Frick Et Al. v. Pennsylvania

Background

Henry C. Frick, a man domiciled in Pennsylvania, died in 1919 leaving a large estate. His will gave much property to charities and individuals. The estate included art and household items physically located in New York and Massachusetts and stocks in corporations of other States. The will was probated in Pennsylvania and proved in New York and Massachusetts. Pennsylvania applied a 1919 transfer tax to the whole estate value, refused deductions for taxes paid to the United States or other States, and computed tax including the out‑of‑state tangible property and full stock value. Pennsylvania courts upheld the tax; the executors and an interested legatee appealed here.

Reasoning

The Court addressed whether Pennsylvania could tax the transfer of tangible personal property that actually sat in other States, and whether it could use full stock value without deducting transfer taxes paid elsewhere or deduct the federal estate tax. Relying on earlier decisions, the Court said a State’s power to tax tangible property rests where that property has its situs, and that Pennsylvania had no jurisdiction over the tangible items in New York and Massachusetts. The Court also held that Pennsylvania could not include full stock value without deducting transfer taxes paid to other States. But the Court found no constitutional obligation to deduct the federal estate tax.

Real world impact

The decision prevents a State from reaching out to tax tangible property physically located in other States on death. Executors and heirs can expect that out‑of‑state tangible items are taxed at their situs, not at the decedent’s domicil. States must allow reduction for transfer taxes paid to other States when measuring taxable stock value. The ruling leaves the refusal to deduct the federal estate tax intact, so States may choose not to deduct federal estate taxes when computing their transfer tax.