Jefferson County v. Acker ( 1995 )


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  •                     United States Court of Appeals,
    
                               Eleventh Circuit.
    
                                     No. 94-6400.
    
        JEFFERSON COUNTY, a political subdivision of the State of
    Alabama, Plaintiff-Appellant,
    
                                            v.
    
               William M. ACKER, Jr., Defendant-Appellee.
    
        JEFFERSON COUNTY, a political subdivision of the State of
    Alabama, Plaintiff-Appellant,
    
                                            v.
    
                        U.W. CLEMON, Defendant-Appellee.
    
                                    Aug. 30, 1996.
    
    Appeals from the United States District Court for the Northern
    District of Alabama. (Nos. CV93-M-69-S and CV93-M-196-S) Charles A.
    Moye, Jr., Judge.
    
    Before TJOFLAT, Chief Judge, KRAVITCH, HATCHETT, ANDERSON,
    EDMONDSON, COX, BIRCH, DUBINA, BLACK, CARNES and BARKETT, Circuit
    Judges, and HENDERSON*, Senior Circuit Judge.
    
         COX, Circuit Judge:
    
         We decide in this case whether Jefferson County, Alabama, may
    
    impose on federal judges holding office under Article III of the
    
    Constitution1   a   tax   for    the    privilege   of   engaging   in   their
    
    occupation within the county.          We hold that such a tax violates the
    
    
    
    
         *
          Senior U.S. Circuit Judge Henderson elected to participate
    in this decision pursuant to 28 U.S.C. § 46(c).
         1
          Article III of the Constitution vests the judicial power of
    the United States in the Supreme Court "and in such inferior
    Courts as the Congress may from time to time ordain and
    establish." U.S. Const. art. III, § 1. Article III judges
    include federal district court judges, judges for the circuit
    courts of appeals, and justices of the Supreme Court.
    Supremacy Clause of the Constitution.2
    
                           I. FACTS AND PROCEDURAL HISTORY
    
           Jefferson County, Alabama, sued William M. Acker, Jr., and
    
    U.W.       Clemon,   United   States    District    Judges   for   the   Northern
    
    District of Alabama, to recover delinquent county taxes due under
    
    Jefferson County Ordinance No. 1120.           Ordinance No. 1120 imposes a
    
    license or privilege tax (the "privilege tax") on persons not
    
    otherwise required to pay any license or privilege tax to the State
    
    of Alabama or Jefferson County.           The ordinance provides:
    
           It shall be unlawful for any person to engage in or follow any
           vocation, occupation, calling or profession ... within the
           County on or after the 1st day of January, 1988, without
           paying license fees to the County for the privilege of
           engaging in or following such vocation, occupation, calling or
           profession, which license fees shall be measured by one-half
           percent (1/2%) of the gross receipts of each such person.
    
    Jefferson County, Ala., Ordinance No. 1120, § 2 (Sept. 29, 1987).
    
           The    ordinance   defines      "vocation,   occupation,     calling   and
    
    profession" to include the holding of any kind of office, by
    
    election or appointment, by any federal, state, county, or city
    
    officer or employee where the officer's or employee's services are
    
    rendered within Jefferson County.            Id. § 1(C).3     It is undisputed
    
           2
          Given the nature of the question presented in this case, we
    considered the issue of recusal at the outset. Our discussion of
    the recusal issue is included as an appendix.
           3
          The ordinance also includes the following definition of
    "vocation, occupation, calling and profession":
    
                   The words "vocation, occupation, calling and
                   profession" shall mean and include the doing of any
                   kind of work, the rendering of any kind of personal
                   services, or the holding of any kind of position or job
                   within Jefferson County, Alabama, by any clerk,
                   laborer, tradesman, manager, official or other
                   employee, including any non-resident of Jefferson
                   County who is employed by any employer as defined in
    that       the     ordinance   facially     applies   to    federal   judges.
    
    Non-residents of Jefferson County performing work in Jefferson
    
    County must pay the privilege tax.          See id.   § 1(B).   The ordinance
    
    defines "gross receipts," by which it measures the privilege tax,
    
    as the total gross amount of all salaries, wages, or other monetary
    
    payments of any kind which a person receives or is entitled to
    
    receive for work or services.             Id. § 1(F).4     If compensation is
    
    earned from work both inside and outside Jefferson County, the
    
    privilege tax is based on the proportion of work performed within
    
    Jefferson County.         Id. § 3.   The computation of the percentage of
    
    work done within Jefferson County must be supported by oath.              Id.
    
    
                     this section, where the relationship between the
                     individual performing the services and the person for
                     whom such services are rendered is, as to those
                     services, the legal relationship of employer and
                     employee, including also a partner of a firm or an
                     officer of a firm or corporation, if such partner or
                     officer receives a salary for his personal services
                     rendered in the business of such firm or corporation,
                     but they shall not mean or include domestic servants
                     employed in private homes and shall not include
                     businesses, professions or occupations for which
                     license fees are required to be paid under any General
                     License Code of the County or to the State of Alabama
                     or the County by any of the following [listing sections
                     of the Code of Alabama].
    
           Ordinance No. 1120, § 1(B).
           4
            Ordinance No. 1120, § 1(F) provides:
    
                     The words "gross receipts" and "compensation" shall
                     have the same meaning, and both words shall mean and
                     include the total gross amount of all salaries, wages,
                     commissions, bonuses or other money payment of any
                     kind, or any other considerations having monetary
                     value, which a person receives from or is entitled to
                     receive from or be given credit for by his employer for
                     any work done or personal services rendered in any
                     vocation, occupation, calling or profession, including
                     any kind of deductions before "take home" pay is
                     received ...
          The ordinance requires employers to withhold privilege taxes,
    
    to file returns with the Director of Revenue, and to keep and
    
    maintain    certain     records      for   five     years.      Id.    §   4.      The
    
    Administrative     Office     of    the    United    States    Courts      has   never
    
    withheld Jefferson County privilege taxes from the salary of any
    
    federal    judge   or      court    employee.       Under     the    ordinance,    an
    
    employer's failure to withhold the privilege tax does not relieve
    
    employees from the obligation to pay.                 Id.      An employee whose
    
    employer has failed to comply with the ordinance must file a return
    
    and pay the privilege tax.           Id. § 5.
    
          The ordinance grants certain investigative powers to the
    
    Jefferson County Director of Revenue.               These include the power to
    
    examine the books, records, and papers of any employer or licensee
    
    to determine the accuracy of any return or to determine the amount
    
    of privilege taxes due if no return was filed, as well as the power
    
    to examine any person under oath concerning any gross receipts
    
    which were or should have been shown in a return.                     Id. § 7.     The
    
    Director    of   Revenue     also    may   promulgate       regulations      for   the
    
    administration and enforcement of the ordinance.                    Id. § 8.
    
          The ordinance imposes interest and penalties for the failure
    
    to pay privilege taxes and the failure to withhold privilege taxes.
    
    Id.   §   10(A).      In    addition,      the   ordinance     alludes     to    other
    
    punishment for failing to comply with its requirements:
    
          Any person or employee who shall fail, neglect or refuse to
          pay a license fee ... or any employer who shall fail to
          withhold said license fees, or to pay over to County such
          license fees ..., or any person required to file a return ...
          who shall fail, neglect or refuse to file such return, or any
          person or employer who shall refuse to permit the Director of
          Revenue or any agent or employee designated by him ... to
          examine his books, records and papers for any purpose
           authorized by this Ordinance ... shall upon conviction be
           subject to punishment within the limits of and as provided by
           law for each offense. Such punishment shall be in addition to
           the penalties imposed under subsection (A) of this section.
    
    Id.    § 10(B). Alabama law provides that each violation 5 of a city
    
    or town ordinance requiring the payment of privilege taxes is
    
    punishable by a fine, as prescribed by the ordinance, of up to
    
    $500, by up to six months imprisonment, or by both.              Alabama Code
    
    § 11-51-93 (1989). Alabama law does not appear to provide criminal
    
    sanctions for violating county ordinances requiring the payment of
    
    privilege taxes.
    
           At    least    three   other   local   governments   in   Alabama   have
    
    ordinances requiring the payment of license or privilege taxes.
    
    The Cities of Gadsden and Birmingham, in the Northern District of
    
    Alabama,6 and Auburn, in the Middle District of Alabama, have
    
    ordinances almost identical to Jefferson County's, though their
    
    ordinances tax gross receipts at a higher rate and, because they
    
    are city ordinances, are backed by criminal penalties under Alabama
    
    law.        See id.     Counsel for Jefferson County told us at oral
    
    argument that Jefferson County simply copied Birmingham's ordinance
    
    when enacting Ordinance No. 1120.
    
           Judge Acker and Judge Clemon maintain their principal offices
    
    in the Hugo Black Federal Courthouse in Birmingham, Alabama, which
    
    lies within Jefferson County.          They routinely perform some but not
    
    all of their duties outside of Jefferson County.            Judges Acker and
    
    
           5
          Each day one works without a license constitutes a separate
    offense. Alabama Code § 11-51-93 (1989).
           6
          The Northern District of Alabama holds court in both
    Birmingham and Gadsden. 28 U.S.C. § 81 (a)(3) and (6).
    Clemon have refused to pay the privilege tax imposed by the
    
    ordinance.    Before the district court's opinion in this case, all
    
    other active judges of the Northern District of Alabama paid the
    
    privilege tax on differing percentages of their judicial salaries
    
    without supporting those percentages by an oath or any formal
    
    accounting procedure.     In addition, all state judges with offices
    
    in Jefferson County have paid the privilege tax based on portions
    
    of their salaries.
    
         Jefferson County sued Judge Acker and Judge Clemon in state
    
    court    to   recover   delinquent    privilege   taxes   due   under   the
    
    ordinance. Each judge removed his case to federal court, where the
    
    cases were consolidated.     The parties stipulated to the facts and
    
    submitted cross-motions for summary judgment.
    
         The district court7 held that, under the intergovernmental tax
    
    immunity doctrine, the ordinance is unconstitutional as applied to
    
    Judge Acker and Judge Clemon.        The court concluded that the legal
    
    incidence of the privilege tax falls on the federal judicial
    
    function.      Jefferson County v. Acker, 
    850 F. Supp. 1536
    , 1543
    
    (N.D.Ala.1994).     According to the court, the privilege tax, "by
    
    express intention and in real effect, is a franchise tax imposed
    
    upon the federal judicial operations and is unconstitutional as a
    
    direct tax upon an officer and instrumentality of the United
    
    States, that is, upon the sovereign itself."         Id. at 1545-46.
    
            The district court also held that applying the ordinance to
    
    Judges Acker and Clemon violates the Compensation Clause of Article
    
    
         7
          The Honorable Charles A. Moye, Jr., U.S. District Judge for
    the Northern District of Georgia, sitting by designation.
    III.8       Id. at 1547.       The privilege tax diminishes a judge's
    
    compensation, rather than taxing his salary, the court held,
    
    because      its   incidence   "is   upon    the   performance   of    judicial
    
    functions by a judicial officer, antecedent to the point that the
    
    salary therefor having been paid by the government becomes the
    
    property of the individual citizen of Alabama."               Id. at 1547-48.
    
    Jefferson County appealed.9
    
            A panel of this court reversed, holding that the ordinance may
    
    be   applied       to   Article   III     judges    without   violating       the
    
    intergovernmental tax immunity doctrine or the Compensation Clause.
    
