McCulloch v. Maryland

Case brief summary

Facts

Congress created a national bank and the bank opened a branch in Maryland. Maryland passed a law taxing any bank operating in the state that was not chartered by Maryland, and the bank's cashier, McCulloch, refused to pay this tax.

Procedural history

Maryland sued McCulloch in state court to collect the tax penalty and won. The Maryland Court of Appeals, the state's highest court, upheld that decision, and McCulloch asked the United States Supreme Court to review the case.

Issue

The Court had to decide whether Congress had the constitutional power to create a national bank, and if so, whether a state could tax a federal institution like that bank's branch operating within its borders?

Holding

The Court ruled that Congress did have the power to create the bank, and that Maryland could not tax the federal bank's branch.

Reasoning

Congress can create institutions like a bank because it has the power to make laws necessary for carrying out its duties. States cannot tax federal institutions because taxing power can destroy them.

Opinions

Majority (Marshall): Congress may use any appropriate, constitutional means to carry out its powers, including chartering a bank, and states cannot tax that federal institution.