In a 5-4 decision today, the United States Supreme Court struck down the scheme by which Maryland taxes income earned across state lines. Like many other states, Maryland taxes out-of-state income earned by its resident. Unlike other states, however, Maryland only provides its residents with a partial credit for taxes paid on such income to other jurisdictions. The Supreme Court held that this partial credit scheme discriminates against interstate commerce in violation of the Commerce Clause of the U.S. Constitution.
RK&O’s David Daniels and Margaret Meyers represented a bi-partisan group of tax scholars on this appeal. The group filed an amicus brief that the majority justices relied upon in reaching its opinion.
“Today’s decision is a huge win for Maryland taxpayers,” said David Daniels, lead partner from Richards Kibbe & Orbe LLP. “It’s also a win for our clients. They gave the Court a new way to think about the Commerce Clause. The Court not only wholeheartedly adopted their analysis in this case but endorsed it as a framework that can be used to guide state tax policy going forward.”