Maryland State and Municipal Bonds: Tax Exempt Status

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In 2009 I prepared a research memorandum on the history of tax exempt bonds in Maryland, focusing on the estate of Betsy Patterson Bonaparte.

It related to an inquiry concerning the National Association of State Treasurers (NAST) amicus brief and centered on the 1882 Supreme Court Decision involving the taxing of the bonds of Betsy Patterson. I was asked if we could document whether or not, during the time of the case, she and/or her heirs held any Maryland bonds that would have been exempt from Maryland taxes.

Our research established that Betsy Patterson held tax exempt State of Maryland Bonds at the time of the suit, but was taxed on other Maryland bonds that were not specifically exempted from State taxes by statute.

Betsy Patterson (former wife of Napoleon's brother and the daughter of a very wealthy Baltimore merchant), died in the midst of the court battle over whether the state of Maryland could tax her out of state bonds (the Supreme Court decided that Maryland could, by affirming the Maryland Court of Appeals decision in the case).

A copy of the brief on her behalf before the Maryland Court of Appeals is available on the MSA web site, the proper citation for which is:

Maryland State Archives, COURT OF APPEALS (Briefs) Appeal Tax Court of Baltimore City v. Elizabeth Patterson, Oct. Term 1878 No. 114 [MSA S375-106, 1/64/12/38]

Attached is a pdf of her inventory which on f. 7 lists the Maryland bonds she held at the time of her death. She had a considerable investment in Maryland State and Baltimore City municipal bonds. The proper citation for the attached image from her inventory is:

Maryland State Archives, BALTIMORE CITY REGISTER OF WILLS (Inventories, Original) Elizabeth Patterson Bonaparte, Box 52 [MSA T643-56, 2/34/9/22, f.7].

The Baltimore City bonds that the Pattersons and Bonapartes (Betsy Patterson's grandchildren) were taxed by Maryland, the proof of which comes from the records of the Comptroller that were kept in accord with the State tax law that was at the heart of her complaint in the 1882 Supreme Court decision (1881 term). Copies of the covers and the pages relating to the taxing of her municipal bonds are attached. There is a column indicating what taxes were levied for the City of Baltimore related bonds. The citations, and links to pdfs of these records, are as follows:


Maryland State Archives, COMPTROLLER OF THE TREASURY (Baltimore City Stockholders) MSA S632 -

1 - List of holders of loans of Baltimore City Stock liable to state tax for 1879. (MdHR 2706, MSA S632-38, 2/64/12/34)

2 - List of holders of loans of Baltimore City Stock liable to state tax July 1, 1879. (MdHR 2707, MSA S632-39, 2/64/12/34)

3 - List of holders of loans of Baltimore City Stock liable to state tax July 1, 1879. (MdHR 2708, MSA S632-40, 2/64/12/34)

4 - Copy of names of stockholders of and state tax on, 1878 (MdHR 2704, MSA S632-36, 2/64/12/33)

5 - Copy of names of stockholders of and state tax on, 1878 (MdHR 2705, MSA S632-37, 2/64/12/33)


There is no ledger account listing any taxes on the $63,000 Betsy Patterson held in State Bonds, because they were tax exempt by law (see the attached copy of the 1868 law from the authoritative Archives of Maryland On Line on our web site), the web citation for which is:

http://www.msa.md.gov/megafile/msa/speccol/sc2900/sc2908/000001/000142/html/am142--2742.html


Unless the laws governing the issuance of bonds specifically indicated that they were exempt from State taxes, all bonds issued on behalf of the State and its subdivisions to 1914, subsequent to the 1876 law in question in the Patterson/Bonaparte Supreme Court Case were taxed (see: http://www.msa.md.gov/megafile/msa/speccol/sc2900/sc2908/000001/000199/html/am199--432.html).

In 1914 a law was passed exempting all such bonds from state taxes:

http://www.msa.md.gov/megafile/msa/speccol/sc2900/sc2908/000001/000533/html/am533--61.html.

Copies of both the 1876 and the 1914 laws are available from the MSA web site by following the above hyperlinks.

