- Court: United States Supreme Court
- Area(s) of Law: Tax Law
- Date Filed: June 21, 2018
- Case #: 17-530
- Judge(s)/Court Below: GORSUCH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. BREYER, J., filed a dissenting opinion, in which GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined.
- Full Text Opinion
Petitioners filed suit seeking reimbursement under the Railroad Retirement Tax Act, 26 U.S.C. § 3231(e)(1), for taxes paid when employees exercised stock options paid to them by Petitioner. The District Court ruled that the Petitioners were not entitled to reimbursement, and the Court of Appeals for the Seventh Circuit affirmed. On appeal, the Supreme Court found that the Railroad Retirement Tax Act prohibits taxation of employee stock options as “money renumeration” and reversed the decision of the lower court. The Court reasoned that under the plain meaning of the statute, stocks were not considered taxable compensation under the 1937 Act. The Court also cited the Federal Insurance Contributions Act, 26 U.S.C. § 3121(a), which specifically taxes “all renumeration” including non-monetary compensation. Under INS v. Cardoza-Fonseca, 480 U.S. 421, 432 (1987), where Congress passed different legislation to accomplish similar tasks, differences in the legislation should be presumed to convey differences in meaning. The Court further reasoned that because stocks are not considered a form of currency, and instead represent an interest with monetary value, they do not qualify as “money renumeration” for purposes of the Act. REVERSED AND REMANDED.