TAX ALERT!!!- Wynne vs Maryland State Case
The Wynne vs Maryland State Case. After six months of hearing arguments from the Comptroller of Maryland’s legal council, the justices of the U.S. Supreme Court upheld the U.S. Tax Court’s decision today to rule (5-4) in favor of taxpayer, Brian Wynne, which disallows the Comptroller of Maryland to double tax income earned by Maryland resident business owners in states outside of Maryland. According to the Comptroller of Maryland, this ruling will likely cost the state hundreds of millions of dollars.
At issue in this case was whether the Comptroller of Maryland should provide a credit against local taxes to Maryland resident business owners for taxes paid to other states. The Comptroller of Maryland has historically allowed such a credit against its state income tax, but not against its local county and city income taxes often referred to the “piggyback tax.”
The U.S. Supreme Court agreed with Wynne’s legal council that disallowing such a credit violated the Interstate Commerce Clause of the Federal Constitution. The ruling could affect similar laws in New York, Indiana, Pennsylvania, and Ohio.
What does this mean to you? If you filed a Maryland Form 502CR with your Maryland Individual Income Tax Return in the past 3 years, you may be entitled to refunds of Maryland piggyback taxes paid.
For additional information, please feel free to call Steve Purdy, CPA/ABV at (301) 258-8900 with any questions and/or concerns.
Steve Purdy, CPA/ABV