See also: Letter of thanks from Treasurer Nancy Kopp to Dr. Papenfuse


'Charles Joseph Bonaparte' (1851-1921), Betsy's grandson, lived on Roland Avenue in a house now a part of Roland Park Country School. On November 15, 2000, ecp gave a talk at the school entitled: The Heritage of a House: Charles J. Bonaparte and Good Government, accompanied by an analysis of the probate and other records related to the Patterson/Bonaparte families that includes hyperlinks to the original records.

Charles Joseph Bonaparte

(1851-1921)

MSA SC 3520-13412

Attorney-at-law


Biography:

"Charles Joseph Bonaparte," from Dictionary of American Biography. ed. Allen Johnson, Vol. II (New York: Charles Scribner's Sons, 1929), 427-8.

"Charles Joseph Bonaparte," from Winchester, Paul. Men of Maryland Since the Civil War. Vol. 1 (Baltimore: Maryland County Press Syndicate), 156-158.

"Charles Joseph Bonaparte," from Report of the Twenty-Sixth Annual Meeting of the Maryland State Bar Association. (Annapolis: Maryland State Bar Association, 1921), 43-45.

"Charles Joseph Bonaparte," from The National Cyclopedia of American Biography. Vol. XIII (New York: James T. White & Company, 1906), 515-6.

"Charles Joseph Bonaparte," from The National Cyclopedia of American Biography. Vol. XIV (New York: James T. White & Company, 1917), 22-3.

Smith, Gene. "The Last Bonaparte," American Heritage. (November 1997).

Program from the Memorial Services in Honor of the Late Charles J. Bonaparte meeting of the Bench and Bar of Baltimore City.

Bishop, Charles Bucklin. Charles Joseph Bonaparte His Life and Public Service. New York: Charles Scribner's Sons, 1922. Sources:

Charles Joseph Bonaparte:

BALTIMORE COUNTY REGISTER OF WILLS (Estate Papers) 1921, MSA T 679, Charles J. Bonaparte, Box 1219 Estate No. 3792

Susan May Bonaparte (mother):

BALTIMORE CITY REGISTER OF WILLS (Wills, Original) 1881, MSA T 628, Susan May Bonaparte, Box 50

BALTIMORE CITY REGISTER OF WILLS (Inventories, Original) 1881, MSA T 643, Susan May Bonaparte, Box 124

BALTIMORE CITY REGISTER OF WILLS (Administration Accounts) MSA T 605, Susan May Bonaparte, Volume 109, pp. 548-551


Jerome Bonaparte (father):

SPECIAL COLLECTIONS (Sun Collection) MSA SC 2852, 18 June 1870

SPECIAL COLLECTIONS (Baltimore American & Commercial Advertiser Collection) MSA SC 4150, 18 June 1870

BALTIMORE CITY REGISTER OF WILLS (Wills, Original) 1870, MSA T 628, Jerome Bonaparte, Box 6

BALTIMORE CITY REGISTER OF WILLS (Inventories) 1870, MSA T 603, Jerome Bonaparte, 1870, Volume 90 pp. 372-378

BALTIMORE CITY REGISTER OF WILLS (Inventories, Original) 1870, MSA T 643, Jerome Bonaparte, Box 40

BALTIMORE CITY REGISTER OF WILLS (Administration Accounts) 1879, MSA T 605, Jerome Bonaparte, 1870, Volume 85 pp. 552-555

Elizabeth Patterson Bonaparte (grandmother):

SPECIAL COLLECTIONS (Sun Collection) MSA SC 2852, 5 April 1879

SPECIAL COLLECTIONS (Baltimore American & Commercial Advertiser Collection) MSA SC 4109, 5 April 1879

BALTIMORE CITY REGISTER OF WILLS (Administration Accounts, Original) MSA T 627, Elizabeth Patterson Bonaparte, Box 92

BALTIMORE CITY REGISTER OF WILLS (Inventories, Original) 1879, MSA T 643, Elizabeth Patterson Bonaparte, Box 52

BALTIMORE CITY REGISTER OF WILLS (Wills, Original) 1877, MSA T 628, Elizabeth Patterson Bonaparte, Box 115

Colonel Jerome Bonaparte (brother):

SPECIAL COLLECTIONS (Baltimore American & Commercial Advertiser Collection) MSA SC 4109, 5 September 1893