    Jefferson County v. Acker, 
    61 F.3d 848
     (11th Cir.1995).                      Chief
    
    Judge Tjoflat dissented.          The panel majority disagreed with the
    
    district court's conclusion that the ordinance taxes the federal
    
    judicial     function.      The   panel     majority   determined     that   "the
    
    practical effect of [the ordinance] is to tax the income that
    
    federal judges derive from the performance of their judicial
    
    functions," not "to impose a license tax as a precondition to the
    
    performance of those functions."              Id. at 855.      And the panel
    
    majority determined that federal judges are federal officers rather
    
    than arms of the federal government.            Id. at 853.    Therefore, the
    
    panel held, the ordinance does not directly tax the operations of
    
            8
          The Compensation Clause provides that Article III judges
    "shall, at stated Times, receive for their Services, a
    Compensation, which shall not be diminished during their
    Continuance in Office." U.S. Const. art. III, § 1.
            9
          The district court also held that the ordinance does not
    discriminate against Judges Acker and Clemon by reason of the
    federal source of their compensation in violation of the Public
    Salary Act, 4 U.S.C. § 111. On this appeal, there is no
    contention that this holding was erroneous and, in light of our
    disposition of the case, we do not address it.
    the federal government in violation of the intergovernmental tax
    
    immunity doctrine.       Id. at 856.
    
         Also based on its determination that the practical effect of
    
    the privilege tax is that of an income tax, the panel majority held
    
    that the Compensation Clause does not bar applying the ordinance to
    
    federal judges.        Id.    According to the panel majority, "[i]t is
    
    well established that the Compensation Clause does not forbid ...
    
    levying an income tax on federal judges."              Id.     (citing O'Malley v.
    
    Woodrough, 
    307 U.S. 277
    , 282, 
    59 S. Ct. 838
    , 840, 
    83 L. Ed. 1289
    
    (1939)).
    
         Judges Acker and Clemon filed a suggestion for rehearing en
    
    banc.      Recognizing       this   case    to   involve     legal   questions   and
    
    principles of exceptional importance, we granted rehearing en banc
    
    to determine whether the ordinance constitutionally may be applied
    
    to Article III judges.
    
                                  II. ISSUES ON APPEAL
    
         Two issues have been raised on appeal:                   (1) whether the tax
    
    imposed by Ordinance No. 1120 constitutes an unconstitutional
    
    diminution in the compensation of Article III judges;                       and (2)
    
    whether    the   tax    imposed     by     Ordinance   No.    1120    violates   the
    
    Supremacy Clause as an intergovernmental tax. Because we hold that
    
    the Supremacy Clause bars the application of the ordinance to
    
    federal    judges,      we    do    not     address    whether       the   ordinance
    
    unconstitutionally diminishes federal judges' compensation.
    
                           III. CONTENTIONS OF THE PARTIES
    
         Jefferson County contends that the district court erred in
    
    holding that the intergovernmental tax immunity doctrine prohibits
    imposing the privilege tax on federal judges.                Jefferson County
    
    argues that the Public Salary Act and the Buck Act waived the tax
    
    immunity    of   federal     officers,    including     federal    judges,   with
    
    respect to all taxes except discriminatory taxes.                   Because the
    
    privilege    tax    is   not    discriminatory,     the   County    argues,   it
    
    constitutionally may be applied to federal judges.
    
         The County further contends that, even if Congress's waiver of
    
    federal tax immunity does not apply to the privilege tax, the
    
    intergovernmental tax immunity doctrine bars only those state taxes
    
    levied directly on the federal government itself.10               The privilege
    
    tax, the County argues, is not levied directly on the federal
    
    government.        Rather,     it   is   imposed   on   individuals,   who    are
    
    employees of the federal government as opposed to its agencies or
    
    instrumentalities.       The County argues that Judges Acker and Clemon
    
    have conceded their tax immunity argument by admitting that they
    
    are subject to the Alabama state income tax:                      if they were
    
    instrumentalities of the federal government, tax immunity would
    
    shield them not only from the privilege tax but also from state
    
    income taxes.
    
         Judges Acker and Clemon contend that Congress has not waived
    
    their federal tax immunity from the privilege tax. They argue that
    
    the privilege tax violates the intergovernmental tax immunity
    
    doctrine because the legal incidence of the privilege tax is not on
    
    
         10
          The County recognizes that the intergovernmental tax
    immunity doctrine also bars taxes that discriminate against the
    federal government. But the dispute on this appeal does not
    center on whether the privilege tax is discriminatory and, in
    light of our disposition of the case, we do not address whether
    the privilege tax is discriminatory.
    the individual judge but on the performance of the federal judicial
    
    function.    The judges contend that a federal judge is the federal
    
    court when performing judicial duties.           The judges contend that
    
    state law is determinative of the legal incidence of the privilege
    
    tax.   When state law demonstrates that a tax is levied on a federal
    
    function, they argue, the practical effect of the tax need not be
    
    considered.      Judges   Acker   and   Clemon    also   argue   that   the
    
    ordinance's onerous time-keeping and return requirements burden the
    
    federal judicial function.
    
                                IV. DISCUSSION
    
           We are presented with an issue of first impression.              The
    
    parties have not cited, and we have not found, any federal case
    
    addressing whether the intergovernmental tax immunity doctrine
    
    prohibits a state or local government from imposing a privilege tax
    
    on Article III judges.
    
           We begin our analysis with an examination of the contours of
    
    the intergovernmental tax immunity doctrine, mindful that the
    
    nature of the tax and the identity of the taxpayer here differ
    
    significantly from the taxes and taxpayers at issue in previous
    
    intergovernmental tax immunity cases.      Then we apply the doctrine
    
    to the judges' challenge to the Jefferson County privilege tax.
    
    Finally, we determine whether the Public Salary Act and the Buck
    
    Act have altered the intergovernmental tax immunity doctrine's
    
    limits on state and local taxation so as to permit the imposition
    
    of the privilege tax on federal judges.
    
    A. The Intergovernmental Tax Immunity Doctrine
    
           The purpose of the intergovernmental tax immunity doctrine is
    to forestall "clashing sovereignty."              United States v. New Mexico,
    
    
    455 U.S. 720
    , 735, 
    102 S. Ct. 1373
    , 1383, 
    71 L. Ed. 2d 580
     (1982)
    
    (quoting McCulloch v. Maryland, 4 Wheat 316, 430, 
    4 L. Ed. 579
    
    (1819)).    Born of Chief Justice Marshall's opinion in McCulloch v.
    
    Maryland, and aphoristically expressed in Marshall's famous dictum
    
    "the     power    to     tax   involves     the    power   to   destroy,"   the
    
    intergovernmental tax immunity doctrine seeks to reconcile states'
    
    sovereign taxing authority with the Supremacy Clause's protection
    
    of federal operations from state interference.              See generally New
    
    Mexico, 455 U.S. at 730-36, 102 S.Ct. at 1380-1383;                   Paul J.
    
    Hartman, Federal Limitations on State and Local Taxation §§ 6:1-
    
    6:15 (1981).      The Supreme Court's attempt to fashion a doctrine
    
    accommodating these competing constitutional imperatives "has been
    
    marked     from    the     beginning      by   inconsistent     decisions   and
    
    increasingly delicate distinctions."              New Mexico, 455 U.S. at 730,
    
    102 S.Ct. at 1380-81.
    
           For over a century, the Supreme Court treated Marshall's
    
    famous dictum as a constitutional mandate, Graves v. New York ex
    
    rel. O'Keefe, 
    306 U.S. 466
    , 489, 
    59 S. Ct. 595
    , 602, 
    83 L. Ed. 927
    
    (1939) (Frankfurter, J., concurring), finding in case after case
    
    that   nondiscriminatory        state     taxes   potentially   affecting   the
    
    federal government—even taxes imposed on private parties dealing
    
    with the government—threatened to disrupt federal operations.               The
    
    Court thus struck down, for example, state income taxes on federal
    
    employees, Dobbins v. Commissioners of Erie County, 41 U.S. (16
    
    Pet.) 435, 
    10 L. Ed. 1022
     (1842), and state sales taxes on private
    
    companies' sales to the federal government, Panhandle Oil Co. v.
    Mississippi ex rel. Knox, 
    277 U.S. 218
    , 
    48 S. Ct. 451
    , 
    72 L. Ed. 857
    
    (1928).    The theory was that such taxes might increase the cost to
    
    the federal government of performing its functions.          United States
    
    v. County of Fresno, 
    429 U.S. 452
    , 460, 
    97 S. Ct. 699
    , 703, 
    50 L. Ed. 2d 683
     (1977).
    
          The theory that a nondiscriminatory tax unconstitutionally
    
    interferes with federal functions simply because it imposes an
    
    economic burden on the federal government was abandoned in James v.
    
    Dravo Contracting, 
    302 U.S. 134
    , 
    58 S. Ct. 208
    , 
    82 L. Ed. 155
     (1937).
    
    There, the Court assumed that a state gross receipts tax levied on
    
    a federal contractor increased the cost to the government of the
    
    contractor's services, but held that the tax nevertheless did not
    
    interfere in any substantial way with the performance of federal
    
    functions.      Id. at 160, 58 S.Ct. at 221.          Dravo signalled the
    
    beginning of the end of constitutional tax immunity for private
    
    parties dealing with the federal government. Thus, two years later
    
    the Court overruled Dobbins, which had immunized federal employees
    
    from state income taxes, declaring that any economic burden on the
    
    government from an income tax on a government employee is "but the
    
    normal incident of the organization within the same territory of
    
    two governments, each possessing the taxing power," and a burden
    
    "which the Constitution presupposes."           Graves v. New York ex rel.
    
    O'Keefe, 
    306 U.S. 466
    , 487, 
    59 S. Ct. 595
    , 601, 
    83 L. Ed. 927
     (1939)
    
    ("O'Keefe ").
    
          The O'Keefe Court focused its analysis on whether an income
    
    tax   on   a   federal   employee   obstructs    or   interferes   with   the
    
    performance of federal functions.        Id. at 477, 481, 484, 59 S.Ct.
    at 597, 599, 600.    Earlier cases granting immunity from income
    
    taxes, the Court said, failed to consider whether such taxes
    
    interfered with government functions;   they just assumed that the
    
    immunity of the government and its instrumentalities extended to
    
    employees of those entities.   Id. at 481, 59 S.Ct. at 599.    But
    
    "[t]he theory ... that a tax on income is legally or economically
    
    a tax on its source [was] no longer tenable" after Dravo.   Id. at
    
    480, 59 S.Ct. at 598.   Thus not willing to assume any burden on
    
    government functions, id. at 486, 59 S.Ct. at 601, the court
    
    examined whether an income tax indeed interfered with government
    
    functions.   The Court found no burden on federal functions other
    
    than the economic burden that may be passed on to the government in
    
    the form of higher labor costs.     Id. at 481, 59 S.Ct. at 598.
    
    Concluding that such a burden does not amount to an interference
    
    with the performance of federal functions, the Court upheld the
    
    imposition of state income taxes on federal employees. Id. at 487,
    
    59 S.Ct. at 601.
    
         Later cases similarly recognized that the economic burden on
    
    the federal government of nondiscriminatory state taxes imposed on
    
    those dealing with the federal government generally does not
    
    threaten to impede the performance of federal functions.      E.g.,
    
    South Carolina v. Baker, 
    485 U.S. 505
    , 521, 
    108 S. Ct. 1355
    , 1366,
    
    
    99 L. Ed. 2d 592
     (1988) (noting that tax's entire financial burden
    
    may fall on government without rendering tax unconstitutional);
    
    New Mexico, 455 U.S. at 734, 102 S.Ct. at 1382 (noting that no
    
    immunity arises from federal government shouldering tax's entire
    
    economic burden);   County of Fresno, 429 U.S. at 462, 97 S.Ct. at
    704-705 (noting that economic burden on federal function does not
    
    render      tax   unconstitutional).       With     this   recognition,   the
    
    intergovernmental tax immunity doctrine has become somewhat more
    
    attuned to the practical realities of our federal system.             But the
    
    test for determining whether a nondiscriminatory tax interferes
    
    with the federal government's functions remains highly formalistic.
    
