The people of all the states have created the general government, and have conferred upon it the general power of taxation. The people of all the states, and the states themselves, are represented in Congress, and, by their representatives, exercise this power. When they tax the chartered institutions of the states, they tax their constituents; and these taxes must be uniform. But, when a state taxes the operations of the government of the United States, it acts upon institutions created, not by their own constituents, but by people over whom they claim no control.
The Maryland legislature passed an act imposing a tax on all banks and its branches within the State of Maryland. A cashier at the Bank of the United States, a bank incorporated n pursuance of the Constitution, issued notes that were not issued on stamped paper in the manner prescribed by the state act. The State of Maryland brought suit to recover penalties under the act. The county court found for the State, and the Court of Appeals of the State of Maryland affirmed the county’s decision. The case was elevated on appeal to the Supreme Court of the United States.
Is an act passed by the legislature of Maryland, imposing a tax on the Bank of the United States, constitutional?
The Court held that the tax imposed by Maryland was unconstitutional because the state had no power to burden the operations of the constitutional laws enacted by Congress. States have no power, by taxation, or otherwise, to retard, impede, burden, or in any manner control the operations of the constitutional laws enacted by Congress, to carry into effect the powers vested in the national government. Lastly, state governments have no right to tax any of the constitutional means employed by the government of the Union to execute its constitutional powers