2018 End of Session Wrap-up: Wynne Tax Bills

The segments below provide a brief overview of MACo’s work to protect and grow county revenues in the 2018 General Assembly. 

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

Wynne Case

In 2015, the US Supreme Court ruled in a 5-4 decision 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. The decision has had severe fiscal consequences for local governments. As reported by the Washington Post,

The ruling affects about 55,000 Maryland taxpayers, according to the state comptroller’s office. Those who tried to claim the credit on their county income tax returns between 2006 and 2014 are likely to be eligible for refunds, which officials estimate could total $200 million with interest. 

Going forward, certain small-business owners who pay income taxes to another state on income earned in that state will be able to claim a credit for both the state and county portions of the Maryland tax, costing Maryland an estimated $42 million a year in revenue.

In the 2018 General Assembly Session, MACo has continued to advocate on behalf of counties affected by the Wynne ruling.

Wynne Repayment

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MACo successfully supported a bill which delays, for two years, the requirement for local governments to repay the Local Income Tax Reserve Account for refunds paid pursuant to the Maryland State Comptroller of the Treasury v. Brian Wynne court decision. Senate Bill 742/House Bill 686 merely addresses the remaining matter of bookkeeping for the state-managed reserve account. The legislation has passed the General Assembly and is awaiting the Governor’s signature. Bill Information | MACo Coverage

Wynne Interest Rate

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MACo successfully opposed a bill which would establish a punitive interest rate paid to income tax payers receiving refunds under the Maryland State Comptroller of the Treasury v. Brian Wynne court decision. Senate Bill 193 would have overridden prior General Assembly action to set the rate for this class of refunds at a more reasonable market-based rate. The legislation did not move out of its Senate Committee. Bill Information

For more information on tax and revenues legislation tracked by MACo during the 2018 legislative session, click here.

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