work, the Government worries that excluding stock from the definition of “money” will promote circumvention of the RRTA tax through strategic structuring of employee compensation plans.

Questions as Framed for the Court by the Parties

Written by

Edited by

Additional Resources