opinion: Mr. Chief Justice Warren
  delivered the opinion of the Court.
  In this case we are asked to determine which of two competing claimants — the Federal Government by virtue of its tax lien, or certain petitioning subcontractors by virtue of their rights under Section 36-a of the New York Lien Law — is entitled to a sum of money owed under a general construction contract which was performed by the taxpayer.
  The taxpayer, Fleetwood Paving Corporation, is a general contractor, which in July or August 1952, agreed to remodel a restaurant belonging to one Ada Bottone, herein referred to as the owner. The petitioners in August and September of that year entered into a subcontract with the taxpayer to supply labor and materials for the remodeling job. Shortly thereafter, the petitioners performed their obligations under the subcontract, but were not fully compensated by the contractor-taxpayer. Therefore, on November 3, 1952, and on November 10, 1952, they filed notices of their mechanic’s liens on the owner’s realty in the office of the Clerk of West-chester County. In June 1953, they instituted actions in the New York Supreme Court to foreclose those liens.
  By order of court, the owner was permitted to deposit with the Clerk of the court the $2,200 which she still owed under the original construction contract, and she was thereafter dismissed as a defendant in the action. The Government, having previously levied upon the owner’s alleged indebtedness to the taxpayer, was permitted by the court to enter the case as a party defendant.
  The Government asserted precedence over the claims of petitioners because of the following facts: The Director of Internal Revenue in December 1951 and March 1952 received assessment lists containing assessments against the taxpayer for unpaid federal withholding and social security taxes. On October 31, 1952, the Director filed a notice of federal tax liens m the office of the Clerk of the City of Mount Vernon, New York, which is the city wherein the taxpayer maintained its principal place of business. The Government claimed priority for its tax lien under Sections 3670 and 3671 of the Internal Revenue Code of 1939. The petitioners contended that since the contractor-taxpayer owed them more than $2,200 for labor and materials supplied to the job, under the New York Lien Law, Section 36-a, he had no property interest in the $2,200 which the owner still owed under the original remodeling contract.
  The New York Supreme Court, Special Term, 140 N. Y. S. 2d 355, granted petitioners’ motion for summary judgment. The ground for the decision was that the Government’s tax lien was ineffective since it had not been filed in the office designated by New York law for the filing of liens against realty. On appeal, the Appellate Division affirmed, but on the ground that there was no debt due from the owner to the taxpayer to which the Government’s lien could attach, 2 App. Div. 2d 747, 153 N. Y. S. 2d 268. The court reasoned that the fund deposited by the owner was a substitute for her realty to which the mechanic’s liens had attached; and that since the Government had no lien on the owner’s property, it could have no lien on the fund substituted for that property. On appeal, the New York Court of Appeals held that the tax lien had taken effect prior to the petitioners’ claims. It therefore reversed the lower New York courts, and ruled that the motion of the United States for summary judgment, rather than that of petitioners, should have been granted by the Supreme Court, Special Term. 3 N. Y. 2d 511, 146 N. E. 2d 774. We granted certiorari, 359 U. S. 904.
  The threshold question in this case, as in all cases where the Federal Government asserts its tax lien, is whether and to what extent the taxpayer had “property” or “rights to property” to which the tax lien could attach. In answering that question, both federal and state courts must look to state law, for it has long been the rule that “in the application of a federal revenue act, state law controls in determining the nature of the legal interest which the taxpayer had in the property . . . sought to be reached by the statute.” Morgan v. Commissioner, 309 U. S. 78, 82. Thus, as we held only two Terms ago, Section 3670 “creates no property rights but merely attaches consequences, federally defined, to rights created under state law . . . .” United States v. Bess, 357 U. S. 51, 55. However, once the tax lien has attached to the taxpayer’s state-created interests, we enter the province of federal law, which we have consistently held determines the priority of competing liens asserted against the taxpayer’s “property” or “rights to property.” United States v. Vorreiter, 355 U. S. 15, reversing 134 Colo. 543, 307 P. 2d 475; United States v. White Bear Brewing Co., 350 U. S. 1010, reversing 227 F. 2d 359; United States v. Colotta, 350 U. S. 808, reversing 224 Miss. 33, 79 So. 2d 474; United States v. Scovil, 348 U. S. 218; United States v. Liverpool & London & Globe Ins. Co., 348 U. S. 215; United States v. Acri, 348 U. S. 211; United States v. City of New Britain, 347 U. S. 81; United States v. Gilbert Associates, 345 U. S. 361; United States v. Security Trust & Sav. Bank, 340 U. S. 47; Illinois v. Campbell, 329 U. S. 362; United States v. Waddill, Holland & Flinn, Inc., 323 U. S. 353. The application of state law in ascertaining the taxpayer’s property rights and of federal law in reconciling the claims of competing lienors is based both upon logic and sound legal principles. This approach strikes a proper balance between the legitimate and traditional interest which the State has in creating and defining the property interest of its citizens, and the necessity for a uniform administration of the federal revenue statutes.
