Taxation

In 1913, ratification of the Sixteenth Amendment to the Constitution gave Congress the power to "lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." This provision ushered in the modern federal income tax law, which is codified in the Internal Revenue Code (IRC), Title 26 of the United States Code. The Internal Revenue Service administers the tax laws of the IRC and promulgates its associated regulations. Subtitle A of the IRC governs the taxation of income (both individual and corporate), Subtitle B regulates estate and gift taxes, and Subtitle C administers employment taxes, including the Federal Insurance Contributions Act (FICA). FICA contributions fund the Medicare and Social Security programs, and are also covered by tax law.

Tax law is not solely state law. The power to collect taxes is concurrent with the federal government. The states, like the federal government, have the constitutional power to tax. They may not, however, impose taxes that impede interstate commerce or interfere with a federal power. In addition to personal and corporate income taxes, tax law also includes real property taxes, personal property taxes, franchise taxes, telecommunications taxes, liquor taxes, cigarette taxes, sales and use taxes, fuel taxes, and estate and inheritance taxes.