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RFC V. BEAVER COUNTY, 328 U. S. 204 (1946)

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U.S. Supreme Court

RFC v. Beaver County, 328 U.S. 204 (1946)

Reconstruction Finance Corporation v. Beaver County

No. 40

Argued April 30, 1946

Decided May 13, 1946

328 U.S. 204

Syllabus

By § 10 of the Reconstruction Finance Corporation Act, Congress forbade States and local governments to tax personal property of the RFC or its subsidiaries, but provided that their "real property" shall be subject to state and local taxation "to the same extent according to its value as other real property is taxed." An RFC subsidiary acquired certain land in Pennsylvania, erected buildings thereon, and equipped them with machinery and attachments necessary for a manufacturing plant. Most of the machinery was heavy, not attached to the buildings, and was held in place by its own weight. Other portions were attached by easily removable screws and bolts. Some of the equipment could be moved from place to place in the plant. The plant was leased to a manufacturer of war equipment under a contract providing that the machinery should "remain personalty notwithstanding the fact it may be affixed or attached to realty." The Supreme Court of Pennsylvania sustained the imposition of a tax by a county on the machinery, holding that it was real estate under a long established rule in Pennsylvania applying to all essential machinery of a manufacturing plant.

Held:

1. The tax is sustained. P. 328 U. S. 210.

2. The interpretation of Pennsylvania's tax law by its Supreme Court is binding on this Court. P. 328 U. S. 208. chanroblesvirtualawlibrary

Page 328 U. S. 205

3. Pennsylvania's definition of "real property" cannot govern if it conflicts with the scope of that term as used in the federal statute. P. 328 U. S. 208.

4. By permitting local taxation of the real property, Congress made it impossible to apply the federal legislation with uniform consequences in each State and locality. P. 328 U. S. 209.

5. The application of a local rule as to what is "real property" for tax purposes would not impair the congressional program for the production of war materials any more than the action of Congress in leaving the fixing of rates of taxation to local communities. Pp. 328 U. S. 209-210.

6. The congressional purpose can best be accomplished by the application of settled state rules as to what constitutes "real property," so long as they do not effect a discrimination against the Government or run counter to the terms of the Act. P. 328 U. S. 210.

7. Any other course would create the kind of confusion and resulting hampering of local tax machinery which Congress did not intend when it sought to integrate its permission to tax with local tax assessment and collection machinery. P. 328 U. S. 210.

350 Pa. 520, 39 A.2d 713, affirmed.

Appeal from a decision of the Supreme Court of Pennsylvania, 350 Pa. 520, 39 A.2d 713, sustaining a tax on machinery of a manufacturing plant owned by the Defense Plant Corporation, a subsidiary of the RFC. Affirmed, p. 328 U. S. 210. chanroblesvirtualawlibrary

Page 328 U. S. 206





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