22 Nov Does the Dormant Commerce Clause Prohibit a State from Taxing All of Its Residents’ Income?
A recent cert petition raises an important question about how the federal Constitution limits State and local taxing authority.
In Maryland State Comptroller of the Treasury v. Wynne, the Maryland Court of Appeals held that the dormant Commerce Clause requires every state and subdivision to give its residents a full tax credit for all income taxes that they pay in another state or subdivision. The U.S. Supreme Court has never applied the dormant Commerce Clause to reach that result, and it appears to conflict with cases in other states. Not surprisngly then, the Maryland State Comptroller of the Treasury has asked the Supreme Court to take the case.
This week, IMLA joined the United States Conference of Mayors, the National Association of Counties, the International City/County Management Association, and the Maryland Association of Counties in filing an amicus brief supporting the petition. The brief argues that the decision violates basic principles of federalism, and is inconsistent with the State’s sovereign powers to tax its residents.
We’ll continue to monitor the case and will bring you any updates.