Federal Land Bank of St. Paul v. Bismarck Lumber Co. (SCOTUS 1941)

Summary

Justice Murphy delivered the opinion of the Court reversing the Supreme Court of North Dakota. The Court held that § 26 of the Federal Farm Loan Act exempts federal land banks from North Dakota's sales tax on building materials purchased to repair and improve properties acquired through foreclosure. The statutory exemption broadly covers taxation, and the exception for real estate taxes does not encompass a tax on purchases of building materials. The Court also held that Congress may constitutionally immunize activities furthering federal land banks' lending functions because those banks are federal instrumentalities performing governmental functions. There were no separate opinions. Justice Jackson did not participate.

Holding

Whether the statutory tax exemption covers the sales tax on the bank's purchases of building materials.. Section 26 exempts the bank from the sales tax, which North Dakota law places on the purchaser; the real estate tax exception does not apply to purchases of building materials.

Whether Congress has constitutional authority to exempt activities incidental to federal land banks' lending functions from state taxation.. Congress may constitutionally immunize activities connected with or furthering federal land banks' lending functions from state taxation.

Federal Land Bank of St. Paul v. Bismarck Lumber Co.

Summary

Holding

Cited authorities

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