CHAPTER 4—TAXATION

SUBCHAPTER I—FEDERAL RESERVE BANKS

SUBCHAPTER II—NATIONAL BANK CIRCULATION

SUBCHAPTER III—NATIONAL BANK SHARES

SUBCHAPTER IV—STATE BANK CIRCULATION

SUBCHAPTER I—FEDERAL RESERVE BANKS

¹ So in original. Probably should not be capitalized.

§531. Exemption from taxation

Federal reserve banks, including the capital stock and surplus therein and the income derived therefrom, shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

(Dec. 23, 1913, ch. 6, §7(c), 38 Stat. 258; Mar. 3, 1919, ch. 101, §1, 40 Stat. 1314; Aug. 10, 1993, Pub. L. 103–66, title III, §3002(c)(2), 107 Stat. 338.)

Codification

Section is comprised of subsec. (c) [formerly third undesignated par.] of section 7 of act Dec. 23, 1913. Subsecs. (a) and (b) of section 7 are classified to sections 289 and 290, respectively, of this title.

Amendments

1993—Pub. L. 103–66 inserted section catchline.

Cross References

United States obligations and evidences of ownership as subject to Federal taxation, see section 3124 of Title 31, Money and Finance.

Section Referred to in Other Sections

This section is referred to in title 26 section 137.

SUBCHAPTER II—NATIONAL BANK CIRCULATION

§541. Tax on circulating notes generally

In lieu of all existing taxes, every association shall pay to the Treasurer of the United States, in the months of January and July, a duty of one-half of 1 per centum each half year upon the average amount of its notes in circulation.

(R.S. §5214; Mar. 3, 1883, ch. 121, §1, 22 Stat. 488.)

Codification

R.S. §5214 derived from act June 3, 1864, ch. 106, §41, 13 Stat. 111, which was part of the National Bank Act. See section 38 of this title.

§542. Omitted

Codification

Section, act Mar. 14, 1900, ch. 41, §13, 31 Stat. 49, related to tax on circulating notes secured by 2 per centum bonds.

§543. Repealed. Pub. L. 97–258, §5(b), Sept. 13, 1982, 96 Stat. 1068

Section, act Dec. 21, 1905, ch. 3, §1, 34 Stat. 5, related to tax on circulating notes secured by Panama Canal 2 per centum bonds and rights and privileges of such bonds.

§§544 to 547. Omitted

Codification

Section 544, R.S. §5215; act Mar. 3, 1883, ch. 121, §1, 22 Stat. 488, related to half-yearly return of circulation.

Section 545, R.S. §5216; act Mar. 3, 1883, ch. 121, §1, 22 Stat. 488, related to penalty for failure to make return.

Section 546, R.S. §5217, related to enforcing tax on circulation.

Section 547, R.S. §5218; act June 10, 1921, ch. 18, §304, 42 Stat. 24, related to refunding excess tax.

Repeals

Effective July 1, 1935, the permanent appropriation provided for in former section 547 of this title was repealed by act June 26, 1934, ch. 756, §2, 48 Stat. 1226, such act authorizing in lieu thereof, an annual appropriation from the general fund of the Treasury.

Redemption of Bonds; Termination of Circulating Notes

In a communication from the Treasury Department dated February 17, 1941, it was stated “The Secretary of the Treasury called for redemption the only outstanding issues of United States bonds bearing the circulation privilege as follows:

“2% Consols. of 1930, as of July 1, 1935,

“2% Panama Canal bonds of 1916–36, and

“2% Panama Canal bonds of 1918–38, as of August 1, 1935.

“The retirement of these issues automatically put an end to National Bank note circulation and the collection of the tax thereon.”

SUBCHAPTER III—NATIONAL BANK SHARES

§548. State taxation

For the purposes of any tax law enacted under authority of the United States or any State, a national bank shall be treated as a bank organized and existing under the laws of the State or other jurisdiction within which its principal office is located.

(R.S. §5219; Mar. 4, 1923, ch. 267, 42 Stat. 1499; Mar. 25, 1926, ch. 88, 44 Stat. 223; Dec. 24, 1969, Pub. L. 91–156, §§1(a), 2(a), 83 Stat. 434.)

Codification

R.S. §5219 derived from act June 3, 1864, ch. 106, §41, 13 Stat. 111, which was the National Bank Act, and act Feb. 10, 1868, ch. 7, 15 Stat. 34. See section 38 of this title.

Amendments

1969—Pub. L. 91–156, §2(a), substituted provisions directing that national banks, for purposes of both Federal and State tax laws, be treated as banks organized and existing under the laws of the State or other jurisdiction within which each bank's principal office is located for provisions placing restrictions on the taxation of national bank shares and, for the period until the effective date of such amendment, set out interim provisions regarding intangible personal property taxes of States and local governments on national banks.

Pub. L. 91–156, §1(a), added par. 5.

1926—Act Mar. 25, 1926, among other changes inserted “on their net income” in cl. (3) of former opening par., and added cl. (4) thereto, and inserted proviso in former subsec. 1(c).

