Source: https://supreme.justia.com/cases/federal/us/167/461/
Timestamp: 2019-04-19 08:21:25+00:00

Document:
The decision of the Supreme Court of Pennsylvania that the Act of June 8, 1891, in respect of the taxation of national banks does not conflict with the Constitution of that state is conclusive in this Court.
There is no lack of uniformity of taxation under that act which renders it obnoxious to that part of the Fourteenth Amendment to the federal Constitution which forbids a state to "deny to any person within its jurisdiction the equal protection of the laws," as the right of election which, if not availed of by all, may produce an inequality, is offered to all.
That act treats state banks and national banks alike, gives to each the same privileges, and there is no discrimination against national banks as such.
The making the national bank the agent of the state to collect such taxes is a mere matter of procedure, and there is no discrimination against the national banks in the fact that the state banks are not so compelled, but the auditor general looks to the stockholders directly.
The statute, by fixing the time when the bank shall make its report, and directing the auditor general to hear any stockholder who may desire to be heard, provides "due process of law" in these respects.
from local taxation under the laws of this Commonwealth."
"SEC. 7. That from and after the passage of this act, every national bank located within this commonwealth which shall fail to elect to collect annually from the shareholders thereof a tax of eight mills on the dollar upon the par value of all the shares of said bank that have been subscribed or issued, shall, on or before the twentieth day of June in each and every year, make to the auditor general a report in writing, verified by the oath or affirmation of the president or cashier, setting forth the full number of shares of the capital stock issued by such national bank, and the actual value thereof, whereupon it shall be the duty of the auditor general to assess the same for taxation at the same rate as that imposed upon other moneyed capital in the hands of individual citizens of this state -- that is to say at the rate of four mills upon each dollar of the actual value thereof."
The validity of this statute is challenged by plaintiff in error on three grounds. The first is that its operation results in a lack of uniformity of taxation upon the same class of subjects, to-wit, shares of national banks within the state, and the argument of counsel is that it conflicts with Article 9, § 1, of the Constitution of the State of Pennsylvania, which requires that "all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax."
Railroad, 125 U. S. 555; Bell's Gap Railroad v. Pennsylvania, 134 U. S. 232; Lewis v. Monson, 151 U. S. 545; Adams Express Co. v. Ohio, 165 U. S. 194; Long Island Water Supply Co. v. City of Brooklyn, 166 U. S. 685.
If it be said that a lack of uniformity renders the statute obnoxious to that part of the Fourteenth Amendment to the federal Constitution which forbids a state to "deny to any person within its jurisdiction the equal protection of the laws," it becomes important to see in what consists the lack of uniformity. It is not in the terms or conditions expressed in the statute, but only in the possible results of its operation. Upon all bank shares, whether state or national, rests the ordinary state tax of four mills. To every bank, state and national, and all alike, is given the privilege of discharging all tax obligations by collecting from its stockholders and paying eight mills on the dollar upon the par value of the stock. If a bank has a large surplus, and its stock is in consequence worth five or six times its par value, naturally it elects to collect and pay the eight mills, and thus in fact it pays at a less rate on the actual value of its property than the bank without surplus, and whose stock is only worth par. So it is possible, under the operation of this law, that one bank may pay at a less rate upon the actual value of its banking property than another, but the banks which do not make this election, whether state or national, pay no more than the regular tax. The result of the election, under the circumstances, is simply that those electing pay less. But this lack of uniformity in the result furnishes no ground of complaint under the federal Constitution. Suppose, for any fair reason affecting only its internal affairs, the state should see fit to wholly exempt certain named corporations from all taxation. Of course the indirect result would be that all other property might have to pay a little larger rate percent in order to raise the revenue necessary for the carrying on of the state government, but this would not invalidate the tax on other property, or give any right to challenge the law as obnoxious to the provisions of the federal Constitution.
"The argument is that inequality of burden establishes the unconstitutionality of the law under which the tax is levied. If the validity of our tax laws depends upon their ability to stand successfully this test, there are none of them that can stand."
the states whose object is to secure equality of taxation, and which are usually accompanied with qualifications deemed material; but it would render nugatory those discriminations which the best interests of society require, which are necessary for the encouragement of needed and useful industries, and the discouragement of intemperance and vice, and which every state, in one form or another, deems it expedient to adopt."
See also Jannings v. Coal Ridge Improvement Co., 147 U. S. 147.
"that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state, and that the shares of any national banking association owned by nonresidents of any state shall be taxed in the city or town where the bank is located, and not elsewhere."
The purpose of this, as often announced in this Court, is to prevent any discrimination between national bank capital and other moneyed capital. Aberdeen Bank v. Chehalis County, 166 U. S. 440, and cases cited in opinion. But this section does not forbid discrimination between national banks, but only as between such banks and state banks, or other moneyed capital in the hands of private individuals. The legislation before us treats state banks and national banks alike, gives to each the same privileges, and there is no discrimination against national banks as such.
whereupon it shall be the duty of the auditor general to assess the same for taxation,"
"it shall be his further duty to hear any stockholder who may desire to be heard on the question of the valuation of the shares as aforesaid, and he shall have the right, by other evidence, to satisfy himself as to the correctness of the valuation of said shares of stock in said report contained, and to correct said valuation. The auditor general shall thereupon transmit to the said national banks a statement of the valuation and assessment so made by him, and the amount of tax due the commonwealth on all of said shares, which tax the said banks shall, within thirty days after receiving said statement, collect from their shareholders and pay over into the state treasury."
That the state has the right to make the bank its agent to collect the tax from the individual stockholders was settled in National Bank v. Commonwealth, 9 Wall. 353.
It is further urged that there is discrimination because, as to those state banks that do not elect to pay the eight mills, the auditor general is required to look to the stockholders directly for the regular four mills tax, whereas as to national banks he reaches the stockholders through the bank itself, and hence it is said that some shareholders in state banks may escape taxation. But this is a mere matter of procedure. It is no objection to the law that it makes the national bank the agent to collect, and does not compel the state bank to do the same.
"The law in prescribing the time when such complaints will be heard gives all the notice required, and the proceeding by which the valuation is determined, though it may be followed, if the tax be not paid, by a sale of the delinquent's property, is due process of law."
See also Bell's Gap Railroad v. Pennsylvania, supra; Spencer v. Merchant, 125 U. S. 345; Palmer v. McMahon, 133 U. S. 660, 133 U. S. 669; Lent v. Tillson, 140 U. S. 316; Paulsen v. Portland, 149 U. S. 30.
MR. JUSTICE SHIRAS did not hear the argument or take part in the decision of this case.

References: § 1
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.