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§ 458. “Impose any Tax on Property .. Belonging to the Commonwealth.”

The immunity of Commonwealth property from taxation by the States is secured by this section. A State may not impose any tax on property of any kind belonging to the Commonwealth without its consent given through the agency of the Federal Parliament. The property of the Commonwealth will include all revenues derived from taxation (sec. 51—ii.); money borrowed on the credit of the Commonwealth (sec. 51—iv.); land, places, buildings, and chattels acquired by the Commonwealth from the States, or from private individuals (sec. 51—xxxi.); such railways as may be taken over by the Commonwealth from the States (sec. 51—xxxii.); such railways as may be constructed or extended by the Commonwealth for the States (sec. 51—xxxiii.); revenue derived from fines, penalties, fees, and forfeitures imposed by Federal laws (sec. 53); departmental buildings and property which will be transferred to the Commonwealth by the States, such as post and telegraph buildings and materials, military and naval works, fortifications, equipments, war materials, war vessels, &c., light-house and light-ships, beacons and buoys, and quarantine stations (sec. 69); and property of any kind used in connection with departments taken over (sec. 85—i.).

Under the Constitution of the United States, which contains no express inhibition like this, it has been held that the States cannot tax the property and lawful agencies and instrumentalities of the Federal Government, no matter in whose hands they may be found. McCulloch v. Maryland, 4 Wheat. 316; Dobbins v. Commissioners of Erie County, 16 Pet. 435; Bank Tax Cases, 3 Wall. 573; Compare Leprohon v. City of Ottawa, 2 Ont. App. 522.)

A stock of the United States which constitutes the whole or a part of the capital stock of a State bank is not subject to State taxation. Such taxation would be a tax upon the exercise of the powers conferred upon Congress. If such power were recognized in the States it might be carried to such extent as to, in effect, destroy this power in Congress. (The People of New York v. Commissioners of Taxes, 2 Wall. 200. Baker, Annot. Const. 17.)

Securities of the United States are exempt from State taxation, and this immunity extends to the capital stock of a corporation if made up of such public funds. (Provident Inst. v. Massachusetts, 6 Wall. 611; National Bank v. Kentucky, 9 Wall. 353. Id. 18.)

United States certificates of indebtedness issued by the general Government directly to creditors are subject to taxation by the States. (The Banks v. Mayor, 7 Wall. 16. Id.)

Where the capital of a bank is invested in Government bonds it cannot be taxed by the States. But the shares of stock may be taxed as such in hands of stockholders. And held that the revenue law of Kentucky which imposes a tax on bank stock, and requires the officers of the bank to pay the tax so levied on the shares of stock, is a tax on the stockholders and not on the capital of the bank, and is valid. (National Bank v. Kentucky, 9 Wall. 353; Lionberger v. Rouse, 9 Wall. 468. Id. 19.)

United States securities are not subject to taxation by States. (Society for Savings v. Coite, 6 Wall. 594; Weston v. Charleston, 2 Pet. 449; McCulloch v. Maryland, 4 Wheat. 316; Osborn v. United States Bank, 9 Wheat. 738. Id.)




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