Schuylkill Trust Co. v. Pennsylvania, 296 U.S. 113 (1935)
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Schuylkill Trust Co. v. Pennsylvania
No. 3
Argued October 14, 1935
Decided November 11, 1935
296 U.S. 113
APPEAL FROM THE SUPREME COURT OF PENNSYLVANIA
Syllabus
1. A corporation made liable in the first instance for a state tax on its shares, which it may pay from its funds or collect from the shareholders, but for which no lien is given either to the corporation or to the State, has a standing to contest the validity of the tax. P. 118.
2. Much weight attaches to the characterization of a state tax, or the interpretation of a state law, by the state supreme court, but where a federal question is involved, this Court must determine for itself the true nature of the tax by ascertaining its operation and effect. P. 119.
3. A Pennsylvania tax, levied in the first instance on a trust company and in terms a tax upon its shares, was measured by so much of the company’s net assets as remained after deducting the amounts represented by shares owned by it in Pennsylvania corporations which were already taxed or were exempted by the state law. No corresponding deduction was made on account of nontaxable bonds of the United States and of its instrumentalities, or on account of national bank shares already taxed as permitted by R.S., § 5219. Held invalid as discriminating against the federal securities and national bank shares. Pp. 119, 120.
4. Whether a federal question, urged to this Court on an appeal from the supreme Court of a state, was raised in that court is itself a federal question which this Court must decide by an examination of the record. P. 121.
315 Pa. 429, 173 A. 309, reversed.
Appeal from a judgment affirming a judgment for a tax entered by the Court of Common Pleas of Pennsylvania, 38 Dauphin Co.Rep. 22, upon an appeal from a tax assessment.