On May 23, 2018, the Maryland Tax Court held that Maryland’s limitation of interest on refunds resulting from the US Supreme Court’s decision in Comptroller of the Treasury of Maryland v. Wynne, 135 S. Ct. 1787 (2015) violates the US Constitution. Wynne v. Comptroller of Maryland, No. 16-IN-OO-0216 (Md. Tax Ct.).


Section 16 of the Budget Reconciliation and Financing Act of 2014 (Act)1 provided for a lower interest rate on refunds owed to Maryland taxpayers resulting from the US Supreme Court’s Wynne decision. Before the Act, Maryland taxpayers were generally entitled to an interest rate of the greater of 13% or three percentage points above the Federal Reserve Bank’s average prime interest rate, subject to certain exceptions.2 The Act retroactively lowered the statutory interest rate—solely for refunds related to Wynne—to the average prime rate of interest quoted by commercial banks to large businesses during the fiscal year 2015, which was only 3.25%.

Maryland Tax Court Decision

The Tax Court held that the same rationale used by the Supreme Court in Wynne is applicable to the lowered interest rate on Wynne refunds. Thus, Maryland’s lower interest rate on Wynne refunds violates the dormant Commerce Clause. For more information on the 2015 Supreme Court decision in Wynne, see our original legal alert on that decision.

The lowered Wynne interest rate is also the subject of a separate class action lawsuit filed against the Comptroller of Maryland in the Circuit Court of Baltimore City.3 However, the Circuit Court dismissed the class action suit, holding that the Plaintiffs were required to exhaust their administrative remedies and should have first filed their claims in the Maryland Tax Court instead of the Circuit Court for Baltimore City.