Department of Employment v. United States

Colorado is one of three States 1 whose Employment Security Act imposes an unemployment compensation tax upon charitable institutions, the tax being measured by the amount of wages paid to the institution’s employees. Colo. Rev. Stat. Ann. § 82-6-1. When the State’s Department of Employment sought to enforce the tax upon wages paid Colorado-based employees of the American National Red Cross (hereinafter referred to as Red Cross), the Red Cross objected that as a “federal instrumentality” it was immune from such taxation. See McCulloch v. Maryland, 4 Wheat. 316 (1819). Tax payments aggregating…