            Current intergovernmental tax immunity doctrine asks whether
    
    the "legal incidence," as opposed to the economic burden, of the
    
    tax     falls     directly   on    the     federal     government    or   its
    
    instrumentality.       See New Mexico, 455 U.S. at 735, 102 S.Ct. at
    
    1383;    County of Fresno, 429 U.S. at 464, 97 S.Ct. at 705.                A
    
    nondiscriminatory state or local tax is unconstitutional only "when
    
    the levy falls on the United States itself, or on an agency or
    
    instrumentality so closely connected to the Government that the two
    
    cannot realistically be viewed as separate entities, at least
    
    insofar as the activity being taxed is concerned." New Mexico, 455
    
    U.S. at 735, 102 S.Ct. at 1383.           To be an instrumentality of the
    
    government, a taxed entity must be "so intimately connected with
    
    the exercise of a power or the performance of a duty by the
    
    Government that taxation of it would be a direct interference with
    
    the functions of government itself."             Id. (citations and internal
    
    quotation marks omitted).
    
          The    "legal   incidence"   test    has    significantly   constricted
    
    federal intergovernmental tax immunity.            Indeed, the Supreme Court
    
    has characterized the current doctrine's prohibition against taxes
    
    legally incident on the federal government or its instrumentalities
    
    as of "essentially symbolic importance, as the visible "consequence
    of that [federal] supremacy which the constitution has declared.'
    
    "   New Mexico, 455 U.S. at 735, 102 S.Ct. at 1383 (quoting
    
    McCullough v. Maryland, 4 Wheat at 436).                   Relegation of the
    
    doctrine to largely symbolic importance is not surprising in light
    
    of the recognition that the economic burden of nondiscriminatory
    
    state taxes does not threaten the government's operations.                   After
    
    all, by its very essence, a tax imposes an economic burden.               If the
    
    Constitution presupposes such an economic burden, then few taxes
    
    will violate the intergovernmental tax immunity doctrine.
    
         We do not mean to gainsay the intergovernmental tax immunity
    
    doctrine's importance in our federal system.               Though it has been
    
    narrowed and beset by formalism, the doctrine has continuing
    
    vitality.      Our   point   is    that   the    reason   for   the   doctrine's
    
    contraction must be appreciated to understand the scope of the
    
    doctrine's continuing vitality. The doctrine's contraction stemmed
    
    not from a weakening of the principle that, under the Supremacy
    
    Clause, states may not burden or interfere with federal operations,
    
    but from the recognition that nondiscriminatory taxes levied on
    
    private parties generally do not impede federal operations.                    The
    
    intergovernmental tax immunity doctrine still prohibits any state
    
    or local tax that burdens or interferes with federal operations.
    
         Mindful of the underlying purpose of intergovernmental tax
    
    immunity, the doctrine's history, and the "actual workings of our
    
    federalism,"    O'Keefe,     306     U.S.   at     490,   59    S.Ct.   at    603
    
    (Frankfurter, J., concurring), we turn to whether the Jefferson
    
    County privilege tax constitutionally may be levied on Judges Acker
    
    and Clemon.
    B. The Federal Judges' Challenge to the Privilege Tax
    
          Judge Acker and Judge Clemon's challenge to the privilege tax
    
    differs substantially from most intergovernmental tax immunity
    
    challenges.     As far as we can tell, Judges Acker and Clemon are the
    
    first      federal    judges    to   challenge    a   state   or   local   tax   on
    
    intergovernmental tax immunity grounds.                 Moreover, because the
    
    privilege tax differs from most taxes, their objection to the
    
    privilege tax is novel.           They do not allege that the privilege tax
    
    interferes with federal functions by imposing an economic burden on
    
    the   federal       government.      The   district    court   found    that     the
    
    privilege tax imposes no economic burden on the federal government
    
    itself;      it is paid by individual federal judges out of their own
    
    pockets.      Judges Acker and Clemon do not question this conclusion
    
    and, thus, do not make the economic-burden argument that now has
    
    been thoroughly repudiated by the intergovernmental tax immunity
    
    doctrine.11
    
          The burden of which Judges Acker and Clemon complain is the
    
    ordinance's requirement that they remit privilege taxes for the
    
    privilege      of    lawfully    performing      federal   judicial    duties    in
    
    Jefferson County.        Though they object to paying a tax, they do so
    
    not for the economic reasons generally associated with objections
    
    to taxes but because the tax purports to be a precondition to the
    
    lawful performance of their federal judicial duties.
    
          Jefferson County contends that the privilege tax does not
    
          11
          Purporting to eschew the economic-burden theory, some
    litigants have couched their arguments simply in terms of
    interfering with federal functions, but these challenges
    invariably have amounted to challenges to the tax's economic
    burden.
    regulate, control, or license a federal judge's performance of his
    
    duties any more than a state income tax.     If Jefferson County is
    
    correct that, despite being labelled a "license fee," the privilege
    
    tax amounts to an income tax, then it constitutionally may be
    
    applied to Judges Acker and Clemon under O'Keefe.     Thus, before
    
    attempting to ascertain the "legal incidence" of the privilege tax
    
    under the intergovernmental tax immunity doctrine, we examine the
    
    substantive nature of the privilege tax to determine whether it
    
    merely taxes the receipt of income.
    
    1. Whether the Privilege Tax Is In Substance An Income Tax
    
          To determine the nature and effect of the privilege tax, "we
    
    must look through form and behind labels to substance."     City of
    
    Detroit v. Murray Corp. of America, 
    355 U.S. 489
    , 492, 
    78 S. Ct. 458
    , 460, 
    2 L. Ed. 2d 441
     (1958).   We are the ultimate arbiters of
    
    the substance of the privilege tax.     But state law defines the
    
    attributes comprising the substance of the privilege tax.
    
          The Alabama Supreme Court has described the operational
    
    effect of a City of Auburn ordinance identical to the Jefferson
    
    County ordinance in all relevant respects.    McPheeter v. City of
    
    Auburn, 
    288 Ala. 286
    , 
    259 So. 2d 833
     (1972). Rejecting the argument
    
    that the Auburn ordinance imposed an income tax not authorized by
    
    the state constitution, Alabama's highest court explained that
    
         [t]he tax is occasioned when the taxpayer performs services
         within the Auburn city limits, and not when the taxpayer
         receives income. Therefore, the ordinance taxes the privilege
         of working and the engagement of rendering services within the
         City of Auburn, and it only measures the tax due by the amount
         of the taxpayers' gross receipts which result from such
         privilege.... It is evident that the tax is not even measured
         by a person's income, but only by his salary or wages earned.
         So in no sense can the Auburn tax be considered an income tax.
    Id. at 837.
    
          Concerned with substance, not labels, we pay no heed to the
    
    state court's conclusion that the privilege tax is not an "income
    
    tax" under state law.     In analyzing the privilege tax's natural
    
    effect, however, we accord great weight to the state court's
    
    determination of how the tax operates;        if the state court's
    
    determination is a reasonable interpretation of the ordinance, we
    
    deem it conclusive.    See Gurley v. Rhoden, 
    421 U.S. 200
    , 208, 
    95 S. Ct. 1605
    , 1610, 
    44 L. Ed. 2d 110
     (1975) (deferring to state court's
    
    reasonable determination of operating incidence of excise tax).
    
         The Alabama Supreme Court's determination of the operation of
    
    the Auburn ordinance is a reasonable interpretation of how the
    
    identical Jefferson County ordinance operates.   Our examination of
    
    the Jefferson County ordinance, within the context of Alabama law,
    
    reveals that the privilege tax is a tax on the performance of work
    
    in Jefferson County.    In substance, the privilege tax does not tax
    
    the receipt of income.
    
         The privilege tax differs fundamentally from an income tax.
    
    The ordinance purports to make it unlawful to engage in one's
    
    occupation in Jefferson County without paying the privilege tax.
    
    Ordinance No. 1120, § 2. This provision indicates that, instead of
    
    taxing the receipt of income, the privilege tax attaches to the
    
    performance of work in Jefferson County.
    
         Other provisions of the ordinance further demonstrate that the
    
    privilege tax does not merely tax the receipt of income.        The
    
    privilege tax is levied not only on income received but also on
    
    income that one is entitled to receive, id.      § 1(F), indicating
    that the ordinance is concerned with ensuring that work is taxed
    
    regardless of whether income from the work actually is received.
    
    Moreover, persons engaged in occupations or businesses for which
    
    they are required to pay state or other Jefferson County license
    
    fees are exempted from paying the privilege tax under Ordinance No.
    
    1120.     Id. § 1(B).    We do not understand why, if the ordinance is
    
    an income tax, it exempts from its requirements persons paying
    
    license fees to Jefferson County or to the State of Alabama,
    
    license fees that are totally unrelated to income.12 This exemption
    
    makes sense only if the ordinance aims to ensure that a license fee
    
    is paid to some unit of government for all work performed in
    
    Jefferson County.
    
            We hold that the Jefferson County privilege tax is not, in
    
    substance, a tax on income.       Though the privilege tax is measured
    
    by income, at least roughly, its other attributes remove it from
    
    any reasonable conception of an income tax.        Therefore, this case
    
    is not controlled by O'Keefe 's holding that income taxes do not
    
    interfere      with     federal   functions   in   violation   of   the
    
    intergovernmental tax immunity doctrine.
    
    2. The Legal Incidence of the Privilege Tax
    
              Our determination that the privilege tax does not tax the
    
    receipt of income is only the beginning of our inquiry. Regardless
    
    of what "type" of tax the privilege tax is, the intergovernmental
    
    tax immunity doctrine bars its imposition on Judges Acker and
    
    Clemon only if its legal incidence falls directly on the federal
    
         12
           Attorneys, for example, must pay a flat annual license fee
    of $250 to the state, regardless of their income. Ala.Code § 40-
    12-49.
    government or its instrumentality.     New Mexico, 455 U.S. at 735,
    
    102 S.Ct. at 1383.    Judges Acker and Clemon urge that the privilege
    
    tax falls on the federal judicial function, as the district court
    
    held.   Jefferson County contends that the privilege tax is imposed
    
    on individuals, not on the federal government or the federal
    
    judicial function.
    
            Identifying the legal incidence of the privilege tax is a
    
    question of federal law. Kern-Limerick, Inc. v. Scurlock, 
    347 U.S. 110
    , 121, 
    74 S. Ct. 403
    , 410, 
    98 L. Ed. 546
     (1954).    However, as with
    
    our determination of the nature of the privilege tax, determining
    
    the privilege tax's legal incidence requires us to identify the
    
    substantive characteristics of the privilege tax under state law.
    
    City of Detroit, 355 U.S. at 493, 78 S.Ct. at 460-61.       Then, we
    
    must evaluate the substance of the privilege tax under the federal
    
    standards for identifying a tax's legal incidence.    Kern-Limerick,
    
    347 U.S. at 121, 74 S.Ct. at 410.
    
            We hold that the legal incidence of the tax falls on the
    
    federal judge.    As the Supreme Court seems to apply the legal
    
    incidence test, the legal incidence of a tax falls on the     entity
    
    that the taxing statute identifies as the taxpayer and contemplates
    
    paying the tax.      See United States v. State Tax Commission of
    
    Mississippi, 
    421 U.S. 599
    , 607-610, 
    95 S. Ct. 1872
    , 1877-79, 
    44 L. Ed. 2d 404
     (1975);    Gurley, 421 U.S. at 203-212, 95 S.Ct. at 1608-
    
    12;   Kern-Limerick, 347 U.S. at 113-123, 74 S.Ct. at 406-411.   The
    
    ordinance identifies the person engaging in work in Jefferson
    
    County as the taxpayer and contemplates that he or she will pay the
    tax.13    Ordinance No. 1120, §§ 2, 4, 5.            Thus, the legal incidence
    
    of the privilege tax falls on Judge Acker and Judge Clemon.
    
