Chase Manhattan Bank v. Finance Administration of City of New York

• Decision Date: 05 March 1979
• Docket Number: No. 77-1659,77-1659
• Citation: 99 S.Ct. 1201,440 U.S. 447,59 L.Ed.2d 445
• Parties: The CHASE MANHATTAN BANK, N. A. v. The FINANCE ADMINISTRATION OF the CITY OF NEW YORK et al
• Court: U.S. Supreme Court

440 U.S. 447

99 S.Ct. 1201

59 L.Ed.2d 445

The CHASE MANHATTAN BANK, N. A.

v The FINANCE ADMINISTRATION OF the CITY OF NEW YORK et al.

No. 77-1659.

March 5, 1979.

[Syllabus intentionally omitted]

PER CURIAM.

Petitioners are national banks that lease office space in New York City, where they maintain their principal places of business. After the city assessed them for its commercial rent and occupancy tax for the period June 1, 1970, through May 31, 1972, they brought the present action, arguing that their status as national banks rendered them immune from the tax. Petitioners relied on our cases that have held that national banks may not be taxed except as permitted by Congress. First Agricultural Bank v. State Tax Comm'n, 392 U.S. 339, 88 S.Ct. 2173, 20 L.Ed.2d 1138 (1968); McCulloch v. Maryland, 4 Wheat. 316, 436-437 (1819). The New York state courts upheld the assessments, finding the necessary congressional authorization in Pub.L. 91-156, 83 Stat. 434, as amended, 12 U.S.C. § 548 (1970 ed.).

Pub.L. 91-156, as amended by Pub.L. 92-213, § 4(a), 85 Stat. 775, provided that as of January 1, 1973, national banks were to be treated as state banks for the purposes of state tax laws. The Act also contained temporary provisions that enabled States to tax national banks on a more limited basis from its date of enactment, December 24, 1969, until January 1, 1973. Banks like petitioners with their principal offices in the taxing State, could be subjected to any nondiscriminatory tax generally applicable to state banks. A saving clause, however, prevented the imposition prior to January 1, 1973, of any tax in effect prior to the enactment of Pub.L. 91-156, unless such imposition was authorized by subsequent "affirmative action" of the state legislature. The saving-clause prohibition did not apply to "any tax on tangible personal property."

The New York Court of Appeals held that the disputed tax could be imposed on petitioners prior to January 1, 1973, because the affirmative-action requirement of the saving clause had been satisfied by an amendment of the commercial rent tax passed subsequent to Pub.L. 91-156 which increased the rate of the tax. 43 N.Y.2d 425, 401 N.Y.S.2d 1001, 372 N.E.2d 789. We dis- agree. Based on our study of the legislative history of Pub.L. 91-156, we are quite sure that the affirmative-action provision was designed to require the States, when imposing new taxes on national banks prior to January 1, 1973, to consider the impact of such taxes on the existing balance of taxation between national and state banks. On its face, a mere increase in the tax rate...