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Governmental immunity, in the context of taxation, is the legal doctrine that implies a limitation of the federal government to tax a state government of one of its bodies and vice versa. The doctrine of governmental immunity applies only to the taxing power of state and federal governments to tax eachother and is based on the dual nature of our governmental system. The term is also referred to as sovereign immunity.
Governmental immunity traces its orgins from early English law. Generally, it is the doctrine that the sovereign or government cannot commit a legal wrong and is immune from civil suit or criminal prosecution. In many cases, the government has waived this immunity to allow for suits. Federal sovereign immunity is a defense to liability rather than a right to be free from trial. The Supreme Court has ruled that in a case involving the government's sovereign immunity the statute in question must be strictly construed in favor of the sovereign and may not be enlarged beyond the waiver its language expressly requires.
Absent "consent," the federal government, its departments and agencies are immune from suit. Governmental immunity extends to Indian nations, government officials acting in their official capacity. and, to the extent that Congress has cloaked them with immunity, federal corporations. The 11th Amendment to the U.S. Constitution provides that, "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
Governmental immunity does not prevent an injured private party from suing a state officer and obtaining an order that the officer cease conduct that violates federal law. Another important exception is that states have no immunity from suits brought by other states or by the United States. There is an exception for cases in which a state consents to suit or in some other way waives its governmental immunity. Also, Congress can abrogate state governmental immunity by passing a statute that expressly provides for private damage suits against states.