    3. Whether Federal Judges Are Federal Instrumentalities
    
             We must determine, then, whether Judges Acker and Clemon may
    
    be considered the federal government or its instrumentalities. The
    
    district       court    concluded    that     federal    judges     are   federal
    
    instrumentalities.        Judges Acker and Clemon argue that a federal
    
    judge     is   the   federal   court   when    performing     judicial    duties.
    
    Jefferson      County    argues     that    Judges    Acker   and    Clemon   are
    
    individuals and employees of the federal government, not its
    
    instrumentalities.         According to the County, Judges Acker and
    
    Clemon cannot be instrumentalities of the government because, if
    
    they were, then they would be immune from state income taxes as
    
    well.
    
         Judges Acker and Clemon may be instrumentalities of the
    
    federal government with respect to the taxation of one activity but
    
    not another.         See New Mexico, 455 U.S. at 740-743, 102 S.Ct. at
    
    1386-87 (suggesting that an entity may be a federal instrumentality
    
    when one activity is taxed even if it is not an instrumentality
    
    when another activity is taxed).            The Supreme Court's description
    
    of what constitutes a federal instrumentality suggests that the
    
    activity being taxed may determine whether the taxpayer is a
    
    federal instrumentality.          To be an instrumentality, an entity must
    
    be "so closely connected to the Government that the two cannot
    
    realistically be viewed as separate entities, at least insofar as
    
         13
          The ordinance imposes withholding requirements on
    employers, but contemplates that the license fee will be paid by
    the person engaging in the work.
    the activity being taxed is concerned," or "so intimately connected
    
    with the exercise of a power or the performance of a duty                 by the
    
    Government that taxation of it would be a direct interference with
    
    the functions of government itself."           Id. at 735, 102 S.Ct. at 1383
    
    (citations and internal quotation marks omitted) (emphasis added).
    
         We accept that a federal judge is not an instrumentality of
    
    the federal government when the activity being taxed is the judge's
    
    receipt of income.         A judge may be no more intimately connected
    
    with the federal government when receiving income than the federal
    
    employee in O'Keefe.         The taxation of a federal judge's income may
    
    interfere   with     the   functions   of     government   no    more   than   the
    
    taxation of any other federal employee's income.                  But taxing a
    
    federal judge in the performance of his or her judicial duties is
    
    fundamentally different from taxing his or her income.
    
         When performing federal judicial duties, a federal judge
    
    performs "the functions of government itself," New Mexico, 455 U.S.
    
    at 735, 102 S.Ct. at 1383, and cannot realistically be viewed as a
    
    separate    entity    from    the   federal    court.      The   judge   is    "so
    
    intimately connected with the exercise of [federal judicial] power
    
    or the performance of a [federal judicial] duty ... that taxation
    
    of [him] would be a direct interference with the functions of
    
    government itself."        Id.   Thus, we hold that a federal judge is a
    
    federal instrumentality when the taxed activity is the judge's
    
    performance of judicial duties.
    
         We conclude, then, that the intergovernmental tax immunity
    
    doctrine bars the imposition of the Jefferson County privilege tax
    
    on Judges Acker and Clemon.         The privilege tax taxes the activity
    of working in Jefferson County.          As applied to Judges Acker and
    
    Clemon, the privilege tax taxes the performance of federal judicial
    
    duties in Jefferson County. When performing their judicial duties,
    
    Judges Acker and Clemon must be considered instrumentalities of the
    
    federal government.     The imposition of the privilege tax on Judges
    
    Acker and Clemon, therefore, amounts to a direct tax on federal
    
    instrumentalities     in    violation    of   the   intergovernmental     tax
    
    immunity doctrine.
    
         Our   conclusion      that   the   Constitution    bars    levying   the
    
    privilege tax on Judges Acker and Clemon follows not only from a
    
    formal application of the intergovernmental tax immunity doctrine
    
    but also from adherence to the doctrine's overarching purpose. The
    
    imposition of the privilege tax on federal judges is apt to lead to
    
    the clashing sovereignty that the Supremacy Clause seeks to avoid.
    
    By its very terms and in practical effect, Ordinance No. 1120 may
    
    be applied to federal judges only at the risk of interfering with
    
    the operation of the federal judiciary.
    
         According to its plain language, the ordinance makes it
    
    unlawful for a federal judge to perform his or her duties in
    
    Jefferson County without paying the privilege tax.               The County
    
    argues that Alabama counties have no power to prosecute anyone
    
    criminally for failure to pay the privilege tax. 14            While Alabama
    
    counties currently lack the power to impose criminal sanctions for
    
    failure to pay the privilege tax, the comfort that this omission
    
    
         14
          The ordinance is not backed by criminal penalties, the
    County argues, so it is "unlawful" to work without paying the
    privilege tax only in the sense that it is "unlawful" to refuse
    to pay any civil debt.
    provides may be short-lived;           the Alabama legislature could of
    
    course provide a criminal penalty provision applicable to counties
    
    like the provision applicable to cities and towns.15
    
              Regardless of whether a county possesses the power under
    
    Alabama law to make unlicensed work a crime, a federal judge in
    
    Jefferson County who for some reason fails to pay the privilege tax
    
    is deemed by Jefferson County to act unlawfully when he performs
    
    his judicial duties.      We have no doubt that, under the Supremacy
    
    Clause, Jefferson County could not enjoin or otherwise prevent a
    
    federal judge from performing federal duties.          But we believe that
    
    the Supremacy Clause protects the federal judiciary not only from
    
    outright obstruction but also from a requirement that a federal
    
    judge pay a fee to lawfully perform his or her duties.           See Mayo v.
    
    United States, 
    319 U.S. 441
    , 447, 
    63 S. Ct. 1137
    , 1140, 
    87 L. Ed. 1504
     (1943) (holding that Supremacy Clause prohibits state from
    
    requiring United States to pay privilege tax before executing a
    
    function of government);         Johnson v. Maryland, 
    254 U.S. 51
    , 57, 
    41 S. Ct. 16
    , 16-17, 
    65 L. Ed. 126
     (1920) (holding that state may not
    
    require federal postal employee to obtain state driver's license
    
    before performing official duties).           Any attempt by a state or
    
    local government to tell a federal judge what he or she must do to
    
    lawfully     perform   federal    duties   offends   elemental   notions   of
    
    
    
    
         15
          At oral argument, counsel for Jefferson County stated that
    the County appears to have copied Birmingham's privilege tax
    ordinance verbatim. Under Alabama law, a city, unlike a county,
    does have the power to criminally prosecute and punish violators
    of a license tax ordinance. Ala.Code § 11-51-93.
    federal supremacy.16
    
         In practice, any attempt to apply Ordinance No. 1120 to
    
    federal   judges   threatens   to   lead   to   clashing   sovereignty.
    
    Enforcement of the privilege tax requirement against federal judges
    
    risks intrusion into a federal judge's judicial affairs.             To
    
    determine the amount of a federal judge's privilege tax, Jefferson
    
    County must determine what percentage of the judge's duties were
    
    performed in Jefferson County.      We question whether a state or
    
    local government may inquire into precisely how and where a federal
    
    judge spends time on judicial duties; even if permissible, such an
    
    inquiry is apt to engender intergovernmental conflict.        A further
                                                                         17
    source of conflict is the practical effect of the privilege tax
    
    on federal judges' willingness to sit or otherwise perform duties
    
    in Jefferson County.
    
    
         16
          The Supreme Court has described the freedom of the federal
    courts from state interference, albeit in a different context, in
    this way:
    
              It may not be doubted that the judicial power of the
              United States as created by the Constitution ... is a
              power wholly independent of state action, and which
              therefore the several states may not by any exertion of
              authority in any form, directly or indirectly, destroy,
              abridge, limit, or render inefficacious. The doctrine
              is so elementary as to require no citation of authority
              to sustain it. Indeed, it stands out so plainly as one
              of the essential and fundamental conceptions upon which
              our constitutional system rests, and the lines which
              define it are so broad and so obvious, that ... the
              attempts to transgress or forget them have been so
              infrequent as to call for few occasions for their
              statement and application.
    
         Harrison v. St. Louis & San Francisco R.R. Co., 
    232 U.S. 318
    , 328, 
    34 S. Ct. 333
    , 335, 
    58 L. Ed. 621
     (1914).
         17
          The effect includes the burden of recordkeeping and
    disclosure requirements.
          We note that, in the performance of federal judicial duties,
    
    non-resident       federal    judges   often    are   called   upon   to   sit   in
    
    Jefferson County.            United States v. Tokars, 
    839 F. Supp. 1578
    
    (N.D.Ga.1993), is just one example.            Tokars was a federal criminal
    
    racketeering prosecution involving allegations that the murder of
    
    a young woman in front of her two children was committed by two
    
    hitmen hired by her husband, an Atlanta attorney.                 Atlanta, the
    
    case's original venue, was saturated with publicity about the case.
    
    To safeguard the defendant's constitutional right to a fair trial,
    
    a district judge for the Northern District of Georgia granted the
    
    defendant a change of venue and spent five weeks in Birmingham
    
    trying the case.         Under Ordinance No. 1120, the Atlanta-based
    
    federal judge would owe Jefferson County a percentage of her salary
    
    because she chose Birmingham as the most appropriate venue where
    
    the accused could get a fair trial.18
    
    C. Congressional Consent to State Taxation
    
          Congress generally has the power to consent to state taxation
    
    of federal employees, operations, and instrumentalities. Mayo, 319
    
    U.S. at 446, 63 S.Ct. at 1140.                 Jefferson County argues that
    
    Congress, in the Public Salary Act and the Buck Act, consented to
    
    all   forms   of    state    and   local   taxation    of   federal   employees,
    
    including federal judges. Therefore, we examine whether the Public
    
    Salary Act and the Buck Act constitute consent to the imposition of
    
    the privilege tax on federal judges. The district court held that,
    
    
          18
          When questioned at oral argument about whether the Tokars
    judge owes the privilege tax for trying the case in Birmingham,
    counsel for Jefferson County replied: "Under ordinance yes, I
    believe she does, I believe she does."
    under Article III, Congress may not consent to the imposition of
    
    the privilege tax on federal judges. Because we find that Congress
    
    did not consent to the imposition of the privilege tax on federal
    
    judges, we need not address Congress's power to do so.
    
    1. Public Salary Act
    
          The Public Salary Act provides in relevant part:
    
         The United States consents to the taxation of pay or
         compensation for personal service as an officer or employee of
         the United States, a territory or possession or political
         subdivision thereof, the government of the District of
         Columbia, or an agency or instrumentality of one or more of
         the foregoing, by a duly constituted taxing authority having
         jurisdiction, if the taxation does not discriminate against
         the officer or employee because of the source of the pay or
         compensation.
    
    4 U.S.C. § 111.         The Public Salary Act does not define the
    
    "taxation of pay or compensation for personal service" to which the
    
    United   States   consents.     The    County   contends   that   Congress
    
    consented   to    the   imposition    on   federal   employees     of   all
    
    nondiscriminatory       state    and       local     taxes,       including
    
    nondiscriminatory privilege taxes.
    
