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Thursday, March 28, 2024

Order Granting Oakland County’s Motion for Summary Judgment Against Fannie/Freddie FHFA RE Transfer Taxes on Deeds

Courtesy of ZeroHedge. View original post here.

Submitted by 4closureFraud.

OAKLAND COUNTY, ET AL.,

Plaintiffs,

vs

FEDERAL HOUSING FINANCE AGENCY

AS CONSERVATOR FOR FEDERAL

NATIONAL MORTGAGE ASSOCIATION AND

FEDERAL HOME LOAN MORTGAGE COMPANY;

FEDERAL NATIONAL MORTGAGE ASSOCIATION;

AND FEDERAL HOME LOAN MORTGAGE COMPANY,

Defendants.

________________________________/

ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND

DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Excerpts

D. An Exemption from All Taxation Covers Only Direct Taxes, Not Excise Taxes

Plaintiffs rely upon the Supreme Court’s decision in Wells Fargo for the

proposition that an exemption from “all taxation” does not cover excise taxes such as

the Michigan Transfer Taxes. 485 U.S. 351. Plaintiffs say that Wells Fargo made clear

that an exemption from all taxation covers only direct taxes, not excise taxes. The

Court agrees.

In Wells Fargo, the Supreme Court considered whether certain items of personal

property–“Project Notes”–were exempt from the federal estate tax. In the late 1930s,

Congress passed the Housing Act, 50 Stat. 888 et seq., which empowered state and

local governments to issue tax-free obligations called Project Notes to finance housing

projects. 485 U.S. at 353. Congress provided that “[Project Notes], including interest

thereon, . . . shall be exempt from all taxation now or hereafter imposed by the United

States.” Id. at 355. Discussing the exemption, the Supreme Court stated:

Well before the Housing Act was passed, an exemption of property from all

taxation had an understood meaning: the property was exempt from direct

taxation, but certain privileges of ownership, such as the right to transfer the

property, could be taxed. Underlying this doctrine is the distinction between an

excise tax, which is levied upon the use or transfer of property . . . and a tax

levied upon the property itself. The former has historically been permitted even

where the latter has been constitutionally or statutorily forbidden. Id.

After reviewing the case law, the Supreme Court held that the exemption from all

taxation did not exempt the Project Notes from excise taxes such as the estate tax. The

Court noted that where Congress had, on other occasions, exempted property from

estate taxation, it generally referred specifically to the estate tax rather than to “all

taxation.” Id. at 356.

In reaching its conclusion, the Court reviewed over eighty years of Supreme

Court case law holding that excise taxes have historically been permitted, even when

tax on the property has been forbidden.

IV. CONCLUSION

In the end, this case turns on a single question: whether a statutory exemption

from “all taxation” includes excise taxes such as the Michigan Transfer Taxes. Wells

Fargo dictates that it does not. Accordingly, the Enterprises are liable for the Transfer

Taxes.

Plaintiffs’ and State Plaintiff’s motion for summary judgment is GRANTED.

Defendants’ motion is DENIED. The issue of damages remains.

IT IS ORDERED.

Full order below… 

www.4closureFraud.org

OAKLAND COUNTY, ET AL., vs FEDERAL HOUSING FINANCE AGENCY

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