ANNAPOLIS, Md. (AP) - A Supreme Court ruling in a Maryland tax case will cost the state an estimated $200 million in refunds it will have to pay residents stretching back seven or eight years, state officials estimated Monday.
The 5-4 decision also means Maryland counties will lose about $42 million annually in tax revenue going forward, after the high court ruled that it is unconstitutional not to allow a tax credit for money residents make in other states. Maryland does not apply the tax deduction on a local "piggy back" tax collected on income tax by counties.
Last month, lawmakers prepared for an unfavorable ruling by directing money to be paid out of a state reserve fund that is set aside to pay tax refunds. Lawmakers also stipulated that local governments will repay the money, staggered out over nine quarters to help soften the blow.
The ruling will have the biggest impact on Montgomery County, the state's largest jurisdiction in the suburbs of the nation's capital. County officials estimate the impact for the next fiscal year, which begins July 1, will be between $8 million and $10 million. The county's share of the repayment plan is estimated to be more than $50 million in fiscal year 2017. While Montgomery County's overall budget is about $5 billion, the set back is still significant.
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7 comments:
If they hadn't been greedy in the first place - they wouldn't have this problem now!
My wife works in Delaware and we live in Maryland. I work in Maryland. This year I owed over 500 dollars to Maryland due to the fact she worked in Delaware, even though I get an extra 20 dollars taken out of my Maryland check to try and cover this! I claim 0 deductions and still get slammed by this state!!! My property taxes are also more that double what I would pay for the same home and property in DE. This is good news and a right step in the right direction.
When are they going to do the same for people who live in Delaware but work in Maryland, we are charged additional taxes for not being a resident of Maryland, I lose an extra 500.00 a year because of this.
Thanks, O'Malley. You knew you were stealing from us all the while.
Dirtbag!
11:34 - you're not being nice to vacuum cleaners!
11:24
I also pay to Delaware even though I work in md because my wife works in DE. And that was almost 300 dollars.
I was burned by this for the 43 years I worked in Delaware.
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