![]() in which the Court defeated collection of a transfer tax by the domiciliary state by treating coins and bank notes deposited by a decedent in a safe deposit box in another state as tangible property. On the other hand, the mere ownership by a foreign corporation of property in a nondomiciliary state was held insufficient to support a tax by that state on the succession to shares of stock in that corporation owned by a nonresident decedent. 434 (1914) wherein it was held that the presence of a negotiable instrument was sufficient to confer jurisdiction upon the State seeking to tax its transfer. 4 Footnote Levy of an inheritance tax by a nondomiciliary state was also sustained on similar grounds in Wheeler v. It took cognizance of the fact that the state in which these intangibles had their situs had also taxed the trust. The Court reasoned that such reserved powers were the equivalent to a fee in the property. the domiciliary state of the creator of a trust was held competent to levy an inheritance tax on an out-of-state trust fund consisting of stocks, bonds, and notes, as the settlor reserved the right to control disposition and to direct payment of income for life. However, this holding was overruled in Graves v. One of the reasons assigned for this result was that by the law of Massachusetts the property involved was treated as passing from the original donor to the appointee. 567 (1926), in which North Carolina was prevented from taxing the exercise of a power of appointment through a will executed therein by a resident, when the property was a trust fund in Massachusetts created by the will of a resident of the latter state. A decision rendered in 1926 which is seemingly in conflict was Wachovia Bank & Trust Co. Until 1930, transfer taxes upon intangibles by either the domiciliary or the situs (but nondomiciliary) state, were with rare exceptions approved. ![]() In the case of intangibles, however, the Court has oscillated in upholding, then rejecting, and again sustaining the levy by more than one state ,of death taxes upon intangibles. which precludes imposition of transfer taxes upon tangible which are permanently located or have an actual situs outside the state. ![]() 174, 185 (1942), however, Justice Jackson, in dissent, asserted that a reconsideration of this principle had become timely. The rule was subsequently reiterated in 1925 in Frick v. ![]() But whatever may be the justification of their power to levy such taxes, since 1905 the states have consistently found themselves restricted by the rule in Union Transit Co. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States nor shall any State deprive any person of life, liberty, or property, without due process of law nor deny to any person within its jurisdiction the equal protection of the laws.Īs a state has authority to regulate transfer of property by wills or inheritance, it may base its succession taxes upon either the transmission or receipt of property by will or by descent. Amdt14.S1.7.2.5 Transfer (Inheritance, Estate, Gift) TaxesĪll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. ![]()
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