         We do not interpret the Public Salary Act's consent to state
    
    taxation of federal employees' compensation as encompassing the
    
    imposition of privilege taxes such as Jefferson County's.               The
    
    Public Salary Act must be read in light of the uncertain state of
    
    the intergovernmental tax immunity doctrine at the time of the
    
    Act's enactment.    Before the Act was proposed, the Supreme Court
    
    held that the federal government could levy nondiscriminatory taxes
    
    on the incomes of state employees.         Davis v. Michigan Dept. of
    
    Treasury, 
    489 U.S. 803
    , 811-814, 
    109 S. Ct. 1500
    , 1505-06, 
    103 L. Ed. 2d 891
     (1989) (describing context of Act's enactment).             The
    primary purpose of the Act was to amend the federal tax code to
    
    clarify that the federal income tax applied to the income of all
    
    state and local government employees.                 Id. at 811, 109 S.Ct. at
    
    1505. See also H.R.Rep. No. 26, 76th Cong., 1st Sess., 3-4 (1939);
    
    S.Rep. No. 112, 76th Cong., 1st Sess. 11 (1939).
    
         Congress      was    concerned,       however,    that    considerations     of
    
    fairness    dictated      equal     tax    treatment    of    federal   and    state
    
    employees.    Davis, 489 U.S. at 812, 109 S.Ct. at 1506.                The Supreme
    
    Court had decided Dravo but had not yet held in O'Keefe that the
    
    intergovernmental tax immunity doctrine does not bar states from
    
    taxing the income of federal employees. Thus, Congress entertained
    
    doubts about whether states could tax federal employees' income
    
    without Congress's consent.             Id. at 811-812, 109 S.Ct. at 1506.        To
    
    ensure equal tax treatment of all government employees, therefore,
    
    Congress decided to consent to state and local taxation of federal
    
    employees' income.         Id. at 812, 109 S.Ct. at 1506.               Congress's
    
    consent turned out to be unnecessary;              O'Keefe was decided before
    
    the Act was enacted.              Id.     Congress nevertheless enacted the
    
    provision    consenting      to    state    and   local      taxation   of   federal
    
    employees'    compensation,         effectively       codifying   the    result   in
    
    O'Keefe.     Id.
    
         The context of the Act's enactment thus reveals that Congress
    
    intended to consent to state taxation of federal employees' income
    
    to reciprocate for the imposition of the federal income tax on
    
    state employees.         The Act does not consent to all state taxes on
    
    federal employees.        We discern no congressional intent to consent
    
    to state taxes that in substance are not taxes on income.                    Thus, we
    interpret "taxation of pay or compensation for personal service,"
    
    4 U.S.C. § 111, to refer to state taxes on income.        The Public
    
    Salary Act does not alter the intergovernmental tax immunity
    
    doctrine;     in effect, it just codifies the result in     O'Keefe.
    
    Davis, 489 U.S. at 813, 109 S.Ct. at 1506.19
    2. The Buck Act
    
              The County also contends that Congress consented to taxes
    
    such as the Jefferson County privilege tax in the Buck Act, 4
    
    U.S.C. §§ 106-110.     The Buck Act provides in relevant part:
    
         No person shall be relieved from liability for any income tax
         levied by any State, or by any duly constituted taxing
         authority therein, having jurisdiction to levy such a tax, by
         reason of his residing within a Federal area or receiving
         income from transactions occurring or services performed in
         such area; and such State or taxing authority shall have full
         jurisdiction and power to levy and collect such tax in any
         Federal area within such State to the same extent and with the
         same effect as though such area was not a Federal area.
    
    4 U.S.C. § 106(a).      Unlike the Public Salary Act, the Buck Act
    
    defines the state taxation to which the United States consents.
    
    The Buck Act defines "income tax" as "any tax levied on, with
    
    respect to, or measured by, net income, gross income, or gross
    
         19
           Our interpretation of the Public Salary Act as consenting
    only to taxes that in substance tax income is not inconsistent
    with the Third Circuit's decision in United States v. City of
    Pittsburgh, 
    757 F.2d 43
     (3rd Cir.1985). Adopting a broad reading
    of "taxation of pay or compensation," the Third Circuit held that
    the Public Salary Act consented to Pittsburgh's levy of a
    privilege tax on a court reporter's transcript fee income. Id.
    at 47. Unlike the Jefferson County privilege tax, the Pittsburgh
    privilege tax was in substance a tax on income. The Third
    Circuit found that, despite its "privilege tax" label, the
    Pittsburgh tax was "clearly a tax on gross receipts or gross
    income from the fees." Id. Though the Third Circuit did not
    discuss how it arrived at that conclusion, our examination of the
    Pittsburgh ordinance reveals that the ordinance did not include
    the factors that distinguish the Jefferson County ordinance from
    an income tax. See Pittsburgh, Pa., Ordinance No. 675 (Dec. 27,
    1968).
    receipts."   Id. § 110(c).
    
          The district court found that the privilege tax falls within
    
    the Buck Act's definition of an "income tax" because the privilege
    
    tax is measured by gross receipts.             We agree that the Buck Act's
    
    definition of "income tax" encompasses the privilege tax.                     But
    
    another provision of the Buck Act removes the privilege tax from
    
    the   Buck   Act's     consent     to     state      taxes.         Echoing   the
    
    intergovernmental tax immunity doctrine's prohibition against state
    
    taxes levied directly on the federal government, the Buck Act
    
    provides that its provisions "shall not be deemed to authorize the
    
    levy or collection of any tax on or from the United States or any
    
    instrumentality thereof."        Id. § 107(a).       According to the Supreme
    
    Court,    "[t]his    section   can      only    be    read    as    an   explicit
    
    congressional preservation of federal immunity from state ... taxes
    
    unconstitutional under the immunity doctrine announced by Mr. Chief
    
    Justice Marshall in McCullough v. Maryland."            State Tax Commission
    
    of Mississippi, 421 U.S. at 612, 95 S.Ct. at 1880.                 Therefore, the
    
    Buck Act does not alter the intergovernmental tax immunity doctrine
    
    or constitute consent to the privilege tax.
    
          Indeed, the Buck Act's effect on the ability of states to tax
    
    federal   employees    is   much   more   modest      than    Jefferson    County
    
    suggests.    According to its plain language, the Buck Act merely
    
    precludes a taxpayer from arguing that a state or locality lacks
    
    jurisdiction to tax her because she resides in a federal area or
    
    receives income from transactions or services in a federal area.
    
    4 U.S.C. § 106(a).     The Buck Act equalizes taxing power within and
    
    without federal areas, allowing states and localities to levy taxes
    within federal areas "to the same extent and with the same effect"
    
    as without federal areas.          Id.   The Buck Act does not, however,
    
    affect the limits on state and local taxing power in any other
    
    way.20
         The Supreme Court addressed the effect of the Buck Act on
    
    state     and   local   taxation   within   federal areas in    Howard   v.
    
    Commissioners of Sinking Fund of City of Louisville, 
    344 U.S. 624
    ,
    
    
    73 S. Ct. 465
    , 
    97 L. Ed. 617
     (1953).          In Howard, employees of a naval
    
    ordnance plant located on federal land in Louisville, Kentucky,
    
    challenged the City of Louisville's attempt to collect from them a
    
    license fee for the privilege of working in Louisville.             Id. at
    
    625, 73 S.Ct. at 466.         The Supreme Court noted that the United
    
    States had exclusive jurisdiction over the federal area, except as
    
    modified by statute.       Id. at 627, 73 S.Ct. at 467.     The Court held
    
    that the license fee was an "income tax" under the Buck Act, id. at
    
    629, 73 S.Ct. at 468, and that the Buck Act therefore granted
    
    Louisville the right to impose the license fee on the federal
    
    
         20
          The Buck Act was enacted in 1940 against the background of
    the just-enacted Public Salary Act. The Public Salary Act's
    consent to state income taxes failed to reach federal employees
    residing and working in federal areas because, without
    congressional consent, the states lacked jurisdiction to tax
    transactions occurring in federal areas. United States v.
    Lewisburg Area Sch. Dist., 
    539 F.2d 301
    , 309 (3rd Cir.1976);
    United States v. City and County of Denver, 
    573 F. Supp. 686
    , 691
    (D.Colo.1983) (citing S.Rep. No. 1625, 76th Cong., 3d Sess. 3
    (1940)). The Buck Act therefore was enacted to eliminate the
    disparity between the income tax liability of federal employees
    within federal areas and those outside federal areas. Lewisburg
    Area Sch. Dist., 539 F.2d at 309; City and County of Denver, 573
    F.Supp. at 691. It does so by eliminating immunity based solely
    on the ground that the taxpayer resides in a federal area or
    receives income from transactions or services in a federal area.
    The Act does not affect claims of tax immunity based on other
    grounds. See S.Rep. No. 1625, 76th Cong., 3d Sess. 2-3 (1940).
    employees working at the ordnance plant.    Id. at 628, 73 S.Ct. at
    
    467.   The Court explained, "By virtue of the Buck Act, the tax can
    
    be levied and collected within the federal area, just as if it were
    
    not a federal area."    Id. at 629, 73 S.Ct. at 468.
    
           The County suggests that the Buck Act authorizes Jefferson
    
    County to levy its license fee on federal judges just as the Buck
    
    Act was held in Howard to authorize Louisville to levy its license
    
    fee on federal employees of the ordnance plant.    The challenge to
    
    the Jefferson County privilege tax, however, differs significantly
    
    from the challenge in    Howard.   Judges Acker and Clemon do not
    
    contend that Jefferson County may not tax them because they work
    
    within a federal area.     Rather, they argue that, regardless of
    
    where in Jefferson County they perform their duties, Jefferson
    
    County may not levy the privilege tax on them because to do so
    
    would amount to a direct tax on instrumentalities of the federal
    
    government in violation of the intergovernmental tax immunity
    
    doctrine.    The federal employees in Howard, in contrast, did not
    
    contend that the license fee directly taxed the federal government.
    
    They challenged the license fee solely on the one ground barred by
    
    the Buck Act—that Louisville lacked jurisdiction to tax in a
    
    federal area—and the Supreme Court addressed only that ground.
    
    Thus, Howard does not address the issue presented here.
    
           Nothing in Howard undermines our conclusion that the Buck Act
    
    does not alter the intergovernmental tax immunity doctrine's limits
    
    on state and local taxation.    Howard cannot be read, for example,
    
    as an implicit rejection of intergovernmental tax immunity from
    
    privilege taxes falling within the Buck Act's definition of "income
    tax."    An intergovernmental tax immunity challenge, if raised by
    
    the Howard employees, would have failed not because the Buck Act
    
    precluded such a challenge but because the Louisville license fee
    
    did not amount to a direct tax on the federal government or its
    
    instrumentalities. Assuming that the taxed activity was working in
    
    Louisville, the Howard employees could not be considered the
    
    federal government or its instrumentalities when performing their
    
    duties. Unlike federal judges, employees of a naval ordnance plant
    
    realistically can be viewed as separate entities from the federal
    
    government when performing their duties;       they are not "intimately
    
    connected with the exercise of a power or the performance of a duty
    
    by the Government."     New Mexico, 455 U.S. at 736, 102 S.Ct. at
    
    1383.    Thus, that Howard upheld the application of the Louisville
    
    license fee to federal employees does not imply that the Buck Act
    
    precludes   an   intergovernmental    tax   immunity    challenge   to   the
    
    application of Ordinance No. 1120 to federal judges.
    
