Justice SUTHERLAND (Supreme Court of the United States) delivered the
opinion of the Court:
Second. Is the United States a resident within the meaning of the words
'residents, corporate or otherwise?' We think it is. It many times has been
held that the United States or a state is a 'person' within the meaning of
statutory provisions applying only to persons. See Ohio v. Helvering, 292
U.S. 360, 370, and cases cited. In Martin v. State, 24 Tex. 61, 68, this
was held in respect of a criminal statute, notwithstanding the general rule
that such statutes are to be construed strictly. The statute (Laws Tex.
1848, c. 152, s 33) there penalized the false making or fraudulent
alteration of a public record when done 'with intent that any person be
defrauded.' The state Supreme Court held that the state was to be taken as
a 'person' within the meaning of the statute, and one who made the entry
with intent to defraud the state violated the statute. The Texas decision
was expressly followed by this court in Stanley v. Schwalby, 147 U.S. 508,
517, where it was held that the word 'person' used in the statute there
under consideration would include the United States 'as a body politic and
corporate.' Blackstone, writing on the rights of persons (1 Blackstone 123)
says: 'Persons also are divided by the law into either natural persons, or
artificial. Natural persons are such as the God of nature formed us;
artificial are such as are created and devised by human laws for the
purposes of society and government, which are called corporations or bodies
politic.' While it cannot be said that the United States, in its corporate
capacity as an artificial person, [Super emphasis added. ] has a bodily
presence in any place, it is not unreasonable to hold that in the eye of
the law it has a residence, [Demand to know where it is located: Washington
"D.C.", and where its boundaries are prescribed in Law? ] and especially so
when a contrary holding would defeat the evident purpose of a statute. This
may be in the nature of a legal fiction; but legal fictions have an
appropriate place in the administration of the law when they are required
by the demands of convenience [Fraud. ] and justice. Thus, intangible
personal property has been held to have a situs at the domicile of the
owner, although intangibles ordinarily have no actual situs and the paper
evidence of their existence may be elsewhere. [The paper evidence of our
immovable property (land and home) is fraudulently pretended to be in their
outside the Constitution venue. ] First National Bank v. Maine, 284 U.S.
312, 328. If to carry out the purposes of a statute it be admissible to
construe the word 'person' as including the United States, it is hard to
see why, in like circumstances, it is inadmissible to construe the word
'resident' as likewise including the United States. [***]
As, for example, it did in the Act of March 3, 1919, s 4, c. 100, 40 Stat.
1309, 1311 (31 USCA s 750).
In the foregoing discussion, we have not been unmindful of the rule,
frequently stated by this court, that taxing acts 'are not to be extended
by implication beyond the clear import of the language used,' and that
doubts are to be resolved against the government and in favor of the
taxpayer. The rule is a salutary one, but it does not apply here. The
intention of the lawmaker controls in the construction of taxing acts as it
does in the construction of other statutes, and that intention is to be
ascertained, not by taking the word or clause in question from its setting
and viewing it apart, but by considering it in connection with the context,
the general purposes of the statute in which it is found, the occasion and
circumstances of its use, and other appropriate tests for the ascertainment
of the legislative will. Compare Rein v. Lane, L.R. 2 Q.B. Cases 144, 151.
The intention being thus disclosed, it is enough that the word or clause is
reasonably susceptible of a meaning consonant therewith, whatever might be
its meaning in another and different connection. We are not at liberty to
reject the meaning so established and adopt another lying outside the
intention of the Legislature [our artificial creature ] simply because the
latter would release the taxpayer or bear less heavily against him. To do
so would be not to resolve a doubt in his favor, but to say that the
statute does not mean what it means. [Mean no more than what the mere
artificial creature intends to say. ]
'The rule of strict construction is not violated by permitting the words
of a statute to have their full meaning, or the more extended of two
meanings. The words are not to be bent one way or the other, but to be
taken in the sense which will best manifest the legislative intent...
