Case Name: Loren D. and Renetta J. KEYS v. VERMONT DEPARTMENT OF TAXES
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1987-12-24
Citations: 149 Vt. 658
Docket Number: No. 85-531
Parties: Loren D. and Renetta J. KEYS v. VERMONT DEPARTMENT OF TAXES
Judges: 
Reporter: Vermont Reports
Volume: 149
Pages: 658–658

Head Matter:
Loren D. and Renetta J. KEYS v. VERMONT DEPARTMENT OF TAXES
[ 552 A.2d 418]
No. 85-531
December 24, 1987.

Opinion:
The State stipulates that the lump sum payment received by the taxpayer represents income derived from his investment in a retirement fund which invests solely in federal obligations. The prospectus for the retirement plan containing the fund shows that the taxpayer elected to invest in that fund as one of five options and that his selection was made to ensure that, once placed in the fund, the money he invested could only be invested in federal obligations. Interest earned by the taxpayer on that investment must be characterized as income derived from federal obligations and as exempt from state taxation by 31 U.S.C. § 3124(a). See American Bank & Trust Co. v. Dallas County, 463 U.S. 855, 862-63 (1983). The State's attempts to characterize the income otherwise are unavailing. See In re Sawyer Estate, 149 Vt. 541, 544, 546 A.2d 784, 785-86 (1987).
Affirmed.