In McCulloch v. Maryland, what action did Maryland take that led to the dispute?

• A. Imposed a tax on the Second Bank of the United States.
• B. Granted the bank a special charter.
• C. Passed a law to prohibit the bank's operations.
• D. Issued a resolution to create a state bank in competition.

Answer: (A)

This question focuses on the tension between state power and federal authority and the idea that federal law has supremacy over state law when it comes to federal functions. Maryland enacted a law that taxed the Second Bank of the United States, a federal institution operating within the state. This tax was aimed at hindering or shutting down the bank’s operations in Maryland, which raised the central issue: can a state tax a federal instrument or agency? The Supreme Court answered that no. The ruling rested on the Supremacy Clause, which makes federal law supreme for conflicts with state law, and on the idea that Congress has implied powers under the Necessary and Proper Clause to create a national bank. Allowing Maryland to tax the bank would effectively allow a state to impede a federal function, undermining federal authority. So the action that led to the dispute was Maryland’s imposition of a tax on the Bank of the United States. The other options don’t fit because they describe actions that the case did not involve—Maryland did not grant a charter to the bank, prohibit its operations, or seek to create a competing state bank.