State & Local Taxation of Federal Employees

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Do federal employees of the U.S. government who live in States and cities that levy income taxes, have to pay State and/or local tax on their federal salaries?

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Yes,

Why would you think they didn't?

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State & Local Taxation of Federal Employees
paradox-
Thank you.

In 1819 the Supreme Court of the United States decided McCulloch v. Maryland establishing the freedom of the federal government from State taxation.

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It's not the government that's being taxed; it's the employees, who are also citizens of their respective states.

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Re: State & Local Taxation of Federal Employees

gollum wrote:

paradox-
Thank you.

In 1819 the Supreme Court of the United States decided McCulloch v. Maryland establishing the freedom of the federal government from State taxation.

In 1819 there was no income tax so McColloch wouldn't apply to any income taxes. You can't make a case from almost 200 years ago apply today until you, 1. make sure no cases overturned McColloch, 2. make sure the circumstances are the same as McColloch.

But then when I did a search for McCulloch it seems it is not even close to being about the taxation of federal employees. http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=17&invol=316

The ruling still gives the state of Maryland the right to tax the property of the Federal Bank. It only says that Maryland can't tax the bank of the US differently simply because it isn't incorporated in Maryland which was the crux of the case.

Quote:

This opinion does not deprive the states of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the state. But this is a tax on the operations of the bank, and is, consequently, a tax on the operation of an instrument employed by the government [17 U.S. 316, 437] of the Union to carry its powers into execution. Such a tax must be unconstitutional.

McCullogh is also interesting because it states the Federal government has the constitutional authority to establish a National Bank.

Quote:

After the most deliberate consideration, it is the unanimous and decided opinion of this court, that the act to incorporate the Bank of the United States is a law made in pursuance of the constitution, and is a part of the supreme law of the land.

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State & Local Taxation of Federal Property
paradox-
Thank you.

So could a State (or a city) levy a real estate tax on a building within its borders owned by the U.S. government (e.g., a federal court, an office of the Social Security administration) in the same amount that it would if the building were owned by a private party?

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Gollum - No, there are MANY non profits that don't pay property or personal property taxes on the buildings or contents - churches are the biggest group, charitable non-profit headquarters, and yes, government buildings would all be exempt. But the employees are all paying the same taxes you do. (Execption may be the postal service employees)

If you want to interesting reading, spend some time inestigating the benefits that churches and charities get in this country. Kind of explains why there are more churches than bars in the good ole USA!

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State & Local Taxation of U.S. Government
SULLYFISH66-
Thank you.

I think the reason that the property of non-profit corporations is tax-exempt in most or all of the 50 States, is the State legislatures have excluded them from taxation by statute. I think the public policy purpose is that these organizations supposedly do good for society, though I think it is open to question. Also with respect to property owned by religious corporations (e.g., churches), I think the State/cities are trying to avoid entanglements with freedom of religion per the first Amendment.

As far as I know, a State or locality could tax a non-profit corporation if it chose to. In fact, I understand some jurisdictions are now charging some non-profit corporations "fees" in lieu of taxes. A tax by any other name.

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State & Local Taxation of Federal Employees

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