The US Supreme Court ruled today that Maryland’s income tax system, specifically the application of the local income tax, is unconstitutional and must be altered to grant more credits for Maryland residents’ out-of-state income. This 5 – 4 decision in the Maryland State Comptroller of the Treasury v. Brian Wynne has put the author of the majority opinion, Justice Samuel Alito, at odds with his conservative colleagues.
A post in the “Hit & Run” blog describes the findings of the majority and dissenting opinions.
Because Maryland “creates an incentive for taxpayers to opt for intrastate rather than interstate economic activity,” declared the majority opinion of Justice Samuel Alito, “its law has the same economic effect as a state tariff, the quintessential evil targeted by the dormant Commerce Clause.”
The dormant Commerce Clause refers to the idea that the Commerce Clause, in addition to granting Congress a limited power to regulate interstate commerce, also provides a check on the regulatory and taxing authority of the states. That check, Alito explained, forbids the states “from discriminating against or imposing excessive burdens on interstate commerce.”
Alito’s sharpest critics proved to be two of his most conservative colleagues, Justices Antonin Scalia and Clarence Thomas. Scalia and Thomas each filed separate dissenting opinions, as did Justice Ruth Bader Ginsburg, whose dissent was joined by Justice Elena Kagan. According to Scalia, the dormant Commerce Clause is a “judicial fraud” that allows federal judges to rewrite state laws according to their own preferences. Thomas, meanwhile, argued that Alito’s take was totally at odds with constitutional history. “It seems highly implausible that those who ratified the Commerce Clause understood it to conflict with the income tax laws of their States and nonetheless adopted it without a word of concern,” Thomas wrote.
Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer, and Sonia Sotomayor all supported Alito’s opinion.
For more details on the case, see previous Conduit Street coverage:
Maryland Loses Wynne Income Tax Case – Counties Brace for Impact
With Income Tax Case Looming, State Adopts Follow-Through Plan
Wynne Income Tax Case Provokes Conversation and Questions at Supreme Court
U.S. Solicitor General Backs Maryland In Local Income Tax Case
Supreme Court Demonstrates Interest in County Income Tax
Full coverage of the case, including all legal documents and filings, is available at the SCOTUSblog website.