Overview
Case summary
This case involves a challenge to a New York inheritance tax assessed on personal property bequeathed by will to the United States. The testator, William W. Merriam, died in 1889, leaving his estate to the U.S. government. The Surrogate’s Court assessed a tax of $3964.23, affirmed by state appellate courts. The U.S. Supreme Court considered two issues: (1) whether a state has the power to tax bequests to the federal government, and (2) whether the United States is exempt as a corporation under New York law. The Court held that the tax is permissible as it is imposed on the right to transmit property by will, not on the property itself, and thus does not tax U.S. property. It also held that the exemption in New York law applies only to certain domestic corporations, not to the United States. The judgment affirming the tax was affirmed.
Abstract
A challenge was brought against a state inheritance tax assessed on personal property bequeathed by will to the federal government. The court held that the tax is valid because it is imposed on the right to transmit property by will rather than on the property itself, and the federal government does not qualify as an exempt domestic corporation under state law. The judgment affirming the tax was upheld.
Opinion of the court
opinionMr. Justice Brownjoined by Majority of the Court
- Tax is on transmission right, not property
- State may condition testamentary disposition
- Exemption limited to specific domestic corporations
- United States not exempt as governmental corporation
Dissenting opinions
1Jurisdiction
not challenged- Case involves a federal question regarding state taxation of bequests to the United States
Procedural posture
- Whether state can tax bequests to the United States
- Whether United States is a corporation exempt from taxation under state law
Subsequent history
Legal categories
Case record
Issues & holdings
de novo
Tax is on transmission right, not property; state may condition testamentary disposition
Issue preserved for review
de novo
Exemption applies only to domestic corporations of religious, educational, charitable, or reformatory purpose, not to governmental corporation like United States
Issue preserved for review
Holdings of the court
Statutory interpretation
1Burden of proof
Standards of review
- Power of State to tax bequests to United States — de novo Legal question of state power and statutory interpretation reviewed de novo
- Exemption of United States as corporation under state law — de novo Statutory interpretation and application reviewed de novo
Timeline
Procedural path
William W. Merriam, a resident of Suffolk County, New York, died leaving a will bequeathing all his estate to the United States government
Outcome: Death of testator
Initiates the inheritance and tax assessment process
Inheritance tax of $3964.23 assessed on the personal property bequeathed to the United States
Outcome: Tax assessed
Tax assessment occurred after 1892 act took effect, raising applicability issues
Final judgment entered against the United States after Court of Appeals affirmed and remanded
Outcome: Judgment against United States
Final state court decision prompting writ of error to U.S. Supreme Court
Case submitted to Supreme Court of the United States
Outcome: Submitted for decision
Initiates federal appellate review
Supreme Court decision affirming state court judgment
Outcome: Affirmed
Final disposition upholding state inheritance tax on bequest to United States
Facts & evidence
Incident
Key facts
5 facts- William W. Merriam, a resident of Suffolk County, died on January 30, 1889
- He left a will bequeathing all his estate to the United States government
- An inheritance tax of $3964.23 was assessed on the personal property bequeathed
- The tax was assessed on February 16, 1893, after the 1892 act took effect
- The Surrogate’s Court fixed the tax, affirmed by the Supreme Court and Court of Appeals of New York
Disputed questions
- Applicability of 1892 act versus previous acts
- Whether tax is on property or on transmission right
Procedural history
6 steps- Merriam died January 30, 1889
- Tax assessed February 16, 1893
- Surrogate’s Court order assessing tax
- Appeal to General Term of Supreme Court affirmed order
- Appeal to Court of Appeals affirmed and remanded for final judgment entered March 31, 1894
- Writ of error to Supreme Court of the United States
Evidence in the record
- Will of William W. Merriam bequeathing estate to United States
- Last will and testament
- New York tax statutes (Laws of 1885, 1891, 1892)
- Appraiser's report
- Court orders
Objects of relevance
Policy considerations
- State interest in regulating testamentary dispositions
- Public revenue from inheritance taxes
- Balance between state sovereignty and federal interests
Authorities
Cited authorities (5)
Related cases (6)
Statutes
- Chapter 483, Laws of 1885 (New York)
- Chapter 215, Laws of 1891 (New York)
- Chapter 399, Laws of 1892 (New York)
Standards & doctrines
- De novo review for legal questions
- Political-process doctrine not applicable
Legal principles applied
- Right to dispose of property by will is statutory and subject to state conditions
- Tax on transmission is not tax on property itself
Notable quotes
“the so called inheritance tax of the State of New York is in reality a limitation upon the power of a testator to bequeath his property to whom he pleases; a declaration that, in the exercise of that power, he shall contribute a certain percentage to the public use”Mr. Justice Brown — Explaining nature of inheritance tax as condition on testamentary rightKey rationale for upholding tax on bequests to United States
“the tax is not upon the property, in the ordinary sense of the term, but upon the right to dispose of it”Mr. Justice Brown — Distinguishing tax on transmission from tax on propertyBasis for rejecting argument that tax is on U.S. property