Federalism and Intergovernmental Tax Immunity Now Rest in Peace: South Carolina v. Baker

Abstract

INTRODUCTION|Recently, the United States Supreme Court decided the case of South Carolina v. Baker. The State of South Carolina raised a constitutional challenge to a provision of the Internal Revenue Code of 1954 (the "Code"). The provision requires that the debt obligation of states, local governments and their instrumentalities be issued in full registered form (as opposed to bearer form) for the interest on such obligations to be exempt from federal income taxation.|The Court's holding that the federal income tax provision offended neither the tenth amendment nor the doctrine of intergovernmental tax immunity laid to rest one of the last vestiges of federalism. The purpose of this Note is to analyze and determine the propriety of the Court's holding by reviewing judicial precedent and congressional legislative history...