FRICK V. PENNSYLVANIA, 268 U. S. 473 (1925)

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U.S. Supreme Court

Frick v. Pennsylvania, 268 U.S. 473 (1925)

Frick v. Pennsylvania

Nos. 122-125

Argued December 7, 1923

Decided June 1, 1925

268 U.S. 473


1. A state statute attempting to tax the transfer of tangible personal property having an actual situs in other states transcends the power of the state so attempting and contravenes the due process clause of the Fourteenth Amendment. P. 268 U. S. 488.

2. The power to regulate the transmission, administration, and distribution of tangible personal property on the death of the owner rests with the its situs, the laws of other states having no bearing save as that state expressly or tacitly adopts them, and then their bearing is attributable to such adoption, and not to any force of their own. P. 268 U. S. 491.

3. A law of Pennsylvania (Act No. 258, Ls. of 1919, 521) provides that, where a person domiciled in the state dies seized and possessed of real or personal property, its transfer by will or intestate laws, whether the property be in that state or elsewhere, shall be taxed at specified percentages of the clear value of the property transferred, such value to be ascertained by deducting debts and expenses of administration from the gross value of the estate, but without making any deduction for taxes paid to the United States or any other state. Held: (1) That the law is not an escheat, but a tax, law. P. 268 U. S. 492. (2) That a tax so levied was void insofar as based on transfer of decedent's tangible personal property in New York and Massachusetts, where

Page 268 U. S. 474

ancillary letters were granted, the property administered, and transfer taxes imposed and collected. P. 268 U. S. 496.

4. A state, being without power to tax directly the transfer of tangible personal property in another state, cannot accomplish the same thing indirectly by taking the whole of the decedent's estate, including that foreign property, as the basis for measuring the tax on the transfer of that part of the estate which lies within its jurisdiction. Maxwell v. Bugbee, 250 U. S. 525, and Plummer v. Coler, 178 U. S. 115, distinguished. P. 268 U. S. 494.

5. The state which created a corporation has power to tax the transfer of its stock on death of a stockholder, and to enforce the tax by means practically making the state a lienor in possession, irrespective of the decedent's domicil and the actual situs of the stock certificates. P. 268 U. S. 497.

6. This power being superior to the jurisdiction over the stock of another state in which the decedent stockholder resided, the tax imposed by the the corporation must be paid before the stock can be brought into administration in the his domicil, and a statute of the domiciliary state (Penna. Ls.1919, 521, supra) which does not allow the value paid out of his estate for this purpose to be deducted in computing the domiciliary transfer tax in effect taxes what is not within the state's jurisdiction, and violates the due process clause of the Fourteenth Amendment. Id.

7. The federal "estate" tax and the Pennsylvania "transfer" tax both are imposed as excises on the transfer of property from a decedent, and both take effect at the instant of transfer, so that neither has priority in time over the other. P. 268 U. S. 498.

8. The taxing power of federal and state governments is generally so far concurrent as to render it admissible for both to tax the same subject at the same time. P. 268 U. S. 499.

9. Neither the United States nor the state, in determining the amounts of its transfer tax, is under any constitutional obligation to make any deduction on account of the tax of the other. Whether, if the estate were insufficient to pay both, the United States should be preferred is not here involved. P. 268 U. S. 500.

277 Pa. 242 reversed.

Error to judgments of the Supreme Court of Pennsylvania sustaining taxes assessed under the state transfer tax law. Petitions for writs of certiorari in these cases are denied.

Page 268 U. S. 486

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