Judge Strikes Down Tax on National Banks
A landmark injunction prevents King County from collecting discriminatory taxes from the city's national banks.
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In a ruling that effectively renders the taxation of national banks in this district illegal, Judge Hanford granted a permanent injunction restraining the collection of taxes on the Boston National Bank, the Seattle National Bank, the Puget Sound National Bank, and the National Bank of Commerce. The banks argued that the county discriminated between national banks and private citizens or other institutions. Judge Hanford agreed that the tax assessment was illegal if the banks could prove that national bank stock was being taxed at a higher valuation than other moneyed capital in the hands of individual citizens. The county must now file an answer to the complaint.
“The assessor and equalizing boards of the county and state renders the tax levied upon national bank stock illegal.”
This ruling highlights a century-old tension in Seattle regarding tax equity and the special status afforded to banking institutions. Similar debates about who pays their fair share of taxes continue to define modern municipal policy in King County.
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