As previously reported by Conduit Street, the Maryland Attorney General’s Office recently filed a petition with the United States Supreme Court requesting that it review a decision by the Maryland Court of Appeals in the case of Maryland State Comptroller of the Treasury v. Brian Wynne.
MACo has joined an amicus curiae brief prepared by the International Municipal Lawyers Association (IMLA) in support of the Attorney General’s petition. Beside IMLA and MACo, other parties of interest who joined the brief include the National Association of Counties, United States Conference of Mayors, and the International City/County Management Association.
The Court of Appeals holding found the Maryland’s practice of crediting taxes paid to other states but not to the local government portion of the Maryland’s taxes is a violation of the United States Constitution’s commerce clause. The decision could cost local governments approximately $50 million a year.
From the brief’s Summary of Argument section:
The Court should grant certiorari in this case because the Maryland Court of Appeals’ decision conflicts with other state court decisions and because this is an important issue of federalism that has not been authoritatively decided by this Court. This case places before the Court the important question of whether a state may tax all the income of its residents, wherever earned, or whether it is constitutionally mandated to provide a dollar-for-dollar credit for all income taxes paid by those residents in other states.
At issue is the degree to which individual states may exercise their sovereign prerogative to raise revenues. If the Court of Appeals is correct, the dormant Commerce Clause requires that states and their subdivisions re-write their tax codes and continue to provide essential services to residents who may pay little or nothing for them.