TAXATION-PROCEDURAL DEVICES FOR PREVENTING MULTIPLE TAXATION OF INTANGIBLES BASED ON DOMICILE - ORIGINAL SUIT BY WAY OF INTERPLEADER BEFORE SUPREME COURT

The famous Dorrance litigation raised very sharply the problem of avoiding multiple inheritance taxes based upon conflicting claims of domicile. Up to that time it was thought that the right of a state to levy an inheritance tax upon intangible personal property owned by a nonresident decedent had been effectively denied by Farmers Loan & Trust Co. v. Minnesota, Baldwin v. Missouri, and First National Bank of Boston v. Maine. But the Dorrance cases resulted in the collection of huge inheritance taxes by Pennsylvania and New Jersey, both states grounding their assessments upon the assertion that Dr. Dorrance was domiciled in the claimant state at the time of his death. Such an incongruous result aroused the attention of tax lawyers and writers, who foresaw that states could indirectly accomplish what the United States Supreme Court had held to be forbidden under the due process clause of the Fourteenth Amendment.

It was also foreseen that this phenomenon would occur with increasing frequency because of the present-day tendency of Americans to live in different parts of the United States during different seasons of each year.