Under 6331 of the Internal Revenue Code of 1954, a Director of Internal Revenue issued notices of levy directed to a State and served them on petitioner, the State Auditor, seizing the accrued salaries of certain employees of the State against whom the Commissioner of Internal Revenue had assessed income tax deficiencies. Petitioner refused to honor the levies and issued and delivered to the taxpayers warrants for their accrued salaries. The Federal Government then brought this suit against petitioner under 6332 to recover from him personally the sums he had so paid to the taxpayers in disobedience of the Government's levies. Held:
Fred H. Caplan, Assistant Attorney General of West Virginia, argued the cause for petitioner. With him on the brief was W. W. Barron, Attorney General of West Virginia.
Melva M. Graney argued the cause for the United States. With her on the brief were Solicitor General Rankin, Assistant Attorney General Rice and Joseph Kovner.
MR. JUSTICE WHITTAKER delivered the opinion of the Court.
The Commissioner of Internal Revenue assessed an income tax deficiency against each of three residents of West Virginia and forwarded the assessment lists to the [359 U.S. 108, 109] Director of Internal Revenue at Parkersburg for collection. The deficiencies remaining unpaid for more than 10 days after demand for payment and the taxpayers being then employed by the State of West Virginia, the Director issued notices of levy directed to the State of West Virginia and served them on petitioner, as the State Auditor, seizing the accrued salaries of the taxpayers pursuant to 6331 of the 1954 Internal Revenue Code, 26 U.S.C. (Supp. V) 6331. 1 Petitioner refused to honor the levies and instead issued and delivered payroll warrants to the taxpayers for their then accrued net salaries aggregating $519.71. 2 Thereafter the Government brought this suit in the Federal District Court against petitioner under 6332 of the 1954 Internal Revenue Code, 26 U.S.C. (Supp. V) 6332, 3 to recover from [359 U.S. 108, 110] him personally the $519.71 that he had so paid to the taxpayers in disobedience to and defeat of the Government's levies. The District Court rendered judgment for the Government and the Court of Appeals affirmed, 252 F.2d 434. Certiorari was sought on the grounds that 6331 does not authorize a levy on the accrued salaries of employees of a State, and that, if it be held that it does, petitioner was not a person "obligated with respect to" the accrued and seized salaries, within the meaning of 6332, and, therefore, is not personally liable for refusing to surrender them to the Government. We granted the writ to determine those questions. 358 U.S. 809 .
Nothing in the Constitution requires that the salaries of state employees be treated any differently, for federal tax purposes, than the salaries of others, Helvering v. Gerhardt, 304 U.S. 405 ; Graves v. New York ex rel. O'Keefe, 306 U.S. 466 , and it is quite clear, generally, that accrued salaries are property and rights to property [359 U.S. 108, 111] subject to levy. 4 In plain terms, 6331 provides for the collection of assessed and unpaid taxes "by levy upon all property and rights to property" belonging to a delinquent taxpayer. 5 Pursuant to that statute a regulation was promulgated expressly interpreting and declaring 6331 to authorize levy on the accrued salaries of employees of a State to enforce collection of any federal tax. 6
Although not disputing these principles, petitioner advances two arguments in support of his claim that the statutes do not authorize a levy on the accrued salaries of employees of a State. First, he contends that a State is not a "person" within the meaning of 6332, and, second, he argues that Congress, by specifically authorizing in 6331 a levy "upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality" thereof, but not similarly specifically authorizing levy upon the accrued salaries or wages of [359 U.S. 108, 112] employees of a State, evinced its intention to exclude the latter from such levies.
Though the definition of "person" in 6332 does not mention States or any sovereign or political entity or their officers among those it "includes" (Note 3), it is equally clear that it does not exclude them. This is made certain by the provisions of 7701 (b) of the 1954 Internal Revenue Code that "The terms `includes' and `including' when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined." 26 U.S.C. (Supp. V) 7701 (b). Whether the term "person" when used in a federal statute includes a State cannot be abstractly declared, but depends upon its legislative environment, Ohio v. Helvering, 292 U.S. 360, 370 ; Georgia v. Evans, 316 U.S. 159, 161 . It is clear that 6332 is stated in all-inclusive terms of general application. "In interpreting federal revenue measures expressed in terms of general application, this Court has ordinarily found them operative in the case of state activities even though States were not expressly indicated as subjects of tax." Wilmette Park Dist. v. Campbell, 338 U.S. 411, 416 , and cases cited. We think that the subject matter, the context, the legislative history, and the executive interpretation, i. e., the legislative environment, of 6332 make it plain that Congress intended to and did include States within the term "person" as used in 6332.