                                V. CONCLUSION
    
         As applied to federal judges, the privilege tax violates the
    
    intergovernmental tax immunity doctrine as a direct tax on the
    
    federal government or its instrumentalities.           We hold, therefore,
    
    that the Supremacy Clause prohibits Jefferson County from applying
    
    Ordinance No. 1120 to Judges Acker and Clemon.
    
         AFFIRMED.
    
         ANDERSON, Circuit Judge,        dissenting,   in    which   HENDERSON,
    Senior Circuit Judge, joins:
    
         I also dissent for the several reasons set forth by Judge
    
    Birch.    I can discern no principled way to avoid the conclusion
    
    that the instant county ordinance is in substance an income tax for
    purposes of federal law. I respectfully submit that the majority's
    
    attempt to distinguish Howard v. Commissioners of Sinking Fund, 
    344 U.S. 624
    , 
    73 S. Ct. 465
    , 
    97 L. Ed. 617
     (1953), is flawed.             In Howard,
    
    the Supreme Court interpreted the Buck Act's provision that no
    
    person shall be relieved from liability for state or local income
    
    tax by reason of residing on federal property or working on federal
    
    property.     4 U.S.C.A. § 106(a).       The Supreme Court held that an
    
    almost identically worded ordinance was in substance an income tax.
    
    The majority attempts to distinguish Howard by pointing to the
    
    exclusion provision in the Buck Act—i.e. that the Buck Act shall
    
    not be deemed to authorize taxation of the "United States itself or
    
    any instrumentality thereof."        4 U.S.C.A. § 107(a).     Although the
    
    majority correctly points out that this provision confirms the
    
    continued     applicability   of   the   intergovernmental    tax    immunity
    
    doctrine, the majority's attempted distinction fails to recognize
    
    that an income tax is clearly not barred by the tax immunity
    
    doctrine and that the Buck Act and Howard indicate that the instant
    
    ordinance is in substance an income tax.
    
         Having concluded that the instant tax is as a practical matter
    
    an   income    tax,   it   follows   that   it   is   not   barred    by   the
    
    intergovernmental tax immunity doctrine because tax upon the income
                                                                     1
    of a federal employee, however important the position,               is not a
    
    
    
    
          1
          Because the instant tax is an income tax, and because a
    state or local tax upon a federal judge's income is not barred by
    the intergovernmental tax immunity doctrine, I need not address
    the majority's assertion that the acts of federal judges (in
    performing their official duties) are acts of the United States
    or an instrumentality thereof.
    tax upon the United States or an instrumentality thereof. 2                  The
    
    test       is   whether   the   tax    obstructs    or   interferes   with   the
    
    performance of the federal function.               Graves v. New York ex rel.
    
    O'Keefe, 
    306 U.S. 466
    , 477, 481, 484, 
    59 S. Ct. 595
    , 597, 598-99,
    
    600, 
    83 L. Ed. 927
     (1939).           As Judge Birch persuasively points out,
    
    the    instant      tax   neither     obstructs    nor   interferes   with   the
    
    performance of the judge's functions.              Indeed, the district court
    
    so found.
    
           I respectfully dissent.
    
         BIRCH, Circuit Judge, dissenting, in which HENDERSON, Senior
    Circuit Judge, joins:
    
           I respectfully dissent.         The linchpin of the majority opinion
    
    is that the tax at issue in this case is something other than an
    
    income tax.1       If the tax at issue is a tax on income, as defined by
    
           2
          As Judge Birch points out so forcefully, the majority
    acknowledges this.
           1
          Throughout the majority opinion, Judge Cox is steadfast and
    candid in acknowledging that should this tax be a tax on income,
    it would not run afoul of the Supremacy Clause and the
    intergovernmental tax immunity doctrine predicated thereon, to
    wit:
    
                    But "[t]he theory ... that a tax on income is legally
                    or economically a tax on its source [was] no longer
                    tenable" after [James v.] Dravo [Contracting, 
    302 U.S. 134
    , 
    58 S. Ct. 208
    , 
    82 L. Ed. 155
     (1937) ]. [Graves v.
                    New York ex rel. O'Keefe, 
    306 U.S. 466
    ] at 480, 59
                    S.Ct. [595] at 598, 
    83 L. Ed. 927
     [ (1939) ].
    
           Maj.Op. at ----.
    
                    If Jefferson County is correct that, despite being
                    labeled a "license fee," the privilege tax amounts to
                    an income tax, then it constitutionally may be applied
                    to Judges Acker and Clemon under O'Keefe.
    
           Maj.Op. at ----.
    
                         We have no doubt that a federal judge is not an
    federal law,2 the judges must pay the $668.00 per year that the
    
               instrumentality of the federal government when the
               activity being taxed is the judge's receipt of income.
               A judge is no more intimately connected with the
               federal government when receiving income than the
               federal employee in O'Keefe. The taxation of a federal
               judge's income interferes with the functions of
               government no more than the taxation of any other
               federal employee's income.
    
         Maj.Op. at ----.
    
               Congress ... enacted the provision [4 U.S.C. § 111, The
               Public Salary Act] consenting to state and local
               taxation of federal employees' compensation,
               effectively codifying the result in O'Keefe. [Davis v.
               Michigan Dept. of Treasury, 
    489 U.S. 803
     at 812, 
    109 S. Ct. 1500
     at 1506, 
    103 L. Ed. 2d 891
     (1989) ].
    
         Maj.Op. at ----.
    
               We discern no congressional intent to consent to state
               taxes that in substance are not taxes on income. Thus,
               we interpret "taxation of pay or compensation for
               personal service," 4 U.S.C. § 111, to refer to state
               taxes on income.
    
         Id.
    
               We agree that the Buck Act's [4 U.S.C. §§ 106-110]
               definition of "income tax" encompasses the privilege
               tax.
    
         Maj.Op. at ----.
         2
          In United States v. City of Pittsburgh, 
    757 F.2d 43
    , 47 (3d
    Cir.1985) the Third Circuit, in adjudicating a challenge by the
    United States to the taxation of an official court reporter
    working in the federal district court (who the panel found to be
    an officer of the court), observed:
    
                    The United States contends, however, that section
               111 does not apply because the City's tax is not a tax
               on compensation. It argues that the section applies
               only to income taxes, and that because the business
               privilege tax is not a net income tax, it is not tax on
               compensation within the meaning of section 111. For
               support, it cites F.J. Busse Co. v. City of Pittsburgh,
               
    443 Pa. 349
    , 353, 
    279 A.2d 14
    , 16 n. 1 (1971), which
               held that the City's business privilege tax is not an
               earned income tax under Pennsylvania law. However, the
               question of whether Congress consented to the
    county has levied. 3   Despite the conclusion of the majority that
    
    
              imposition of the business privilege tax is a question
              of Congressional intent, and therefore determined with
              reference to federal law. See Howard v. Comm'rs of the
              Sinking Fund, 
    344 U.S. 624
    , 628-29, 
    73 S. Ct. 465
    , 467-
              68, 
    97 L. Ed. 617
     (1953) (determination of what is an
              income tax under the Buck Act is a question of federal
              law).
    
                   Congress, in enacting section 111, intended that
              "[federal employees] should contribute to the support
              of their State and local governments, which confer upon
              them the same privileges and benefits which are
              accorded to persons engaged in private occupations."
              S.Rep.No. 112, 76th Cong. 1st Sess. 4 (1939). A broad
              reading of the meaning of "taxation on ...
              compensation" would comport with that intent. Further,
              in enacting the Public Salary Tax Act of 1939, Congress
              was aware that the states used a variety of forms of
              income taxes, including gross income taxes and
              occupational taxes. S.Rep. No. 112, 76th Cong. 1st
              Sess. 6-10 (1939). In this case, the City's tax is
              clearly a tax on gross receipts or gross income from
              the fees. We believe that the City's business
              privilege tax in this case is within the language and
              intent of section 111.
    
                   We therefore hold that if there were any federal
              constitutional immunity from the imposition of the
              City's business privilege tax on a federal court
              reporter's transcript fee income, that immunity was
              waived by Congress.
    
         (emphasis added). The majority opinion attempts to
         distinguish this case from the instant case in footnote 17
         on page ---- of its opinion.
    
              The majority professes not to be bound by the Alabama
         Supreme Court's McPheeter v. City of Auburn, 
    288 Ala. 286
    ,
         
    259 So. 2d 833
     (1972) conclusion that the privilege tax is
         not an "income tax," Maj.Op. at ----, yet, in the next
         sentence the majority asserts "... if the state court's
         determination is a reasonable interpretation of the
         ordinance, we deem it conclusive. See Gurley v. Rhoden, 
    421 U.S. 200
    , 208, 
    95 S. Ct. 1605
    , 1610 [, 
    44 L. Ed. 2d 110
    ]
         (1975)." However, Gurley had nothing to do with the
         determination of whether a state tax was an income tax for
         the purpose of federal law. Moreover, the Supreme Court
         expressly accorded great weight to the state court's
         findings regarding the legal incidence of a state tax
         strictly within the context of state law. Gurley, 421 U.S.
         at 208, 95 S.Ct. at 1610.
    this tax "may be applied to federal judges only at the risk of
    
    interfering with the operation of the federal judiciary," Maj.Op.
    
    at ----, the independence of the federal judiciary surely will
    
    survive such a tax;   as Justice Oliver Wendell Holmes (joined by
    
    Justice Louis O. Brandeis) observed:
    
         To require a man to pay the taxes that all other men have to
         pay cannot possibly be made an instrument to attack his
         independence as a judge.    I see nothing in the purpose of
         [Article III, § 1] of the Constitution to indicate that the
         judges were to be a privileged class, free from bearing their
         share of the cost of the institutions upon which their
         well-being if not their life depends.
    Evans v. Gore, 
    253 U.S. 245
    , 265, 
    40 S. Ct. 550
    , 557, 
    64 L. Ed. 887
    
    (1920) (Holmes J., dissenting).   I continue to maintain that the
    
    Jefferson County tax is not a direct tax on the federal judiciary,
    
    but is an individualized tax on the earnings of judges and all
    
    others subject to the ordinance.       Although Article III judges
    
    together compose the federal judiciary, they are also citizens of
    
    the country, state and localities where they reside. As emphasized
    
    by the Supreme Court in O'Malley v. Woodrough, 
    307 U.S. 277
    , 59
    
         3
          The annual salary of a federal district judge is
    established by law and is currently $133,600. See 28 U.S.C. §§
    135, 461 (1993). Applying the one-half percent (.005%) privilege
    tax, an annual tax of $668.00 would result. It is indeed
    sobering to reflect upon the expenditure of taxpayers' dollars
    involved in the resolution of the issue before this court. The
    legal fees and time expended by Jefferson County in order to
    recover these relatively paltry amounts should be distressing
    enough to that county's citizens. However, considering the
    expenditure of federal judicial resources (a district judge's
    initial consideration, a three-judge panel of this court, and now
    an en banc consideration by twelve judges of our court) one can
    only wonder if the principle at issue here is really all that
    significant. Common sense whispers to me that this is the
    classic tempest in a teapot involving more the clash of powerful
    egos rather than powerful principles. The outcome of this issue
    may dent the coffers of Jefferson County or a few federal judges,
    but will speak little to the separation-of-powers principle used
    to justify this considerable expenditure of public resources.
    S.Ct. 838, 
    83 L. Ed. 1289
     (1939):
    
         To suggest that [the income tax] makes inroads upon the
         independence of judges who took office after Congress had thus
         charged them with the common duties of citizenship, by making
         them bear their aliquot share of the cost of maintaining the
         Government, is to trivialize the great historic experience on
         which the framers based the safeguards of Article III, § 1.
         To subject them to a general tax is merely to recognize that
         judges are also citizens, and that their particular function
         in government does not generate an immunity from sharing with
         their fellow citizens the material burden of the government
         whose   Constitution   and   laws  they   are   charged   with
         administering.
    
