Chase Manhattan Bank v. Finance Adm’r, 440 U.S. 447 (1979)

ON PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF NEW YORK

Syllabus

Petitioners, national banks that lease offices and maintain their principal places of business in New York City, brought the present action after the city had assessed them for its commercial rent and occupancy tax for the period June 1, 1970, through May 31, 1972. The New York Court of Appeals held that the tax could be imposed pursuant to Pub.L. 91156, as amended, which provided that, as of January 1, 1973, national banks were to be treated as state banks for the purposes of state tax laws, and which 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. 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.

Held:

1. The disputed tax could not be imposed on petitioners prior to January 1, 1973, because the affirmative action requirement of the saving clause was not satisfied by a mere rate increase in the city’s commercial rent tax passed subsequent to Pub.L. 91-156. 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, and nothing in the legislative history of the rate increase suggests that Pub.L. 91-156 was given the slightest attention.

2. The city’s commercial rent and occupancy tax is not a tax on "tangible personal property" within the meaning of the provisions of Pub.L. 91-156 that render the saving clause prohibition inapplicable to such a tax. The question is one of federal law; and, for the purposes of Pub.L. 91-156, Congress did not consider real estate occupancy taxes to be taxes on tangible personal property.

Certiorari granted; 43 N.Y.2d 425, 372 N.E.2d 789, reversed.