Department of Revenue of Kentucky v. Davis

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Department of Revenue of Kentucky v. Davis
Seal of the United States Supreme Court.svg
Argued November 5, 2007
Decided May 19, 2008
Full case name Department of Revenue of Kentucky, et al. v. George W. Davis, et ux.
Docket nos. 06-666
Citations 553 U.S. 328 (more)
128 S. Ct. 1801; 170 L. Ed. 2d 685; 2008 U.S. LEXIS 4312; 76 U.S.L.W. 4288; 21 Fla. L. Weekly Fed. S 227
Prior history On Writ of Certiorari to the Court of Appeals of Kentucky.
Court membership
Chief Justice
John G. Roberts
Associate Justices
John P. Stevens · Antonin Scalia
Anthony Kennedy · David Souter
Clarence Thomas · Ruth Bader Ginsburg
Stephen Breyer · Samuel Alito
Case opinions
Plurality Souter (opinion of the Court except for Part III-B), joined by Stevens, Breyer; Roberts, Ginsburg (all but Part III-B); Scalia (all but Parts III-B and IV)
Concurrence Roberts
Concurrence Stevens
Concurrence Scalia
Concurrence Thomas
Dissent Kennedy, joined by Alito
Dissent Alito

Department of Revenue of Kentucky v. Davis, 553 U.S. 328 (2008), is a United States Supreme Court case in which the Court upheld a Kentucky law that provides a preferential tax break to Kentucky residents who invest in bonds issued by the state and its municipalities (municipal bonds). The Court held in a 7-2 vote that the State of Kentucky does not engage in unconstitutional discrimination against interstate commerce by exempting the interest on its bonds from residents' taxable income while taxing the interest earned on the bonds of other states.[1] The case has national implications because thirty-six (36) states have tax schemes similar to the one at issue in Kentucky.[2]


George and Catherine Davis sued the State of Kentucky under the legal theory that the State of Kentucky violated the Dormant Commerce Clause, a legal implication of the Commerce Clause, by providing a differential tax treatment to gains earned from investments in municipal bonds from Kentucky versus other states.[3]

Opinion of the Court[edit]

The majority opinion stated that the Kentucky tax scheme benefited a clearly public issuer, while treating all private issuers exactly the same. There was no forbidden discrimination because Kentucky, as a public entity, did not have to treat itself as being "substantially similar" to the other bond issuers in the market. The Kentucky tax scheme was constitutional because the Commonwealth's direct participation favored, not local private entrepreneurs, but the Commonwealth and local governments.


  1. ^ Greenhouse, Linda (May 20, 2008). "Court Upholds Tax Exemptions for Municipal Bonds". New York Times. Retrieved 2008-05-20. 
  2. ^ Department of Revenue of Kentucky v. Davis 553 U.S. ____, pg 5.
  3. ^ Department of Revenue of Kentucky v. Davis 553 U.S. ____, pg 6.

External links[edit]