Clement National Bank v. Vermont

Citations

• 231 U.S. 120
• 34 S. Ct. 31
• 58 L. Ed. 147
• 1913 U.S. LEXIS 2599

Syllabus

<p>A tax upon deposits in a national bank to be paid by the depositors held in this case not to be a tax upon the franchise of the bank.</p> <p>An interpretation by the state court of a state statute is controlling on this court; and this court determines whether the statute as so delimited conflicts with Federal law.</p> <p>The National Bank Act does not withdraw credits of depositors in national banks from the taxing power of the State.</p> <p>Under its broad powers of classification for taxation, a State may classify depositors in national banks so long as the tax is not essentially inimical to such banks in frustrating the purpose of the legislation or impairing their efficiency as Federal agencies.</p> <p>The object of § 5219, Rev. Stat., is to prevent hostile discrimination against national banks; and a state tax to be in conflict therewith must constitute such a discrimination.</p> <p>A provision in a statute permitting a bank to .stipulate with the State to pay the taxes on deposits and thereby relieve its depositors from making returns does not place the bank under duress.</p> <p>This court finds no basis for the charge of injurious discrimination against national banks in § 815 of Chapter 37 of the Public Statutes of Vermont.</p> <p>While a national bank can only transact such business as the Federal statutes permit, it may, under its incidental powers, make reasonable business agreements in regard to its deposits including the payment of state taxes thereon pursuant to the laws of the State in which it is located. Such an agreement is not ultra vires.</p> <p>A State may provide for garnishment or trustee process to collect a . valid tax and may constitute a bank its agent to collect the tax from its depositors.</p> <p>A state tax on interest-bearing deposits in national banks does not deny equal protection of the law on account of exemptions which . it is within the power of the State to allow or on account of the exemption of non-interest-bearing account