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U.S. Supreme Court

First National Bank of Boston v. Maine, 284 U.S. 312 (1932)

First National Bank of Boston v. Maine

No. 171

Argued December 10, 1931

Decided January 4, 1932

284 U.S. 312


1. Where a stockholder dies domiciled in a state other than that in which the corporation was created and has its property, the state of his domicile has power to tax the succession to the shares by will or inheritance, but the state of the corporation cannot do so.

2. A resident of Massachusetts died there owning shares in a Maine corporation, most of the property of which was in Maine. A Massachusetts tax was assessed and paid on legacies and distributive shares made up largely of the proceeds of the stock. A like tax was assessed in Maine, from which the amount of the Massachusetts tax was deducted. Held, that the tax by Maine was invalid under the due process clause of the Fourteenth Amendment. P. 284 U. S. 326 et seq.

3. A transfer from the dead to the living of any specific property is an event single in character, and is effected under the laws, and occurs within the limits, of a particular state, and it is unreasonable, and incompatible with a sound construction of the due process clause of the Fourteenth Amendment, to hold that jurisdiction to tax that event may be distributed among a number of states. P 284 U. S. 327.

4. The considerations that justify application of the maxim mobilia sequuntur personam to death transfer taxes imposed in respect of bonds, certificates of indebtedness, notes, credits, and bank deposits apply, with substantially the same force, in respect of shares of corporate stock. Id.

5. Ownership of shares by the stockholder and ownership of the capital by the corporation are not identical. The former is an individual interest giving the stockholder a right to a proportional part of the dividends and the effects of the corporation when dissolved, after payment of its debts. And this interest is an incorporeal property right which attaches to the person of the owner in the his domicile. P. 284 U. S. 330.

6. The fact that the property of the corporation is situated in another state affords no ground for the imposition by that a death tax upon the transfer of the stock; nor does the further fact of incorporation under the laws of that state. Id.

Page 284 U. S. 313

7. Power of state of incorporation to tax stock transfers and issue of new certificate distinguished. P. 284 U. S. 330.

8. The question whether shares of stock, as well as other intangibles, may be so used in a state other than that of the owner's domicile as to give them a situs there for tax purposes analogous to the actual situs of tangible property is not here presented. P. 284 U. S. 331.

130 Me. 123, 154 A. 103, reversed.

Appeal from a judgment sustaining a succession tax. An action in debt brought by the state to collect the tax was referred upon an agreed statement of facts to the Supreme Judicial Court.

Page 284 U. S. 320

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