United States v. Hartwell, 6 Wall. 385, 396; United States v. Corbett, 215
U.S. 233, 242.' Sacramento Nav. Co. v. Salz, 273 U.S. 326, 329. HELVERING
(Com.Int.Rev.) v. STOCKHOLMS ENSIKILDA BANK, 293 U.S. 84 (1934)
TANG, Senior Circuit Judge (United States Court of Appeals, Ninth Circuit):
In the Insular Cases the Supreme Court decided that the territorial scope
of the phrase "the United States" as used in the Constitution is limited to
the states of the Union. [***]
In arriving at this conclusion, the Court compared the language of the
revenue clause ("all duties ... shall be uniform throughout the United
States") with that of the Thirteenth Amendment (prohibiting slavery "within
the United States, or in any place subject to their jurisdiction") and the
Fourteenth Amendment (extending citizenship to those born "in the United
States, and subject to the jurisdiction thereof"). Id. At 251 (emphasis
added). The Court emphasized that the language of the Thirteenth Amendment
demonstrates that "there may be places within the jurisdiction of the
United States that are no part of the Union." Id. [Emphasis added. ] In
comparison, the Fourteenth Amendment has "a limitation to persons born or
naturalized in the United States which is not extended to persons born in
any place 'subject to their jurisdiction.' " Id. (emphasis added). Like the
revenue clauses, the Citizenship Clause has an express territorial
limitation which prevents its extension to every place over which the
government exercises its sovereignty. Cf. United States v.
Verdugo-Urquidez, 494 U.S. 259, 291 (1990) (Brennan, dissenting)
(distinguishing Downes holding regarding the revenue clauses, because the
Fourth Amendment [judicial Court "Warrant."] "contains no express
territorial limitations").
The Downes Court further stated: "[I]n dealing with foreign
sovereignties, the term 'United States' has a broader meaning than when
used in the Constitution, and includes all territories subject to the
jurisdiction of the Federal government, wherever located." Downes, 182 U.S.
at 263. In other words, as used in the Constitution, the term "United
States" does not include all territories subject to the jurisdiction of the
United States government. See also Examining Board of Engineers,
Architects and Surveyors v. Flores de Otero, 426 U.S. 572, 588 (1976),
citing H.R.Rep. No. 249, 56th Cong., 1st Sess., 16 (1900) ("upon reason and
authority the term 'United States' as used in the Constitution, has
reference only to the States that constitute the Federal Union and does not
include the Territories.")
It is thus incorrect to extend citizenship to persons living in
United States territories simply because the territories are "subject to
the jurisdiction" or "within the dominion" of the United States, because
those persons are not born "in the United States" within the meaning of the
Fourteenth Amendment. [***]
We hasten to add that if the plaintiffs were entitled to citizenship under
the Fourteenth Amendment, this would not conflict with Congress'
constitutional power to regulate naturalization, as urged by the
government. The power to confer citizenship through naturalization does
not confer the power to take citizenship away. See Wong Kim Ark, 169 U.S.
at 703 (Congress has no authority to restrict the effect of citizenship by
birth); Afroyim v. Rusk, 387 U.S. 253, 257 (1967) (same) [***]
Focusing upon the phrases "within the territory" and "within the
dominions," the dissent concludes that persons born in territories of the
United States are born "in the United States." As previously discussed, the
Supreme Court has already interpreted the territorial scope of the phrase
"the United States" as used in the Constitution as limited to the states of
the Union. RABANG v. I.N.S., 35 F.3d 1449 (1992)
COMPTON, Justice (Supreme Court of Alaska): "That all lawful power derives
from the people and must be held in check to preserve their freedom is the
oldest and most central tenet of American constitutionalism." Luedtke v.
