Davis v. Michigan Department of the Treasury

The State of Michigan exempts from taxation all retirement benefits paid by the State or its political subdivisions, but levies an income tax on retirement benefits paid by all other employers, including the Federal Government. The question presented by this case is whether Michigan’s tax scheme violates federal law.

I

Appellant Paul S. Davis, a Michigan resident, is a former employee of the United States Government. He receives re*806tirement benefits pursuant to the Civil Service Retirement Act, 5 U. S. C. §8831 et seq. In each of the years 1979 through 1984, appellant paid Michigan state income…