Comptroller of the Treasury of Maryland v. Wynne

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Tax Law
  • Date Filed: May 18, 2015
  • Case #: 13–485
  • Judge(s)/Court Below: ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, BREYER, and SOTOMAYOR, JJ., joined. SCALIA, J., filed a dissenting opinion, in which THOMAS, J., joined as to Parts I and II. THOMAS, J., filed a dissenting opinion, in which SCALIA, J., joined except as to the first paragraph. GINSBURG, J., filed a dissenting opinion, in which SCALIA and KAGAN, JJ., joined.
  • Full Text Opinion

A state law that does not credit taxpayers for income tax paid in other states for income earned out of state is unconstitutional.

Petitioner, the State Comptroller for the Treasury of Maryland, appeals a decision by the Maryland Court of Appeals, which found the state’s income tax scheme unconstitutional. Respondents were Maryland residents who earned income on stocks from an S corporation that filed taxes in multiple states. Respondents were not fully credited for income tax paid in other states on their income. In Maryland, residents are taxed on income earned out of state under a “state” tax and a “county” tax. Residents are then credited for taxes paid to another state for the “state” tax, but not for the “county” tax. The Court held that this scheme is unconstitutional under the dormant Commerce Clause. The Court applied the internal consistency test, which asks what the effect on interstate commerce would be if the same statutory scheme was passed in every state. The Court determined that a statutory scheme like Maryland “creates a disparate incentive to engage in intrastate commerce” and operates like a tariff.

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