Board of Commissioners of Montgomery County v. Federal Housing Finance Agency
758 F.3d 706
6th Cir.2014Background
- Ohio counties sue Fannie Mae, Freddie Mac, and FHFA for unpaid Ohio real property transfer taxes under state law.
- Enterprises claim federal charters exempt them from all state and local taxation, including transfer taxes, except real property taxes.
- Real property transfer tax here is an excise tax on the transfer of property, not a tax on the property itself.
- District court dismissed, relying on the Michigan transfer tax precedent and rational basis for exemption in the Commerce Clause context.
- Court analyzes whether the statutory exemptions are valid under real-property tax carve-out and Commerce Clause authority; ultimately affirms dismissal.
- Conservatorship status of FHFA and statutory exemptions under 12 U.S.C. provisions underpin analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer taxes fall within the real property tax carve-out. | Oakland County dicta suggests transfer taxes are not within the real property exception. | Transfer taxes are excise taxes, not real property taxes, and thus not barred by exemptions. | Transfer tax is an excise tax not within the real property exception; exemptions apply. |
| Whether Congress had Commerce Clause power to enact transfer tax exemptions. | Exemptions undermine state sovereignty and tax authority. | Exemptions regulate a national, interstate mortgage market and are within Congress's Commerce Clause power. | Yes; exemptions are valid under the Commerce Clause and supersede state tax laws. |
| Whether strict scrutiny or state-rights protections apply to federal tax exemptions. | Exemptions implicate states' police powers and tax sovereignty; strict scrutiny should apply. | Strict scrutiny not warranted for congressional exemptions regulating interstate commerce. | Strict scrutiny not applied; exemptions constitutional under Commerce Clause. |
Key Cases Cited
- County of Oakland v. Fed. Hous. Fin. Agency, 716 F.3d 935 (6th Cir. 2013) (transfer tax deemed excise, not real property tax; real property carve-out not satisfied.)
- Delaware County, Pa. v. Fed. Hous. Fin. Agency, 747 F.3d 215 (3d Cir. 2014) (transfer taxes are excise taxes and not within real property exemption; Commerce Clause analysis affirmed.)
- Montgomery Cnty., Md. v. Fed. Nat’l Mortg. Ass’n, 740 F.3d 914 (4th Cir. 2014) (transfer taxes not real property taxes; exemptions constitutional under Commerce Clause.)
- DeKalb Cnty. v. Fed. Hous. Fin. Agency, 741 F.3d 795 (7th Cir. 2013) (Exemption proper to regulate nationwide mortgage market; Commerce Clause authority.)
- United States v. Lopez, 514 U.S. 549 (U.S. 1995) (setting standard for Commerce Clause consideration in federal legislation.)
- First Agric. Nat’l Bank of Berkshire Cnty. v. State Tax Comm’n, 392 U.S. 339 (U.S. 1968) (Congressional limits on state taxation of national banks; context for federal immunity.)
- United States v. New Mexico, 455 U.S. 720 (U.S. 1982) (Commerce Clause power to immunize beyond narrow constitutional limits.)