MD Tax Refund Interest Rate Litigation

This website provides information to members of the plaintiff class in the lawsuit Holzheid v. Comptroller of the Treasury of Maryland. The Holzheid lawsuit challenges the interest rate being applied to certain income tax refunds due to Maryland taxpayers as a result of the Supreme Court’s decision in Comptroller of the Treasury of Maryland v. Wynne, __ U.S. __, 135 S.Ct. 1787 (2015). Class members in this lawsuit include Maryland taxpayers who paid income tax in other states between 2006 and 2014 for which they did not receive full credit in Maryland and filed a protective claim for a refund of that income tax (a “Wynne claim”). Normally, if a taxpayer is owed and files for a refund, interest begins accruing at the rate of 13% on the refund from the 45th day after the claim is filed. However, in 2014 the General Assembly passed a law mandating that Wynne claims would receive only 3% interest from 45 days after the time they were filed until the time they are paid. The Holzheid lawsuit alleges that the application of a lower interest rate only to Wynne claims violates certain federal constitutional provisions that prevent the State from taking a property right without due process or just compensation and from burdening interstate commerce. It is estimated that, by applying the lower interest rate of 3% toWynne claims, the State is depriving class members of a total of $38.4 million. You can read the full complaint and amended complaint here.