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After the State denied appellant's request for refunds, he filed suit in the Michigan Court of Claims, alleging that the State's inconsistent treatment of retirement benefits violated 4 U.S.C. § 111, which authorizes States to tax.
Facts of the case. Paul Davis, a resident of Michigan, worked for the federal government and upon retirement received benefits. Michigan law exempts state retirement benefits from state taxes. Smith unsuccessfully petitioned for a refund on the state taxes he paid on his federal retirement benefits. He then filed suit in the Michigan Court of ...
Michigan Department of Treasury, 489 U.S. 803 (1989), is a case in the Supreme Court of the United States holding that states may not tax federal pensions if they exempt their own state pensions from taxation. [1]
Case Year: 1989. Case Ruling: 8-1, Reversed and Remanded. Opinion Justice: Kennedy. FACTS. Michigan's revenue code provided that retirement benefits paid to individuals by the state or any of its political subdivisions were exempt from state income taxes.
U.S. Reports: Davis v. Michigan Dept of Treasury, 489 U.S. 803 (1989). Names Kennedy, Anthony M. (Judge) Supreme Court of the United States (Author) Created / Published
The treasury department denied Davis’s petition. Davis appealed in state court, arguing that Michigan’s state income tax violated 4 U.S.C. § 111 and the doctrine of intergovernmental tax immunity by discriminating against federal employees.
In 1984, Mr. Davis petitioned the State of Michigan for a refund of the state taxes he had paid on his retirement benefits since 1979.12 After his request was denied, he sued the state treasury for a refund in the Michigan Court of Claims arguing that federal retirement benefits were not legally taxable under the Mich 409 8.0.1500(1989).
