The Supreme Court ruled Tuesday that states may not treat retired federal employees differently from retired state and local workers for purposes of taxing retirement benefits.

In an 8-1 decision written by Justice Anthony Kennedy, the court said the state of Michigan may not exempt its own retired employees from taxes on their benefits while taxing the benefits of federal retirees.The court ordered a refund for Paul S. Davis, the man who brought the suit, and sent the case back to state courts for a determination of whether the law should be changed to exempt federal retirement benefits from the tax or to extend the tax to state and local retirees.

Justice John Paul Stevens dissented.

In other action Tuesday, the court:

-Ruled unanimously that the Texas State Teachers Association was entitled to an award of attorney fees in its long dispute with the Garland Independent School District.

-Ruled unanimously that a company under federal indictment could not appeal a court ruling that refused to dismiss the case until the case was completed.