Court Cases Cited Within This Web Site
Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1895)
Pollock v. Farmers’ Loan and Trust Co., 158 U.S. 601 (1895)
 

This was a case filed by Charles Pollock, on behalf of himself and all other stockholders of the Farmers’ Loan and Trust Company, specifically regarding taxes paid on the income generated by the stock owned, and whether such a tax was a direct or indirect tax.

If the tax was considered a direct tax, then the rule of apportionment governed. The tax was being collected without that rule, but the stockholders felt that such a tax was a direct tax since the stock was considered property.

The tax was being collected as an “income tax” under authority of the federal Revenue Act of 1894.

This case was the first time the Court directly addressed the question of whether income derived from property was a direct or indirect tax. There are many questions the Court did not answer, but the Court agreed that taxes on real estate or rents or income of real estate were direct taxes.

The Court also agreed that taxes on personal property or income derived from personal property were also direct taxes. The Court then ruled that part of the Revenue Act was therefore unconstitutional, and thus rendered the whole Act void.

The decision did not render all income taxes as unconstitutional, nor did the Court rule that income taxes were direct taxes. The response of the Court was narrowly defined around the Revenue Act of 1894. Nonetheless, this case was the foundational case which prompted the alleged ratification of the Sixteenth Amendment.

Full text: Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1895), Pollock v. Farmers’ Loan and Trust Co., 158 U.S. 601 (1895)