Governor Hogan and Comptroller Franchot launched a new website yesterday designed to assist taxpayers who may be eligible for a tax refund as a result of a recent U.S. Supreme Court decision concerning the local income tax. The case, Comptroller v. Wynne, was decided this past May.
As reported by the Washington Post,
The taxpayer windfall is the result of a 5-to-4 decision in which the high court ruled that Maryland’s practice of withholding a credit on the county segment of the state income tax wrongly exposed residents with out-of-state income to illegal double taxation. The case was brought in 2006 by a Howard County couple, Brian and Karen Wynne, who owned a stake in a medical staffing company that did business in more than three dozen states.
At a midafternoon news conference Monday, Hogan and Franchot announced a new Web page (governor.maryland.gov/you-may-be-owed-a-tax-refund) that answers questions about eligibility for Wynne refunds and instructs residents how to apply for them. Residents who filed “protective claims” — claims entitling them to potential refunds — as early as 2007 could be eligible if they did so within the three-year legal window, officials said. Residents who filed and paid income tax to another state in 2011 and subsequent years should fill out the form available on the page, they said.
While the State will initially pay the refunds, local governments will be required to offset the payments through a reduction in local income tax distributions over the next two fiscal years. It is estimated that 55,000 taxpayers could be eligible for refunds totaling $200 million.
…But, as the Web page notes, much of the $200 million will go to residents who own businesses that are “pass through” entities, or companies that pay no corporate income tax, only individual income tax.
The history of Comptroller v. Wynne can be found in a series of posts on Conduit Street. Blog posts also include information on key decisions and local fiscal consequences.
Governor’s Press Release Launching Website