Tax Exemption – Real Estate

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7^th Circuit Court of Appeals

Case Name: Federal National Mortgage Association, et al., v. City of Chicago, et, al.

Case No.: 16-4140

Officials: MANION and KANNE, Circuit Judges, and MILLER, District Judge.*

Focus: Tax Exemption – Real Estate

In 2013, this court held that state and local taxing authorities could not charge the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, or Federal Housing Finance Agency with real estate transfer taxes, because such taxes are preempted by federal laws exempting these entities from all taxation. We must now determine whether the federal statutory exemptions apply when the transfer tax is charged to a private buyer who purchases real estate from one of the exempt federal entities. The district court concluded that, because the imposition of a transfer tax impacts the price the federal entities can charge for real property, the tax is unconstitutional regardless of who is required to pay it. Because this conclusion is contrary to the plain language of the tax exemption provisions, the judgment of the district court is reversed.

Reserved and Dissolved

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.