NATION : States Told Not to Tax U.S. Pensions

<i> From Times wire services </i>

States may not tax federal pensions while exempting the pensions of retired state and local government workers, the Supreme Court ruled today.

By an 8-1 vote, the justices struck down Michigan’s differing tax treatment of the pensions received by retired government employees.

The challenged Michigan law “violates principles of intergovernmental tax immunity by favoring retired state and local government employees over retired federal employees,” Justice Anthony M. Kennedy wrote for the court.