Effective Date of 1969 Amendment

Section 1(b) of Pub. L. 91–156 provided that: “The amendment made by subsection (a) of this section [setting out interim provisions regarding intangible personal property taxes of State and local governments on national banks] shall be effective from the date of enactment of this Act [Dec. 24, 1969] until the effective date [Jan. 1, 1973] of the amendment made by section 2(a) of this Act [removing restrictions on the taxation of national bank shares and directing that national banks, for purposes of both Federal and State tax laws, be treated as banks organized and existing under the laws of the State or other jurisdiction within which each bank's principal office is located].”

Section 2(b) of Pub. L. 91–156, as amended by Pub. L. 92–213, §4(a), Dec. 22, 1971, 85 Stat. 775, provided that: “The amendment made by subsection (a) [removing all special restriction on the taxation of national bank shares by State and local taxing authorities] becomes effective on January 1, 1973”.

Savings Provision

Section 3 of Pub. L. 91–156, as amended by Pub. L. 92–213, §4(a), Dec. 22, 1971, 85 Stat. 775, provided that:

“(a) Except as provided in subsection (b) of this section, prior to January 1, 1973, no tax may be imposed on any class of banks by or under authority of any State legislation in effect prior to the enactment of this Act [Dec. 24, 1969] unless

“(1) the tax was imposed on that class of banks prior to the enactment of this Act [Dec. 24, 1969], or

“(2) the imposition of the tax is authorized by affirmative action of the State legislature after the enactment of this Act [Dec. 24, 1969].

“(b) The prohibition of subsection (a) of this section does not apply to

“(1) any sales tax or use tax complementary thereto,

“(2) any tax (including a documentary stamp tax) on the execution, delivery, or recordation of documents, or

“(3) any tax on tangible personal property (not including cash or currency), or for any license, registration, transfer, excise or other fee or tax imposed on the ownership, use or transfer of tangible personal property,

imposed by a State which does not impose a tax, or an increased rate of tax, in lieu thereof.”

State Taxation of Federally Insured Financial Institutions; Study and Report by Advisory Commission on Intergovernmental Relations

Pub. L. 93–100, §7, Aug. 16, 1973, 87 Stat. 347, eff. on the 30th day after Aug. 16, 1973, as amended by Pub. L. 93–495, title I, §114, Oct. 28, 1974, 88 Stat. 1507; Pub. L. 94–222, §§1, 4, Feb. 27, 1976, 90 Stat. 197, 198, eff. Jan. 1, 1976, provided that it was to be cited as the “State Taxation of Depositories Act”; that it was applicable to taxable years or periods beginning on or after Aug. 16, 1973; that an efficient banking system and the free flow of commerce would be furthered by clarification of principles as to State taxation of interstate transactions of banks and other depositories; that taxes measured by income or receipts or other “doing business” taxes in states where depositories do not have their principal offices, should be deferred until uniform and equitable methods are developed; that no such taxes should be imposed on or after Aug. 16, 1973 and before Sept. 12, 1976; that “insured depository” means any bank or institution insured under the Federal Deposit Insurance Act or the Federal Savings and Loan Insurance Corporation or any member institution of a Federal home loan bank; that “State” means the several States of the United States, the District of Columbia, the Virgin Islands, Guam, and American Samoa; and that the Advisory Commission on Intergovernmental Relations should study the matter of State “doing business” taxes and report to Congress no later than Dec. 31, 1974.

Study by Board of Governors of Federal Reserve System; Report by June 22, 1972

Section 4(b) of Pub. L. 92–213 required the Board of Governors of the Federal Reserve System to make a study of the probable impact on the revenues of State and local governments of the extension until Jan. 1, 1973, under subsection (a), of the termination date of interim provisions regarding intangible personal property taxes of State and local governments on national banks and to report the results of its study to the Congress not later than six months after Dec. 22, 1971.

Study by Board of Governors of Federal Reserve System; Report by Dec. 31, 1970

Section 4 of Pub. L. 91–156 provided that the Board of Governors of the Federal Reserve System make a study to determine the probable impact on the banking system and other economic effects of the changes in existing law made by section 2 of this Act [amending this section] and that such study include the Board's recommendation as to what additional Federal legislation may be needed to reconcile the promotion of economic efficiency in the banking system with the achievement of effectiveness and local autonomy in meeting the fiscal needs of the States and their political subdivisions. The results of the Board's study were to be made to Congress not later than December 31, 1970.

Cross References

Capital, stock and stockholders of national banking associations, generally, see section 51 et seq. of this title.

Dividends paid by national banking association, see section 51b et seq. of this title.

Exemption from taxation:

Federal credit unions, see section 1768 of this title.

Federal Deposit Insurance Corporation, see section 1825 of this title.

Federal Home Loan Banks, see section 1433 of this title.

Federal National Mortgage Association, see section 1723a of this title.

Federal Reserve Banks, see section 531 of this title.

Federal savings associations, see section 1464 of this title.

Section Referred to in Other Sections

This section is referred to in section 932 of this title.

SUBCHAPTER IV—STATE BANK CIRCULATION

§§561 to 570. Omitted

Repeals

Provisions of these sections were incorporated in Title 26, Internal Revenue Code, as follows:

Insofar as they related exclusively to internal revenue they were repealed by section 4(a) of enacting section of 1939 Internal Revenue Code, preceding subtitle A of Title 26, I.R.C. 1939.