    Id. at 282, 59 S.Ct. at 840 (footnote omitted).
    
         There is currently no issue before this court that suggests
    
    that the privilege tax in this case discriminates against federal
    
    employees.     The original panel opinion addressed that issue and
    
    concluded     that    the   occupational    tax   does    not     discriminate
    
    unconstitutionally against federal employees.            Jefferson County v.
    
    Acker, 
    61 F.3d 848
    , 852-53 (11th Cir.1995), vacated and rehearing
    
    en banc granted, 
    73 F.3d 1066
     (11th Cir.1996).           As noted above, the
    
    dispositive issue is whether this tax is an income tax under
    
    federal law.    In a case addressing the issue of intergovernmental
    
    tax immunity the Supreme Court admonished:
    
         [I]n passing on the constitutionality of a state tax "we are
         concerned only with its practical operation, not its
         definition or the precise form of descriptive words which may
         be applied to it." Lawrence v. State Tax Commission, 
    286 U.S. 276
    , 280, 
    52 S. Ct. 556
    , 557, 
    76 L. Ed. 1102
    . Consequently in
         determining whether these taxes violate the Government's
         constitutional immunity we must look through form and behind
         labels to substance.
    
    City of Detroit v. Murray Corp. of Amer., 
    355 U.S. 489
    , 492, 
    78 S. Ct. 458
    , 460, 
    2 L. Ed. 2d 441
     (1958).           In this case, the majority
    
    concedes that "[t]he district court found", and "Judges Acker and
    
    Clemon   do   not    question",   "that   the   privilege   tax    imposes   no
    economic burden on the federal government itself;           it is paid by
    
    individual federal judges out of their own pockets." Maj.Op. at --
    
    --;   see also Jefferson County v. Acker,         
    850 F. Supp. 1536
    , 1544
    
    (N.D.Ala.1994), rev'd 
    61 F.3d 848
     (11th Cir.1995), vacated and
    
    reh'g en banc granted,        
    73 F.3d 1066
     (11th Cir.1996).       Yet the
    
    majority concludes that the tax at issue is not one on income.
    
          The   Supreme   Court    previously   has    upheld   an   analogous
    
    ordinance, also denominated as a "license fee" by the state, as a
    
    constitutionally sound income tax.          Howard v. Commissioners of
    
    Sinking Fund, 
    344 U.S. 624
    , 
    73 S. Ct. 465
    , 
    97 L. Ed. 617
     (1953).          In
    
    Howard, the City of Louisville, Kentucky, enacted an ordinance
    
    collecting a "license tax for the privilege of working in the city,
    
    measured by one percent of all salaries, wages and commissions
    
    earned in the city."          Id. at 625, 73 S.Ct. at 466.         Federal
    
    employees working within the jurisdiction of the Navy Department
    
    contended that the tax impermissibly functioned as a fee for doing
    
    business with the United States.      The Supreme Court, however, held
    
    that the tax established by the ordinance was an income tax.
    
    Quoting the Buck Act, 4 U.S.C. §§ 105-110, the Court stated that an
    
    " "income tax' means any tax levied on, with respect to, or
    
    measured by, net income, gross income, or gross receipts."          Id. at
    
    628, 73 S.Ct. at 467.    Although the state court had held that the
    
    tax was not an income tax, the Court declared:
    
          [T]he right to tax earnings within the area was not given
          Kentucky in accordance with the Kentucky law as to what is an
          income tax. The grant was given within the definition of the
          Buck Act, and this was for any tax measured by net income,
          gross income, or gross receipts....    We hold that the tax
          authorized by this ordinance was an income tax within the
          meaning of the federal law.
    Id. at 628-9, 73 S.Ct. at 468 (emphasis in original).      It seems to
    
    me that the Supreme Court's reasoning and disposition in Howard is
    
    very instructive, if not binding, with respect to this case.      The
    
    majority attempts to minimize the precedential force of Howard by
    
    distinguishing employees of a naval ordinance plant who "can be
    
    viewed as separate entities from the federal government when
    
    performing their duties" from federal judges because the latter are
    
    " "intimately connected with the exercise of a power or the
    
    performance of a duty by the Government.' "          Maj.Op. at ----
    
    (quoting United States v. New Mexico, 
    455 U.S. 720
    , 738, 
    102 S. Ct. 1373
    , 1383, 
    71 L. Ed. 2d 580
     (1982)).       In   Howard, however, the
    
    Supreme Court explicitly concluded that the tax in question—which
    
    was defined in terms identical to the tax at issue in this case—was
    
    an income tax within the meaning of the Buck Act.    344 U.S. at 468,
    
    73 S.Ct. at 468.   The Court's finding that the tax was an income
    
    tax under the Buck Act was inextricably linked to its conclusion
    
    that individuals working in a federal area within Louisville were
    
    subject to the tax.     I believe that the Buck Act and the Supreme
    
    Court's interpretation thereof compel the conclusion that the
    
    Jefferson County tax, which is by its terms indistinguishable from
    
    the tax described in Howard, is an income tax to which federal
    
    judges in Jefferson County are subject.
    
         The    majority,      relying   principally      on    Alabama's
    
    characterization of the tax and distinguishing Howard in a manner
    
    that fails to explain the Supreme Court's equation of a license
    
    occupation tax with an income tax, concludes "[i]n substance, the
    
    privilege tax does not tax the receipt of income."    Maj.Op. at ----
    .    Focusing on two provisions of the ordinance, the majority
    
    concludes that the "tax does not merely tax the receipt of income."
    
    Id. at ----.     First, the majority notes that the tax is levied not
    
    only on income received but also on income that one is entitled to
    
    receive.    This tax concept is certainly not novel in the realm of
    
    income taxation, either state or federal.                 See In re Kochell, 
    804 F.2d 84
    , 85 (7th Cir.1986) (stating that "in tax law a payment
    
    attributable to a person's earnings that bypasses him and goes to
    
    his designees is taxed as a payment to him");                   Bank of Coushatta v.
    
    United States, 
    650 F.2d 75
    , 77 (5th Cir. Unit A 1981) (noting that
    
    "[a] taxpayer is considered in constructive receipt of income if it
    
    is   available        to   him   without    any      substantial      limitation    or
    
    restriction as to the time or manner of payment or condition upon
    
    which payment is made, and the Commissioner will assess taxes on
    
    the basis of this income....").                The majority posits that this
    
    provision   demonstrates         that   "the    ordinance        is   concerned    with
    
    ensuring that work is taxed regardless of whether income from the
    
    work is actually received."                Maj.Op. at ----.           While such an
    
    explanation      is    not   incredible,       it    is   more    likely   that     the
    
    traditional and typical rationale for the taxation of entitlement
    
    to income noted above is more plausible.
    
         The majority concludes that because the ordinance exempts
    
    persons paying license fees to Jefferson County or to the State of
    
    Alabama, it "makes sense only if the ordinance aims to ensure that
    
    a license fee is paid to some unit of government for all work
    
    performed   in    Jefferson       County."          Id.    An    equally   plausible
    
    explanation is that the exemption exists to prevent double taxation
    of wage earners in that jurisdiction—particularly when the other
    
    qualifying fees may also be computed on the receipt or entitlement
    
    from wage or fee income.        The deduction or exemption of state and
    
    local taxes relative to each other or to federal taxable income is
    
    a familiar tax mechanism.        See 26 U.S.C. § 164(a)(1), (2) and (3)
    
    (1988) and Ala.Code § 40-18-15 (1993).
                                                                                 4
         If the burden or interference of the tax is not economic,
    
    what is it?    The majority informs us that the complaining judges
    
    refuse   to   pay   the   tax   "because   the   tax   purports   to    be   a
    
    precondition to the lawful performance of their federal judicial
    
    duties", Maj.Op. at ---- (emphasis added), and holds "that a
    
    federal judge is a federal instrumentality when the taxed activity
    
    is the judge's performance of judicial duties".         Id. at ---- - ----
    
    .   Nowhere in the opinion do we find an explanation of just how
    
    this declaration of lawful precondition "impedes" or "burdens" the
    
    performance of any judicial duties.              To paraphrase a popular
    
    question posed during the 1980's in fast food advertising:             "Where
    
    is the "burden' "? Aside from offending the sensibilities of these
    
    affected judges and arousing a sense of apprehension, the ordinance
    
    is a paper tiger.     As the majority concedes "Alabama law does not
    
         4
          See Computation of the tax set out in footnote 3 of this
    dissent. Recall that the district court found as a matter of
    fact that the privilege tax imposes no "monetary (economic)
    burden on the Federal Government itself." Acker, 850 F.Supp. at
    1544. Moreover, there has been no analysis of facts or finding
    by the district court relative to the judges' contention that
    "the ordinance's onerous time-keeping and return requirements
    burden the federal judicial function." Maj.Op. at ----. Stated
    differently, there is nothing in the record before us to
    establish or substantiate any such conclusion. Moreover, this
    ordinance's record keeping and return requirements appear to be
    no more onerous than those commonly associated with paying one's
    federal and state income taxes.
    appear    to   provide   criminal   sanctions      for     violating   county
    
    ordinances requiring the payment of privilege taxes."             Maj.Op. at
    
    ----.     While one can appreciate that these judges, honorable men
    
    and women sworn to uphold the law, may feel uncomfortable acting
    
    "unlawfully" as the ordinance "purports" to characterize their work
    
    in the absence of payment of the tax, is that the degree of
    
    impediment     or   burden   required   to    invoke   application     of   the
    
    intergovernmental tax immunity doctrine and the Supremacy Clause of
    
    the United States Constitution?              I doubt it.      The burden or
    
    impediment, to the extent that one exists in this case is, at best,
    
    de minimis and ephemeral.
    
                                     Appendix
    
         BY THE COURT:
    
                                    ON RECUSAL
    
         We accepted the Appellee's suggestion for rehearing en banc of
    
    this case to determine the validity, as applied to Article III
    
    judges, of a Jefferson County tax imposed on persons working in the
    
    County.    Given the nature of the controversy, we, at the outset,
    
    had to decide whether some or all judges of this Court are
    
    disqualified from the case, where nine of the en banc panel's
    
    twelve judges have sat in Jefferson County at least one day—and
    
    some a few days more.        We also faced the fact that, though this
    
    court has no immediate sittings planned for Jefferson County, all
    
    of its judges could be sent to do judicial work in Birmingham
    
    (which is in Jefferson) in the future.            Counsel for the County,
    
    however, represented at oral argument that the county has "never"
    
    attempted to collect the tax from a federal judge with no chambers
    in Jefferson County.      And, no judge of this Court now keeps
    
    chambers in Jefferson County.       Nor does this Court maintain a
    
    courtroom for its use in Jefferson County.
    
         Appellees included in their Certificate of Interested Persons
    
    this phrase:    "each Judge of the United States Circuit Court of
    
    Appeals for the Eleventh Circuit who has within the last five years
    
    performed or may perform any work or duties relating to the
    
    judicial function at any office or other location within Jefferson
    
    County, Alabama."1   No motions to recuse have been presented.   This
    
    listing might be construed as a suggestion of recusal;   but in any
    
    event, whether 28 U.S.C. § 455 requires recusal is an issue that
    
    judges are required to resolve on their own motion.    See Phillips
    
    v. Joint Legislative Committee on Performance and Expenditure
    
    Review of State of Mississippi, 
    637 F.2d 1014
    , 1020 n. 6 (5th Cir.
    
