Supreme Court To Hear Case On Right Of Maryland To Tax Out-of-state Income

WASHINGTON — The U.S. Supreme Court is set to hear a case involving a Maryland couple who believe their out-of-state income should not be taxed by their state of residence.

Brian and Karen Wynne of Howard County argue the income they earn in several other states through Maxim Healthcare Services Inc., a company Mr. Wynne partially owns, should not be taxed by Maryland if they pay the income taxes in those other states.

Maryland has an out-of-state income tax credit that can be used to offset state income taxes. But there is no equivalent credit that can be used to offset county income taxes, so counties can tax the out-of-state income.

According to court documents, Comptroller of the Treasury of Maryland v. Wynne (No. 13-485) asks the question: “Does the United States Constitution prohibit a state from taxing all income of its residents — wherever earned — by mandating a credit for taxes paid on income in other states?”

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