Salt Report 3637 – In split decision the US Supreme Court rules 5 to 4 in favor of the taxpayer. Maryland imposes two income taxes, one at the state level and one at the county level. The issue revolved around the credits allowed for the state level tax but not for the county level tax for multistate income earners. Taxpayers Brian and Kern Wynne won their case asserting that the lack of credit for the county level tax violated the Commerce Clause of the US Constitution.
The tax scheme failed the “internal consistency” test. The court found that if every state adopted the same tax structure, interstate commerce would be taxed at a higher rate than intrastate commerce.