    Unit A 1981).   Because the integrity of the judiciary is in issue,
    
    moreover, the issue should be resolved "at the earliest possible
    
    opportunity."   Union Carbide Corp. v. U.S. Cutting Service, Inc.,
    
    
    782 F.2d 710
    , 712 (7th Cir.1986).
    
         Whether a judge is disqualified, that is, must not take part
    
    in deciding a case, is a question of law.      See McCuin v. Texas
    
    Power & Light Co., 
    714 F.2d 1255
    , 1260 (5th Cir.1983).     Title 28
    
    U.S.C. § 455 requires recusal whenever a judge's impartiality
    
    "might reasonably be questioned," id. § 455(a), or when he "has a
    
    financial interest in the subject matter in controversy ... or any
    
         1
          The significance of the five-year figure is unclear. We
    assume, for purposes of this opinion only, that no statute of
    limitations has run that would prevent the collection of taxes
    imposed based on the 9 October 1990 en banc sitting, in which
    most of the present Court heard argument in Jefferson County.
    other interest that could be substantially affected by the outcome
    
    of the proceeding."           Id.     § 455(b)(4).         The statute defines
    
    "financial interest" to mean "ownership of a legal or equitable
    
    interest, however small ... in the affairs of a party...."                    Id. §
    
    455(d)(4).
    
         The Ordinance may arguably authorize Jefferson County to
    
    compel the payment of half of one percent of the income received
    
    for those days worked in the County.             So, for example, for those
    
    judges who sat in Birmingham on 9 October 1990—the last day the
    
    Court of Appeals has sat in Birmingham and the only day most of our
    
    judges have sat in Jefferson County—the Ordinance might mean they
    
    could be assessed for half of one percent of 1/365 of their salary
    
    for 1990, which comes to roughly a dollar and a half.                We doubt the
    
    reasonable observer would think the integrity of federal judges
    
    could be bought so cheaply.
    
         We looked at the two potential "interests" of the court's
    
    judges,   in    accordance     with    28   U.S.C.     §    455(b)(4)—financial
    
    interests    and    "other"    interests.        Considering     the    statutory
    
    definition     of   "financial      interest,"   the   term    may     be   totally
    
    inapplicable here;      but we do not rely on a strict reading.               In In
    
    re New Mexico Natural Gas Antitrust Litigation, 
    620 F.2d 794
    , 796
    
    (10th Cir.1980), the court wrote these words:
    
         We agree with the Fourth Circuit's determination that a
         remote, contingent benefit, such as a possible beneficial
         effect on future utility bills, is not a "financial interest"
         within the meaning of the statute. It is an "other interest,"
         requiring disqualification under a "substantially affected"
         test.
    
    Id. (citing In re Virginia Elec. & Power Co., 
    539 F.2d 357
     (4th
    
    Cir.1976)).     That case involved an antitrust claim alleging that
    various oil companies were fixing the price of natural gas at the
    
    well head.   Relief was sought, among other things, on behalf of a
    
    class of residential customers in New Mexico where all the federal
    
    judges of the District of New Mexico resided.             The Tenth Circuit
    
    held that the possible beneficial effect on the future utility
    
    bills of those judges was a remote and contingent benefit and,
    
    thus, was no "financial interest."         Rather, the interest was an
    
    "other interest" which would require disqualification only if the
    
    interest "could be substantially affected by the outcome of the
    
    proceeding."     The possible beneficial effect on future rates was
    
    found to be remote and contingent, because, among other things, the
    
    rate   setting   agency   might   not   pass   on   the    cost   savings   to
    
    consumers.   Accord In re Virginia Elec. & Power Co., 
    539 F.2d 357
    ,
    
    366-67 (4th Cir.1976).
    
           We agree with the Tenth and Fourth Circuits that the term
    
    "financial interest" is limited to direct interests and does not
    
    include remote or contingent interests.             We believe that the
    
    judges' interest in this case is even more remote and contingent
    
    than in the Tenth and Fourth Circuit cases.          Jefferson County has
    
    represented that its tax has never been assessed against a federal
    
    judge without chambers in Jefferson County, and no judge of this
    
    Court maintains chambers in Jefferson County.             Some judge of this
    
    Court might occasionally sit in Jefferson County as a member of a
    
    three-judge district court;        but these duties are not common.
    
    Moreover, the possibility that a particular judge of this Court
    
    will be specially assigned in the future to hear a case in
    
    Jefferson County is wholly speculative.              Considering the low
    expectancy—regardless of how this case might be decided—that the
    
    tax will be assessed against judges who have no chambers or
    
    courtroom in Birmingham, we have concluded that the judges of this
    
    Court       have   no   "financial    interest"      in    the    subject   matter    in
    
    controversy in this case.
    
          Having determined that the judges' interest in this case is
    
    not     a    "financial         interest,"    but    is    an     "other    interest,"
    
    disqualification           is   required     only   if    the    interest   "could    be
    
    substantially affected by the outcome of the proceeding."                             We
    
    readily conclude that this provision does not require recusal.                        It
    
    is unlikely that the tax will ever be assessed against a judge of
    
    this Court because none have chambers in Jefferson County.                           And
    
    even if the tax were assessed against non-resident judges, we do
    
    not   believe        the    "substantially      affected"        standard   would     be
    
    satisfied.         Special assignments to sit in Birmingham are uncommon,
    
    and any such assignment would probably be of short duration and
    
    thus give rise to a de minimis tax.2
    
          Our conclusion and reasoning is supported by opinions of the
    
    Codes of Conduct Committee of the Judicial Conference of the United
    
    States.       The committee has interpreted language in the Code of
    
    
          2
          For the same reasons, we also conclude that no one could
    reasonably question the impartiality of the judges of this Court.
    We also have considered whether non-financial interests in the
    case's outcome might require recusal of judges. We concluded
    that the potential administrative burdens and intrusiveness of
    the Ordinance (again viewed against the likelihood of no tax ever
    being assessed against a judge now on this court) did not require
    recusal. For cases finding no need to recuse for non-financial
    interests tied to the Article III function, see In re Petition to
    Inspect & Copy Grand Jury Materials, 
    735 F.2d 1261
    , 1266 (11th
    Cir.1984); Duplantier v. United States, 
    606 F.2d 654
    , 662-63
    (5th Cir.1979).
    Conduct for United States Judges in a similar way (the Code's words
    
    track closely the financial interest language of section 455). See
    
    generally Union Carbide Corp. v. U.S. Cutting Service, Inc.,                          
    782 F.2d 710
    , 715 (7th Cir.1986) ("In matters of judicial ethics we are
    
    bound to give some weight to the view of the committee of judges
    
    that the Judicial Conference of the United States has established
    
    to advise federal judges on ethical questions.").                      In its Advisory
    
    Opinion No. 62, the committee advised that a judge should recuse
    
    from a case involving a utility to which he was a ratepayer only if
    
    he stood to receive savings that "might reasonably be considered
    
    substantial." The committee has also advised, in the same context,
    
    that a potential billing increase of "60 cents per month as of 1984
    
    plus normal increases is not considered substantial."                          Guide to
    
    Judiciary Policies and Procedures,                 Vol. II, Ch. V, Compendium §
    
    3.1-7[1](c) (1995).
    
           Our   decision       to   go     forward    with     deciding    the    case   was
    
    confirmed by the "rule of necessity," which rule "requires that
    
    "where all are disqualified, none are disqualified.' "                        In re City
    
    of Houston, 
    745 F.2d 925
    , 930 n. 9 (5th Cir.1984) (quoting Pilla v.
    
    American Bar Ass'n, 
    542 F.2d 56
    , 59 (8th Cir.1976)). See generally
    
    United States v. Will, 
    449 U.S. 200
    , 217-19, 
    101 S. Ct. 471
    , 482, 
    66 L. Ed. 2d 392
     (1980) (section 455 was not intended to abridge rule of
    
    necessity).        Applying the rule, this court has held that where a
    
    case   is    framed    as    one      that   "involves      important     Article     III
    
    concerns"     of    interest       to    "all     Article    III   judges,     wherever
    
    located," the rule of necessity instructs judges to refrain from
    
    recusal.     In re Petition to Inspect & Copy Grand Jury Materials,
    
    735 F.2d 1261
    , 1266 (11th Cir.1984).             Also, this court held in
    
    Duplantier v. United States, 
    606 F.2d 654
    , 662-63 (5th Cir.1979)
    
    (considering      constitutionality       of   Ethics     in   Government     Act
    
    provisions      requiring   filing   of   personal      financial   reports    by
    
    judges), that where all members of the judiciary have some interest
    
    in the outcome, none are disqualified, even if the levels of
    
    interest of individual judges vary somewhat.                   See id. at 662
    
    (noting specific characteristics of interest of judges who had
    
    already filed reports).       Every United States circuit judge in the
    
    country is eligible to be sent to Jefferson County to do judicial
    
    work.       See 28 U.S.C. § 291 (assignment of circuit judges);               see
    
    also id. § 292 (assignment of district judges).                So, this case is
    
    one that involves concerns of some importance to Article III judges
    
    everywhere.3     Thus, recusal by any one judge of this court would be
    
    contrary to the rule of necessity.
    
            Also relevant to the recusal decision and to the application
    
    of the rule of necessity was the hardship to the participants and
    
    hindrance to judicial economy that would have resulted from a
    
    recusal en masse.      In City of Houston, 745 F.2d at 931 n. 9, the
    
    court noted that recusal was inappropriate when viewed in the light
    
    of the "impracticality and unnecessary hardship that would result
    
    from recusal where the grounds are tenuous at best...."                       Id.
    
    (citations omitted);        see also id. (noting relevance of "great
    
    
            3
          The principles involved in this case also might affect the
    application of other taxes to which other federal judges in other
    places are subject. See In re Pet. To Inspect & Copy Grand Jury
    Materials, 
    735 F.2d 1261
    , 1266-67 (11th Cir.1984) (applying rule
    of necessity where principles of law involved in case are of
    substantial interest to all Article III judges).
    inconvenience         to    the       counsel,        parties,       or    judge")      (internal
    
    quotation marks and citations omitted).                         Here, recusal would have
    
    been       especially      impractical,              because    it       would   have   entailed
    
    empaneling       an     entire        en       banc     court    of       judges   sitting    by
    
    designation, an event for which we can find no clear precedent and
    
    which raises some jurisprudential questions.4
           Because we have no interest, financial or other, that requires
    
    disqualification            under              the      circumstances            and     because
    
    disqualification under the circumstances would also be contrary to
    
    the rule of necessity, we concluded that no member of this court
    
    was required to recuse.
    
           ALL THE JUDGES CONCUR IN THE OPINION ON RECUSAL.
    
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           4
          For background, see United States v. Nixon, 
    827 F.2d 1019
    ,
    1021 (5th Cir.1987); see also Matter of Skupniewitz, 
    73 F.3d 702
    , 705 (7th Cir.1996); Martinez v. Winner, 
    778 F.2d 553
    , 555
    n. 1 (10th Cir.1985), vacated on other grounds, Tyus v. Martinez,
    
    475 U.S. 1138
    , 
    106 S. Ct. 1787
    , 
    90 L. Ed. 2d 333
     (1986).
    
                Our conclusion for this case would be the same even if
           it were plainly lawful to empanel an en banc court for this
           Circuit composed of non-disqualified judges drawn
           exclusively from other circuits; the rule of necessity has
           been applied, by one court at least, even where fewer than
           all judges of a single district court would be disqualified.
           See City of Houston, 745 F.2d at 931 n. 9 (applying the rule
           of necessity where "no resident Houston district judge would
           be qualified if [the pertinent district judge] were held to
           be disqualified;" district included cities in which
           district judges were resident other than Houston).
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