Does Fed or State Law Prevail?

In a recent CNN article about discrimination by businesses, the author states:

When there's a conflict between federal and state laws, federal law always trumps state law

How about tax law?

How about tax law?

What conflict are you asking about? I don't think I've ever run into a conflict between fed and state tax law. Even if there were a conflict, how could fed enforce its version?

No specific conflict, just curious when a conflict arises. The CNN article quote was general in nature.

In a recent CNN article about discrimination by businesses, the author states:

When there's a conflict between federal and state laws, federal law always trumps state law

How about tax law?

Think about same sex marriage. Many states allowed it for filing before feds.

FED trumped state there.....


I can’t think of an example where state law would be permitted on a federal return in conflict with FED law.

Big difference between Fed & States when it come to Marijuana

Not sure how you can say Fed Laws trump state laws. Look at the minimum wage. Most states have a higher min wage than the federal min wage but you have to go by the state law

Think about same sex marriage. Many states allowed it for filing before feds.

FED trumped state there.....

I can’t think of an example where state law would be permitted on a federal return in conflict with FED law.

You are contradicting yourself. As you say, states allowed same sex couples to file joint tax returns when fed didn't. So in what way did the fed supersede the state, if states were free to do what they wished even if not conforming to federal?

This is what I don't get about this question. Who's talking about forcing fed tax law onto state tax returns, or vice versa? We don't do that. They are two separate systems. So again, what conflict is there?

Perhaps there are some state tax laws that have been ruled to violate the federal constitution, that is the one and only scenario I can think of where a federal provision would supersede the state in a conflict. And of course, fed law wouldn't be subject to any state-level unconstitutionality (one-way constitutionality).

With the specific example of same sex marriage, the DOMA law (later found unconstitutional) was limited to defining legal marriage at the federal level. So the state level law prevailed at the state level but the federal only affected federal law (such as federal income tax law).

That is quite different from marijuana, as BerkshireCPA brought up, because its illegality at the federal level is absolute, and every state with a legalization/decriminalization/medicinal statute is not making it legal. The DEA could raid every dispensary in Colorado if they wanted to; they just wouldn't get a lot of help from the local police.

That is quite different from marijuana, as BerkshireCPA brought up, because its illegality at the federal level is absolute, and every state with a legalization/decriminalization/medicinal statute is not making it legal.

But the question was specifically about tax law. How is the federal controlled substance law and DEA within the scope of tax law?
A state can choose or not to conform to what the feds consider to be taxable income and allowable deductions. For example, CA chooses to conform to the federal definition of what is allowable medical expense deduction and so does not allow deduction for medical cannabis, but it could if it wanted to.

What about income that is illegal at either fed or state level? It's still allowed to be legally taxed, isn't it? Basically the tax law does not depend on whether the thing being taxed is prohibited by other laws, so again I don't understand the question in the OP.

But the question was specifically about tax law. How is the federal controlled substance law and DEA within the scope of tax law?

§280E

But the question was specifically about tax law. How is the federal controlled substance law and DEA within the scope of tax law?

§280E

But that's a section of federal tax law, not state. Are you trying to say that states must follow federal tax law §280E in the state tax law? I think that's what this question is about, and why it doesn't make sense to me.

It's not the law on controlled substances that made deductions for same not allowed for tax purposes, it's the law on taxes that did so. The law on controlled substances did not by itself change the tax law, therefore out of scope.

It occurs to me, somehow, that states are not even required to have state income tax laws of any kind, are they? Correct me if I'm wrong. So how could federal tax law supersede or override state tax law if the latter need not even exist? I mean, states are not required to tax income from activities illegal under federal law, even though the feds do, right?

Or let's try a simple counter-example: if federal tax law does override state tax law, the the state could just remove (repeal) its own state tax law, thereby overriding the federal override. So, again, I don't understand the question.

But that's a section of federal tax law, not state.

Well, that's a different question than the one you asked. States can conform to most income tax provisions if they want to, sure. States can conform to §280E if they want, and if they did they would be affected by whether the federal government decides to schedule or deschedule marijuana, cocaine, or pop tarts. It's just an example that we can use to show how different federal laws override state laws in different manners.

Federal marriage law during DOMA was not a preemption of state law; it just forced federal law to ignore state law when gay couples were involved. Now in a post-DOMA world, federal law now overrides states' laws, and if a state has tax provisions for married couples then it has to allow them to all two-human couples whether the state law says it's okay or not.

Why don't we just go to a much more direct example - federal law preempts states' ability to tax nonresident truck drivers (W-2 and 1099) and nonresident airline pilots. Clear overrides.

Think about same sex marriage. Many states allowed it for filing before feds.

FED trumped state there.....

I can’t think of an example where state law would be permitted on a federal return in conflict with FED law.

You are contradicting yourself. As you say, states allowed same sex couples to file joint tax returns when fed didn't. So in what way did the fed supersede the state, if states were free to do what they wished even if not conforming to federal?

This is what I don't get about this question. Who's talking about forcing fed tax law onto state tax returns, or vice versa? We don't do that. They are two separate systems. So again, what conflict is there?

Perhaps there are some state tax laws that have been ruled to violate the federal constitution, that is the one and only scenario I can think of where a federal provision would supersede the state in a conflict. And of course, fed law wouldn't be subject to any state-level unconstitutionality (one-way constitutionality).

My point was that states allow it but FEDS won't follow state law when it comes to income taxes. In other situations I can see it but in plain rules and regs, I can think of a state law that the fed will follow if NOT allowed by FED tax law.

Why don't we just go to a much more direct example - federal law preempts states' ability to tax nonresident truck drivers (W-2 and 1099) and nonresident airline pilots. Clear overrides.

