Q: How can the states claim authority to assess ad valorem taxes based on federal reserve notes? USC Title 31 section 742
USC Title 31 section 742 states “Except as otherwise provided by law all stocks, bonds treasury notes and other obligations of the United States Government shall be exempt from the state, local, and municipal authority. This exemption extends to every form of taxation that would require that either the obligations or the interest thereon or both be considered directly or indirectly in the computation of the tax.” Given this, what authority does the county and municipality have to assess ad valorem taxes if it is based on federal reserve notes which are considered obligations according to Title 12 Section 411 which says “Said note shall be deemed to be obligations of the United States Government."
A:
The authority of states and municipalities to levy ad valorem taxes, which are based on the value of property, is not directly related to the provisions you mentioned in USC Title 31 Section 742 or Title 12 Section 411. These sections refer to the tax-exempt status of obligations of the U.S. government and the nature of Federal Reserve notes as obligations of the government, respectively.
Ad valorem taxes are assessed on property, such as real estate and personal property, within the jurisdiction of the taxing authority (like a county or municipality). This form of taxation is based on the assessed value of the property, not on any federal obligations or securities.
The legal basis for ad valorem taxes is derived from the state's power to tax within its jurisdiction and is typically authorized by state constitutions and laws. These taxes are a primary source of revenue for local governments, funding essential services like education, public safety, and infrastructure.
Federal Reserve notes, being the currency used in the United States, are the medium through which these taxes are paid. However, their status as obligations of the U.S. government does not affect the validity or enforcement of state and local property taxes.
If you have specific concerns or questions about how these laws apply to your situation, it's advisable to consult with an attorney who has experience in tax law. They can provide detailed guidance and clarification based on your individual circumstances.
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