As we previously reported, on January 28, 2013, in Maryland State Comptroller of the Treasury v. Wynne, the Maryland Court of Appeals held that Maryland must permit Maryland resident taxpayers with pass-through income from other states to claim a credit for out-of-state income taxes paid against not only their Maryland state income taxes but also their Maryland county income taxes. The court determined that the failure to allow the credit against the county income tax is unconstitutional under the dormant Commerce Clause of the United States Constitution.
Subsequently, the State of Maryland filed a petition for review with the U.S. Supreme Court. The Court requested the U.S. Solicitor General to file a brief addressing whether the Court should review the decision. On April 4, the Solicitor General filed the requested brief and presented his view that the Court should review the decision.
The Solicitor General’s brief states that this is an important matter for the Court’s determination because Maryland counties could be faced with refunding more than $190 million in income taxes, plus interest, for prior years and providing approximately $50 million a year in credits prospectively.
Action on Maryland’s petition for review is likely before the end of the current term of the Court in June. If the Court determines to review the decision (as we expect), oral argument will proceed in the next term of the Court beginning in October. The Court could issue its decision anytime thereafter.