Nor is there merit in petitioner's contention that Congress, by specifically providing in 6331 for levy upon the accrued salaries of federal employees, but not mentioning state employees, evinced an intention to exclude the latter from levy. The explanation of that action by Congress appears quite clearly to be that this Court had held in Smith v. Jackson, 246 U.S. 388 , that a federal disbursing officer might not, in the absence of express congressional authorization, set off an indebtedness of a federal employee [359 U.S. 108, 113] to the Government against the employee's salary, and, pursuant to that opinion, the Comptroller General ruled that an "administrative official served with [notices of levy] would be without authority to withhold any portion of the current salary of such employee in satisfaction of the notices of levy and distraint." 26 Comp. Gen. 907, 912 (1947). It is evident that 6331 was enacted to overcome that difficulty and to subject the salaries of federal employees to the same collection procedures as are available against all other taxpayers, including employees of a State.
Accordingly we hold that 6331 and 6332 authorize levy upon the accrued salaries of state employees for the collection of any federal tax.
This brings us to petitioner's contention that even if the salaries of state employees are subject to levy, he is not personally liable to the Government for refusing to honor its levies because, contrary to the holding of the courts below, he was not a person "obligated with respect to" the salaries covered thereby. Congress did not define the questioned phrase, nor do we feel called upon here to delimit its scope, for we think it includes, at least, a person who has the sole power to control disposition of the fund, and we also think that, under the West Virginia law, petitioner both had and exercised that power. By a West Virginia statute, 1 W. Va. Code, 1955, 1031 (1), he was empowered and obligated to deduct and withhold from the salaries of state employees sums "to pay taxes as may be required by an act or acts of the congress of the United States of America"; and, similarly, another West Virginia statute, 2 W. Va. Code, 1955, 3834 (18), authorizes garnishments to be served upon him to sequester the salaries of state employees. He alone has the obligation and power to issue warrants for the payment of salaries, and state employees entitled to payment for services may enforce their rights by mandamus against him. State [359 U.S. 108, 114] ex rel. Board of Governors of West Virginia University v. Sims, 133 W. Va. 239, 55 S. E. 2d 505; State ex rel. Board of Governors of West Virginia University v. Sims, 136 W. Va. 789, 68 S. E. 2d 489; State ex rel. Board of Governors of West Virginia University v. Sims, 140 W. Va. 64, 82 S. E. 2d 321. By and to the extent of these West Virginia laws petitioner was obligated and empowered in respect to the sequestered salaries. These laws empowered him completely to control the disposition of that fund. He exercised that power by refusing to honor the Government's valid levies and to surrender the fund to the Government. Instead he surrendered the fund to the taxpayers. That action by petitioner resulted in defeat of the Government's valid levies.
Upon these principles four judges who are constantly required to pass upon West Virginia laws have held that, under the law of that State, petitioner is a person who was obligated with respect to the salaries covered by the Government's levies. Their conclusion appears to be founded on reason and authority, and under familiar principles will be accepted here. Propper v. Clark, 337 U.S. 472, 486 -487. Being a person who, under the law of West Virginia, was obligated with respect to the salaries covered by the Government's levies, petitioner is, by 6332 (b), made personally liable to the Government in a sum equal to the amount, not exceeding the delinquent taxes, which he refused to surrender to the Government but surrendered instead to the taxpayers in defeat of the Government's levies. The judgment of the Court of Appeals was therefore correct and must be
[ Footnote 2 ] The assessment against each of the taxpayers substantially exceeded in amount the accrued salary owing to each at the time of the levies.
[ Footnote 3 ] 26 U.S.C. (Supp. V) 6332 provides:
[ Footnote 4 ] Glass City Bank v. United States, 326 U.S. 265, 268 ; United States v. Long Island Drug Co., 115 F.2d 983, 986 (C. A. 2d Cir.); 9 Mertens, Law of Federal Income Taxation (Rev.), 49.205.
[ Footnote 5 ] The only property exempt from levy is that listed in 6334 (a) of the 1954 Internal Revenue Code, 26 U.S.C. (Supp. V) 6334 (a), consisting of certain personal articles and provisions. It does not exempt salaries or wages.
[ Footnote 6 ] Section 301.6331-1 (a) (4) (ii) of Treasury Regulations relating to Seizure of Property for Collection of Taxes (1954), 26 CFR (revised as of January 1, 1958) 301.6331-1 (a) (4) (ii), in pertinent part, provides: