USA HISTORY

Detailed explanation-1: -The state of Maryland imposed a tax on the bank of $15, 000/year, which cashier James McCulloch of the Baltimore branch refused to pay. The case went to the Supreme Court. Maryland argued that as a sovereign state, it had the power to tax any business within its borders.

Detailed explanation-2: -McCulloch, a Federal cashier at the Baltimore branch of the U.S. bank, refused to pay the taxes imposed by the state.

Detailed explanation-3: -In a unanimous decision, the Court held that Congress had the power to incorporate the bank and that Maryland could not tax instruments of the national government employed in the execution of constitutional powers.

Detailed explanation-4: -In 1818, Maryland legislators passed a law imposing a stamp tax on currency issued by second Bank of the United States, in an effort to hinder it from doing business. In response, a cashier at the bank’s Baltimore branch, James W. McCulloch, refused to pay the tax.

Detailed explanation-5: -In McCulloch v. Maryland (1819) the Supreme Court ruled that Congress had implied powers under the Necessary and Proper Clause of Article I, Section 8 of the Constitution to create the Second Bank of the United States and that the state of Maryland lacked the power to tax the Bank.