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Friday, May 29, 2015

Maryland income tax refund granted by the Supremes

The Supreme Court (Comptroller of the Treasury of Maryland v. Wynne) has found that Maryland acted unconstitutionally by not giving its residents a full credit for taxes paid to other states. While Maryland was giving a credit for the Maryland state income portion of the tax paid, it was not giving a credit for the local jurisdiction portion of the tax.

A 5-4 majority of the Court found that Maryland's failure to give the full credit for taxes paid to other states violated the “dormant commerce clause”.  For those that do not follow constitutional law, the dormant commerce clause concept is that, since the Commerce Clause affirmatively permits Congress to “regulate commerce with foreign nations, and among the several states, and with the Indian tribes”, then the states must be restrained from interfering with the commerce of other states – as in collecting taxes on income earned in another state.

It appears that refunds will be available for the tax years of 2006 to 2014.  If you or your clients earned multi-jurisdictional income during those years, or were the personal representative or trustee where multi-jurisdictional income tax returns were filed, an amended return should be filed.  Be warned, though, there is some on-going discussion as to whether an amended return beyond the normal 3 year limitations period will be honored.

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Attorney Lindsey Warren Duvall assists clients throughout Anne Arundel County and Prince Georges County, including but not limited to Annapolis, Davidsonville, Gambrills, Crofton, Severna Park, Crownsville, South River, Millersville, Waugh Chapel, Odenton, Piney Orchard, Severn, Upper Marlboro, Bowie, Glenndale, Galesville, Gibson Island, Arundel Mills, Columbia, Edgewater, Deale, Harwood, Lothian, Churchton, Shady Side, Cape St. Claire, Broadneck, Arnold, Jessup, Laurel, Linthicum, Mitchellville, Pasadena, and Lake Shore, MD.

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