The Supreme Court on Monday unanimously dismissed a lower federal court ruling exempting production credit associations from state taxes.

Overturning a 1996 ruling by the Court of Appeals for the Eighth Circuit, the high court ruled that the matter must be decided in state, not federal, court.

Production credit associations, created by Congress in 1933 to provide short-term farm loans, retained their state tax exemption after being privatized in 1968. Arkansas sought to eliminate the tax break, and the American Bankers Association filed an amicus brief supporting the state.

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