Department of Revenue of Kentucky v. Davis
Case Date: 07/10/2025
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Department of Revenue of Kentucky v. Davis, 553 U.S. 328 (2008) is a decision by the Supreme Court of the United States which upheld a Kentucky law that provides a preferential tax break to Kentucky residents who invest in bonds issued by the state and its municipalities (municipal bonds). The Court held in a 7-2 vote that the State of Kentucky does not engage in unconstitutional discrimination against interstate commerce by exempting the interest on its bonds from residents’ taxable income while taxing the interest earned on the bonds of other states.[1]
The case has national implications because thirty-six (36) states have tax schemes similar to the one at issue in Kentucky.[2]
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