Witney v. State Tax Commission of New York, 309 U.S. 530 (1940)

Witney v. State Tax Commission of New York

No. 541

Argued February 28, 29, 1940
Decided March 25, 1940
309 U.S. 530

APPEAL FROM THE SURROGATE’S COURT OF NEW YORK

Syllabus

A statute of New York, amending the 1930 estate tax law, operates to require inclusion in the gross estate of the decedent, for the purpose of computing the estate tax, of property in respect of which the decedent exercised after 1930 by will a nongeneral power of appointment created prior to that year. The statute reaches such transfers under powers of appointment as, under the previous statute, escaped taxation.

Held:

1. The inclusion in the gross estate of a decedent of property never owned by her but appointed by her will under a limited power which could not be exercised in favor of the decedent, her creditors, or her estate did not deny due process to those who inherited the decedent’s property, even though, because the tax rate was progressive, the net amount they inherited from her was less than it would have been if the appointed property had not been included in the gross estate. P. 540.

2. Considering the history and purpose of the statute, the facts that it applies only to special powers of appointment created prior to 1930 and exercised thereafter, and that other special powers are taxed in the estate of the donor, rather than that of the donee, does not render it violative of the equal protection clause of the Fourteenth Amendment. Binney v. Long, 299 U.S. 280, distinguished. P. 541.

281 N.Y. 297, 22 N.E.2d 379, affirmed.

Appeal from the affirmance of a judgment sustaining the constitutionality of a New York estate tax.