First Tennessee Bank, N.A. Chattanooga v. Olsen

DROWOTA, Justice.

This tax refund suit consists of three companion cases, which are themselves consolidated actions brought by numerous banking institutions, seeking to recover excise taxes assessed and paid under protest. Initially, the Plaintiffs raised several issues at trial, but only one issue survives and is presented on appeal: Whether interest income from obligations issued by either Federal National Mortgage Association (FNMA) or Government National Mortgage Association (GNMA) is exempt from State taxation by 31 U.S.C. § 3124 (formerly 31 U.S.C. § 7421)?

The Commissioner of Revenue…