McCulloch v. Maryland pg. 119 4 Wheat (17 U.S.) 316; 4L.Ed. 579 (1819)
The facts of the case are these: The Maryland Legislature in 1818 imposed a tax on all banks not chartered by the state of Maryland. It imposed an annual fee of $15,000 payable in advance of a two-percent tax on the value of the notes issued by such banks. It also imposed a $500 penalty for each violation of this tax measure, which was squarely aimed at the Bank of the Unites States in Baltimore Maryland. McCulloch, the cashier at the Baltimore branch of the Bank of the United States refused to comply with the state law. A lower court judgment was against McCulloch and was upheld by the Maryland Court of Appeals.
The main issues in this case are these: Does Congress, have the power to incorporate a bank? Does the state of Maryland, without violating the Constitution have the right to tax than branch?
The decision of the court was made by a unanimous 7 to 0 decision. Does Congress, have the right to incorporate a bank? Yes, the Court finds that the act of incorporating a bank of the United States is a law made in pursuance of the Constitution and is a part of the Supreme Law of the Land. Does the State of Maryland, without violating the Constitution have the right to tax that branch? No, the Court finds that the State of Maryland doesn’t have the right to tax the operations of the bank; however the court did not deprive the states of the right to tax the real property, or impose taxes on the interest held by Maryland citizens, but the tax on operation is unconstitutional.
The Court found that because the United States was granted under the Constitution the right to pass laws for the operations of the Government, that the incorporation of a bank for the purposes of financial operations of the Government were constitutionally allowed. The Court also found that since the State of Maryland was attempting to disrupt through taxes the operation of the Government (Federal) which the states are subordinate to, that the taxes on operations were unconstitutional and voided by law…
The Court ruled unanimously therefore there were no dissenting opinions.
The case did two things, 1. It levied more power to Congress, while taking some from the State… The Court affirmed that the incorporation of a bank for government operations were well within the scope of Constitutional authority. 2. It cemented the fact that the Federal Congress was superior to the State Congress, and therefore affirmed that the States have no right to tax the operations of the federal government whether the federal government is operating in their state or not…