Nabors Alaska Drilling, 768 P.2d 1123 (1989)
Justice DAVIS (Supreme Court of the United States) delivered the opinion of
the court:
No graver question was ever considered by this court, nor one which more
nearly concerns the rights of the whole people; for it is the birthright
of every American citizen when charged with crime, to be tried and punished
according to law. The power of punishment is, alone through the means which
the laws have provided for that purpose, and if they are ineffectual, there
is an immunity from punishment, no matter how great an offender the
individual may be, or how much his crimes may have shocked the sense of
justice of the country, or endangered its safety. By the protection of the
law human rights are secured; withdraw that protection, and they are at the
mercy of wicked rulers, or the clamor of an excited people. EX PARTE
MILLIGAN, 71 U.S. 2 (1866)
Chief Justice MARSHALL (supreme Court of the United States) delivered the
opinion of the Court:
In reasoning on the argument that the power of taxation was not confined to
the people and property of a state, but might be exercised on every object
brought within its jurisdiction, this court admitted the truth of the
proposition; and added, that 'the power was an incident of sovereignty, and
was co-extensive with that to which it was an incident. All powers, the
court said, over which the sovereign power of a state extends, are subjects
of taxation. The sovereignty of a state extends to every thing which exists
by its own authority, or is introduced by its permission; but does it
extend to those means which are employed by congress to carry into
execution powers conferred on that body by the people of the United States?
We think not. PROVIDENCE BANK v. PITTMAN, 29 U.S. 514 (1830)
Chief Justice WARREN (Supreme Court of the United States) delivered the
opinion of the Court:
Of course, the Government can collect the tax from a District Court suitor
by exercising its power of distraint--if he does not split his cause of
action--but we cannot believe that compelling resort to this extraordinary
procedure is either wise or in accord with congressional intent. Our
system of taxation is based upon VOLUNTARY assessment and payment, not upon
distraint. See Helvering v. Mitchell, 303 U.S. 391, 399; {See}Treas. Regs.
on Procedural Rules (1954 Code) s 601.103(a). FLORA v. UNITED STATES of
America, 362 U.S. 145 (1960)
EUGENE A. WRIGHT, Circuit Judge (9th Circuit Court of Appeals):
"Tax liability is a condition precedent to the demand. Merely demanding
payment, even repeatedly, does not cause liability. For the condition
precedent of liability to be met, there must be a lawful assessment, either
a VOLUNTARY one by the taxpayer or one procedurally proper by the IRS.
Because this country's income tax system is based on VOLUNTARY
self-assessment, rather than distraint, Flora v. United States, 362 U.S.
145, 176 (1960) the Service may assess the tax only in certain
circumstances and in conformity with proper procedures." Bothke v. Terry,
713 F.2d 1405, 1414 (1983).
Justice PITNEY (Supreme Court of the United States) delivered the opinion
of the Court:
In order, therefore, that the clauses cited from article 1 of the
Constitution may have proper force and effect, save only as modified by the
amendment, and that the latter also may have proper effect, it becomes
essential to distinguish between what is and what is not 'income,' as the
term is there used, and to apply the distinction, as cases arise, according
to truth and substance, without regard to form. Congress cannot by any
definition it may adopt conclude the matter, since it cannot by legislation
alter the Constitution, from which alone it derives its power to legislate,
and within whose limitations alone that power can be lawfully exercised.
The fundamental relation of 'capital' to 'income' has been much discussed
by economists, the former [capital] being likened to the tree or the land,
the latter [income] to the fruit or the crop; the former [capital] depicted
as a reservoir supplied from springs, the latter [income] as the outlet
stream, to be measured by its flow during a period of time. For the present
purpose we require only a clear definition of the term 'income,' as used in
common speech, in order to determine its meaning in the amendment, and,
having formed also a correct judgment as to the nature of a stock dividend,
we shall find it easy to decide the matter at issue.
After examining dictionaries in common use (Bouv. L.D.; Standard
Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to
the succinct definition adopted in two cases arising under the Corporation
Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U. S. 399, 415;
Doyle v. Mitchell Bros. Co., 247 U. S. 179, 185, 'Income may be defined as
the gain derived from capital, from labor, or from both combined,' provided
it be understood to include profit gained through a sale or conversion of
capital assets, to which it was applied in the Doyle Case, 247 U. S. 183,
185.
