Cite as: 513 U. S. 123 (1994)
Opinion of the Court
States . . . but exempt from state income taxes under the laws of the United States." Neb. Rev. Stat. § 77-2716(1)(a) (Supp. 1994). For purposes of Nebraska's income tax law, if interest would be exempt from tax in the hands of the Trusts, then respondent's proportionate share of such interest will be exempt. § 77-2716(1)(b).
A decade ago petitioner considered whether the interest income derived from repurchase agreements involving federal securities and then distributed to respondent and similarly situated individuals was subject to Nebraska's income tax. Petitioner concluded that it was. Neb. Rev. Rul. 22- 85-1, Brief for Petitioner 4-5, n. 1. In 1988, respondent brought a declaratory judgment action in the District Court of Lancaster County, Nebraska, asking that Revenue Ruling 22-85-1 be declared invalid as contrary to 31 U. S. C. § 3124(a) and the Supremacy Clause of the United States Constitution. The District Court granted the requested relief. On appeal, the Supreme Court of Nebraska affirmed, concluding that "the income received by [respondent] from repo transactions executed by the [T]rusts involving federal securities is exempt from state taxation under § 3124." Loewenstein v. State, 244 Neb. 82, 90, 504 N. W. 2d 800, 805 (1993).
As the Nebraska Supreme Court itself acknowledged, see id., at 88-90, 504 N. W. 2d, at 804-805, several state courts have reached directly contrary conclusions,2 and two Federal
2 See Hammond Lead Products, Inc. v. State Tax Commissioners, 575 N. E. 2d 998 (Ind. 1991); Department of Revenue v. Page, 541 So. 2d 1270 (Fla. App. 1989); Capital Preservation Fund, Inc. v. Wisconsin Dept. of Revenue, 145 Wis. 2d 841, 429 N. W. 2d 551 (App. 1988); Andras v. Illinois Dept. of Revenue, 154 Ill. App. 3d 37, 506 N. E. 2d 439 (1987), cert. denied, 485 U. S. 960 (1988).
As Justice Caporale pointed out in dissent below, see 244 Neb., at 91-92, 504 N. W. 2d, at 806, at least five other state courts also have reached a result contrary to that of the majority. See Everett v. State Dept. of Revenue and Finance, 470 N. W. 2d 13 (Iowa 1991); Comptroller of the Treasury, Income Tax Div. v. First United Bank & Trust, 320 Md. 352, 578
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