Estate of Bohn v. Waddell

OPINION

TOCI, Judge.

During the tax years 1984 through 1988, Arizona’s income tax laws exempted from income taxation 100% of state, county, and municipal retirement benefits paid to retired employees of those political entities, while exempting only the first $2,500 of federal retirement benefits paid to retired federal employees.

On March 28, 1989, the United States Supreme Court, in Davis v. Michigan Dep’t of Treasury, 489 U.S. 803, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989), invalidated a similar Michigan income tax scheme on the ground it violated the principles of intergovernmental tax immunity.