Brief as it is, it indicates the characteristic and distinguishing
attribute of income essential for a correct solution of the present
controversy. The government, although basing its argument upon the
definition as quoted, placed chief emphasis upon the word 'gain,' which was
extended to include a variety of meanings; while the significance of the
next three words was either overlooked or misconceived.
'Derived--from--capital'; 'the gain--derived--from--capital,' etc. Here we
have the essential matter: not a gain accruing to capital; not a growth or
increment of value in the investment; but a gain, a profit, something of
exchangeable value, proceeding from the property, severed from the capital,
however invested or employed, and coming in, being 'derived'--that is,
received or drawn by the recipient (the taxpayer) for his separate use,
benefit and disposal--that is income derived from property. Nothing else
answers the description. EISNER v. MACOMBER, 252 U.S. 189 (1920)
Government, in prosecution for failure to file federal income tax returns,
was required to show that defendant was required to file a return, that he
did not do so, and that his failure to file was willful and was not
required to prove that defendant owed government any tax. U.S. v. Gorman,
C.A.7 (Ill.) 1968, 393 F.2d 209.
MERCHANDISE: All commodities which merchants usually buy and sell, whether
wholesale or retail; wares are commodities such as are ordinarily the
objects of trade and commerce. But the term is never understood as
including real estate, and is rarely applied to provisions such as are
purchased day by day, or to such other articles as are required for
immediate consumption. Passaic Mfg. Co. v. Hoffman, 3 N.Y. 512; Hein v.
O’Oconner, Tex.App., 15 S.W. 414; Elliot Swartwout, 10 Pet. 137; Smith v.
Boyer, 119 S.C. 176. (Black’s Law Dictionary 4th Ed. p. 1138.)
ENGLAND, Justice (Supreme Court of Florida):
In resolving these diametrically opposed theories of intergovernmental
finance, we have concluded that the State must prevail. Precedent and logic
both dictate that the sovereign's general freedom from taxation derives
from an 'immunity', not from an 'exemption'. [***]
The doctrine of sovereign tax immunity is also well-established in
the jurisprudence of other jurisdictions having a similar constitutional
scheme of government. E.g., Kern-Limerick Inc. v. Scurlock, 347 U.S. 110
(1954); Newton v. Atlanta, 189 Ga. 441 (1939); Tempe v. Arizona Board of
Regents, 11 Ariz.App. 24 (1970); Hellerstein, State and Local Taxation
649--94 (3d Ed.1969). DICKINSON, Jr. etc. et al v. CITY OF TALLAHASSEE, 325
So.2d 1 (1975)
Justice SUTHERLAND (Supreme Court of the United States) delivered the
opinion of the Court:
But in statutes levying taxes the literal meaning of the words employed is
most important for such statutes are not to be extended by implication
beyond the clear import of the language used. If the words are doubtful,
the doubt must be resolved against the government and in favor of the
taxpayer. Gould v. Gould, 245 U. S. 151. The rule is stated by Lord Cairns
in Partington v. Attorney General, L. R. 4 H. L. 100, 122: 'I am not at all
sure that in a case of this kind--a fiscal case--form is not amply
sufficient; because, as I understand the principle of all fiscal
legislation, it is this: If the person sought to be taxed comes within the
letter of the law, he must be taxed, however great the hardship may appear
to the judicial mind to be. On the other hand, if the crown, seeking to
recover the tax, cannot bring the subject within the letter of the law, the
subject is free, however apparently within the spirit of the law the case
might otherwise appear to be. In other words, if there be admissible in any
statute what is called an equitable construction, certainly such a
construction is not admissible in a taxing statute, where you can simply
adhere to the words of the statute.' And see Eidman v. Martinez, 184 U. S.
