Constitutional Law: Federalism: Intergovernmental Immunities

• Intergovernmental Immunities

• State Taxation of Federal Government:
• RULE: Generally, federal government and agencies are immune from state taxation--- but state may tax federal contractors as long as the legal obligation to pay the tax does not fall on the federal government itself.
• EX: concession stand operated in a federal park within a state--- state may levy a tax.

• Federal Property Power (Article IV Sec. 3) – Congress has the power to dispose of and make all needful rules and regulations respecting territory or other property of the U.S.
• Applies to:
• (1) Wild animals roam on federal lands
• (2) Military ships/aviation
• (3) Indian Reservations
• (4) Federal buildings/enclaves

• Federal government regulation of the states: States are not immune from federal regulation.
• Federal government may tax proprietary state business = activity that can be carried on for a private citizen for profit.
• EX: NYS involved in business of bottling water--- may be taxed because it’s a proprietary activity.
• Federal government MAY NOT tax state governmental activity – activities which are unique to the state.
• i.e. public schools, state parks, state capitals.