As for non-resident airline pilots, I thought states such as CA were actually able to tax flight crews for the portion of the time they spent in CA airspace as CA source income.

But now at least we're getting somewhere, in terms of trying to establish what we mean by "conflict". We have two separate and independent tax jurisdictions, federal and any given state. To me, establishing which citizens are subject to which jurisdiction in the first place (residency vs. non-residency, for example) is not resolving a conflict between the tax laws, it's resolving a jurisdictional issue.

A conflict then would mean, where a state tax law is either forced or prohibited due strictly to a federal tax law. Now I did mention earlier that the U.S. constitution might override a state tax law. Say for example that a state wanted to tax only white male citizens, that would probably be overridden at the federal level. But even then, it would not be federal tax law that is the conflict, but rather other rights of citizens established at the federal level.

Interest on U.S. debt obligations is not taxable by states. But is that a result of federal tax law, or some other federal law outside of Title 26? (I think it's the latter).

But what else? What other income tax or deduction is a state either forced or prohibited from establishing, due solely to federal income tax law? Again, I'm not talking about what people are covered by which law, but the law itself.

Well, that's a different question than the one you asked. [..]It's just an example that we can use to show how different federal laws override state laws in different manners.[...] Now in a post-DOMA world, federal law now overrides states' laws

The whole problem with this thread as I pointed out earlier is the original question asked specifically about conflicts between state and federal tax law.

So far the only conflicts or overrides pointed out have been due to federal NON-tax laws (or constitutional guarantees) that override state laws. The original question started by stipulating that, and then asked specifically about tax laws, only. I asked what an example of a conflict between TAX laws would be, so far none.

We have yet to see in this thread, any example where a federal tax law says something is or is not taxable, is or is not deductible, where state tax laws, if there even are any, are required to make the same treatment. Here is another example of just the opposite:

California tax code 17269 specifically overrides federal Section 162(a) here:

"The provisions of Section 162(a) of the Internal Revenue Code shall not be applicable to expenses incurred by a taxpayer with respect to expenditures made at, or payments made to, a club which restricts membership or the use of its services or facilities on the basis of ancestry or any characteristic listed or defined in Section 11135 of the Government Code, except for genetic information."

So please show an example where a state would be prohibited (overridden) from passing a tax law such as this. California obviously hasn't been.

I will side with makbo and assert that there is nothing in the Internal Revenue Code that could directly limit a state's authority to tax.

All of the limits on a state's taxing authority derive directly from the constitution:

Article I, § 8, Clause 3 (Commerce)
Article I, § 10, Clause 2 (Import–Export)
Article IV, § 2, Clause 1 (Privileges and Immunities)
Article VI, Clause 2 (Supremacy)
First Amendment (Freedom of Expression and Religion)
Fourteenth Amendment (Due Process; Equal Protection)

For example, states can't tax interest on U.S. debt obligations due to the Supremacy Clause. The reasoning was articulated in McCulloch v. Maryland and Weston v. City Council of Charleston.

For a more recent example, see Comptroller of Treasury of Md. v. Wynne, where Maryland was forced to provide full out-of-state tax credits for its residents due to the Commerce Clause.

That being said, I would also point out that Congress can influence state tax laws using the indirect economic powers of the IRC, which they happen to have done quite recently with the TCJA. I believe they may have actually come out and said that this was one of their goals.

Why don't we just go to a much more direct example - federal law preempts states' ability to tax nonresident truck drivers (W-2 and 1099) and nonresident airline pilots. Clear overrides.

As for non-resident airline pilots, I thought states such as CA were actually able to tax flight crews for the portion of the time they spent in CA airspace as CA source income.

Maybe it is just truck drivers, then. I thought that the law covered both, but I've been wrong before, and I don't have any airline pilots as clients so I've never had to research it too hard.

A conflict then would mean, where a state tax law is either forced or prohibited due strictly to a federal tax law.

I do not understand this condition. A conflict would occur any time that federal law, be it any title of the US Code (26 or otherwise) or federal court decision, prevents a state from making or enforcing the tax law of their choice.

A conflict then would mean, where a state tax law is either forced or prohibited due strictly to a federal tax law.

I do not understand this condition. A conflict would occur any time that federal law, be it any title of the US Code (26 or otherwise) or federal court decision, prevents a state from making or enforcing the tax law of their choice.

That's what I've been trying to clarify through several posts in this thread. The original question, as asked, limited the scope to tax law. Go back and read it. That's why I've been asking for where there is an example of a conflict.

To say that the U.S. constitution, as I already acknowledged, can supersede state laws, is so obvious that I was giving the benefit of the doubt that someone wouldn't actually be asking that.

The question is still an interesting one as asked. I think we've concluded that if a state wanted to allow an income tax deduction for medical marijuana, or if a state chose not to include illegal income in taxable income, there is nothing about conflicting federal tax treatment that would stop them.

It occurred to me recently that maybe this question was asked in the context of TCJA. There are some ignorant folks out there, including the WSJ editorial board, who don't understand that states are not required to conform to federal tax law. Due dates, depreciation methods, deductions, whatever -- they can do whatever they want regardless of what federal tax law does. No state is required to follow anything in TCJA if they don't want to.

To say that the U.S. constitution, as I already acknowledged, can supersede state laws, is so obvious that I was giving the benefit of the doubt that someone wouldn't actually be asking that.

So why must it be a tax law that overrides the state tax law? The truck driver example comes from Title 49.

So why must it be a tax law that overrides the state tax law?

Did you read the OP? It was asking specifically about tax law.