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U.S. Supreme Court

Tradesmens Nat'l Bank v. Oklahoma Tax Comm'n, 309 U.S. 560 (1940)

Tradesmens National Bank of Oklahoma v.

Oklahoma Tax Commission

No. 596

Submitted March 6, 1940

Decided March 25, 1940

309 U.S. 560


1. Congress constitutionally may authorize state taxation of the franchises of national banking associations. P. 309 U. S. 564.

2. R.S. § 5219, as amended March 25, 1926, authorizes state taxation of national banking associations -- in addition to other methods theretofore authorized -- "according to or measured by their net income," including "the entire net income received from all sources," subject only to certain restrictions as to the rate. As amended in 1935, an Oklahoma statute imposing on such associations a tax measured by net income, contained a provision expressly including in gross income (from which the net income was computed) interest from tax exempt federal securities, which theretofore had been expressly excluded. Held, a tax under the Oklahoma statute the measure of which included dividends on federal reserve bank stock and interest on tax-exempt federal securities, was authorized by R.S. § 5219, and valid. P. 309 U. S. 565.

3. That the Oklahoma statute, in provisions for computing taxes on net income of corporations other than national banking associations, expressly excludes interest from tax-exempt federal securities does not render it violative of the restriction in R.S. § 5219 that "the rate shall not be higher than . . . the highest of the rates . . . assessed upon mercantile, manufacturing, and business corporations doing business" within the State, where, considering the State's tax structure as a whole, no discrimination against national banking associations results. P. 309 U. S. 567.

That a few individual corporations, out of a class of several thousand which ordinarily bear the same or a heavier tax burden, may sustain a lighter tax than that imposed on national banking associations is not proof of discrimination.

4. The restrictions placed by R.S. § 5219 on the permitted methods of taxation are directed at systems of state taxation which, in practical operation, discriminate against national banking associations or their shareholders as a class. P. 309 U. S. 567.

185 Okla. 656, 95 P.2d 121, affirmed. chanroblesvirtualawlibrary

Page 309 U. S. 561

Appeal from the affirmance of a judgment denying recovery of taxes alleged to have been illegally exacted.

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