Liability of the United States for State and Local Taxes on Seized and Forfeited Property: Memorandum for Cary H. Copeland, Director and Chief Counsel, Executive Office for Asset Forfeiture [October 18, 1993] [open pdf - 48KB]
"You have asked us to reconsider our opinion that property seized by and forfeited to the United States is not subject to state or local taxation for the period between the commission of the offense that leads to the order of forfeiture and the entry of the order of forfeiture. See Liability of the United States for State and Local Taxes on Seized and Forfeited Property, 15 Op. O.L.C. [Office of Legal Counsel] 85 (1991) (preliminary print) ('Harrison Memorandum'). In light of the Supreme Court's decision in United States v. 92 Buena Vista Ave., 113 S. Ct. 1126 (1993), we partially reverse our opinion. Because states and localities may not tax federal property (absent express congressional authorization), the time at which ownership of forfeited property passes to the United States and the extent of the ownership interest that passes to the United States determine whether state and local taxes are owed. In many property transactions, the time and the extent of transfer of ownership are unambiguous and independent issues. In cases of transfers of ownership under the federal forfeiture statutes, however, the answer to the question of when ownership is transferred has been a matter of dispute, and of great consequence for the extent of the interest transferred."
United States. Department of Justice: http://www.justice.gov/