  Petitioners contend that the New York Court of Appeals did not make its determination in the light of these settled principles. Relying upon the express language of Section 36-a of the Lien Law and upon a number of lower New York court decisions interpreting that statute, petitioners conclude that the money actually received by the contractor-taxpayer and his right to collect amounts still due under the construction contract constitute a direct trust for the benefit of subcontractors, and that the only property rights which the contractor-taxpayer has in the trust are bare legal title to any money actually received and a beneficial interest in so much of the trust proceeds as remain after the claims of subcontractors have been settled. The Government, on the other hand, claims that Section 36-a merely gives the subcontractors an ordinary lien, and that the contractor-taxpayer’s property rights encompass the entire indebtedness of the owner under the construction contract.
  This conflict should not be resolved by this Court, but by the highest court of the State of New York. We cannot say from the opinion of the Court of Appeals that it has been satisfactorily resolved. We find no discussion in the court’s opinion to indicate the nature of the property rights possessed by the taxpayer under state law. Nor is the application to be made of federal law clearly defined. We believe that it is in the interests of all concerned to have these questions decided by the state courts of New York. We therefore vacate the judgment of the Court of Appeals, and remand the case to that court so that it may ascertain the property interests of the taxpayer under state law and then dispose of the case according to established principles of law.
  Vacated and remanded.
  Section 3670:
  “If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.”
  Section 3671:
  “Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of lapse of time.”
  These provisions also appear in the 1954 Code. Int. Rev. Code of 1954, §§ 6321, 6322.
  McKinney’s N. Y. Laws, Lien Law (1958 Supp.), § 36-a, provides as follows:
  “The funds received by a contractor from an owner for the improvement of real property are hereby declared to constitute trust funds in the hands of such contractor to be applied first to the payment of claims of subcontractors, architects, engineers, surveyors, laborers and materialmen arising out of the improvement, and to the payment of premiums on surety bond or bonds filed and premiums on insurance accruing during the making of the improvement and any contractor and any officer, director or agent of any contractor who applies or consents to the application of such funds for any other purpose and fails to pay the claims hereinbefore mentioned is guilty of larceny and punishable as provided in section thirteen hundred and two of the penal law. Such trust may be enforced by civil action maintained as provided in article three-a of this chapter by any person entitled to share in the fund, whether or not he shall have filed, or had the right to file, a notice of lien or shall have recovered a judgment for a claim arising out of the improvement. For the purpose of a civil action only, the trust funds shall include the right of action upon an obligation for moneys due or to become due to a contractor, as well as moneys actually received by him.”
  Section 36-a was repealed on September 1, 1959. N. Y. Laws 1959, c. 696, § 14. The subject matter covered by § 36-a is now included in McKinney’s N. Y. Laws, Lien Law (1959 Supp.), §§70, 71.
  It is suggested that the definition of the taxpayer’s property interests should be governed by federal law, although supplying the content of this nebulous body of federal law would apparently be left for future decisions. We think that this approach is unsound because it ignores the long-established role that the States have played in creating property interests and places upon the courts the task of attempting to ascertain a taxpayer’s property rights under an undefined rule of federal law. It would indeed be anomalous to say that the taxpayer’s “property and rights to property” included property in which, under the relevant state law, he had no property interest at all.
  It is said that because of the unique circumstances which existed in Bess, that case does not control here. However, aside from the fact that Bess involved proceeds payable under an insurance policy, whereas this case involves proceeds payable under a construction contract, it is apparent that the relevant circumstances of the two cases are essentially identical. In both cases the Government was attempting to assert its tax lien against what it thought to be the “property and rights to property” of the taxpayer. In both cases an adverse party claimed the right to the property in question on the theory that the taxpayer had never acquired a state-created property interest to which the Government’s tax lien could attach. Finally, in both cases, the Government attempted to characterize the problem as one involving a conflict between competing claimants to be settled solely by the application of federal law.
  Bess held that state law determines the property interests of a taxpayer in the cash surrender value of an insurance policy, as well as in the proceeds payable upon death. The same considerations which led to our conclusion in Bess require that we look to state law in determining the general contractor’s property interests in this case.
  It is suggested that the rule announced by Bess and applied in this case is inconsistent with the mandate that federal law governs the relative priority of federal tax liens and state-created liens. However, we fail to perceive wherein lies the inconsistency. It is one thing to say that a taxpayer’s property rights have been and should be created by state law. It is quite another thing to declare that in the interest of efficient tax administration one must look to federal law to resolve the conflict between competing claimants of the taxpayer’s state-created property interests.
  Subsequent to the Court of Appeals’ decision in the instant case, and after this Court’s decision in United States v. Bess, 357 U. S. 51, the New York Court of Appeals decided the case of In re City of New York, 5 N. Y. 2d 300, 157 N. E. 2d 587, pending on petition for a writ of certiorari sub nom. United States v. Coblentz, No. 259, this Term [post, p. 841]. The Coblentz case is not authority for the disposition of the instant case. The latter involves a determination of property rights under § 36-a of the New York Lien Law, whereas the Coblentz case was concerned with the taxpayer’s property interests under an assignment contract, § 475 of the New York Judiciary Law, and § B15-37.0 of the New York City Administrative Code.
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