578, 583. UNITED STATES v. MERRIAM, 263 U.S. 179 (1923)
Justice Harlan (Supreme Court of the United States) delivered the opinion
of the court:
Judge Gray, dissenting, said: 'Keeping in mind the well-settled rule that
the citizen is exempt from taxation unless the same is imposed by clear and
unequivocal language, and that where the construction of a tax law is
doubtful, the doubt is to be resolved in favor of those upon whom the tax
is sought to be laid, I cannot assent to the affirmance of the judgment of
the court below in this respect. I do not think that the income derived
from such investment of funds is in any proper sense receipts in the
business of sugar refining. The very term 'gross receipts' in 'the
business,' would seem to exclude all such receipts as the interest upon
investments here referred to.' SPRECKLES SUGAR REF. CO. v. McCLAIN, 192
U.S. 397 (1904)
Justice GINSBURG (Supreme Court of the United States) delivered the opinion
of the Court:
From the statute's use of the term "taxpayer," rather than "person who paid
the tax," the Government concludes that only a "taxpayer" may file for
administrative relief under ß 7422, and thereafter pursue a refund action
under 28 U.S.C. ß 1346(a)(1). Then, to show that Williams is not a
"taxpayer," the Government relies on 26 6 U.S.C. ß 7701(a)(14), which
defines "taxpayer" as "any person subject to any internal revenue tax."
According to the Government, a party who pays a tax is not "subject to" it
unless she is the one assessed. UNITED STATES v. WILLIAMS, 514 U.S. 527
(1995)
The Attorney General:
On the principle involved in the maxim, 'expressio unius est exclusio
alterius,' each of these restrictions adds strength to the conclusion that
there are no other restrictions unexpressed. 'As exception strengthens the
force of a law in cases not excepted, so, according to Lord Bacon,
enumeration weakens it in cases not enumerated.' [***]
In the construction of a statute, we must endeavor to give a definite
meaning to every word and expression found therein. The fair and natural
import of the terms employed is to govern in construing the law, and where
a clear intelligible meaning can be gathered from those terms, we are not
to look beyond them to fancy some unexpressed intent. [***]
What we have been contending for is, that in the construction of this
statute the court should confine itself to the language of the law. The
principle which has been sanctioned by this court justifies us in insisting
upon such a rule. In the case of the Paulina's Cargo v. the United States,
7 Cranch, 60, Chief Justice Marshall says: 'In construing these laws, it
has been truly stated to be the duty of the court to effect the intention
of the Legislature. But this intention is to be searched for in the words
which the Legislature has employed to convey it.' And again, in the United
States v. Fisher, 2 Cranch, 390: 'Where rights are infringed, where
fundamental principles are overthrown, where the general principle of the
law is departed from, the legislative intention must be expressed with
irresistible clearness to induce a court of justice to suppose a design to
effect such objects. [***] Mr. Justice CATRON delivered the opinion of the
court. THE DUBUQUE & PACIFIC R.R. CO. v. LITCHFIELD, 64 U.S. 66 (1859)
MATTHEWS, J. (Supreme Court of the United States):
Speaking of them in the License Tax Cases, 5 Wall. 462, 471, Chief Justice
CHASE said: 'The granting of a license, therefore, must be regarded as
nothing more than a mere form of imposing a tax,' etc., and that 'this
construction is warranted by the practice of the government from its
organization. *** They were regarded merely as a convenient mode of
imposing taxes on several descriptions of business, and of ascertaining the
parties from whom such taxes were to be collected. *** But, as we have
already said, these licenses give no authority. They are mere receipts for
taxes.' ROYALL v. STATE OF VIRGINIA, 116 U.S. 572 (1886)
Justice McREYNOLDS (Supreme Court of the United States) delivered the
opinion of the Court:
In the interpretation of statutes levying taxes it is the established rule
not to extend their provisions, by implication, beyond the clear import of
the language used, or to enlarge their operations so as to embrace matters
not specifically pointed out. In case of doubt they are construed most
strongly against the government, and in favor of the citizen. United States
v. Wigglesworth, 2 Story, 369, Fed. Cas. No. 16,690; American Net & Twine
Co. v. Worthington, 141 U. S. 468, 474; Benziger v. United States, 192 U.
S. 38, 55. GOULD v. GOULD, 245 U.S. 151 (1917)
