Maryland's Double Taxation of Residents Struck Down by Supreme Court. Tax Attorney Rob Wood Reports

On May 18, the Supreme Court decided a Maryland case involving double taxation. Maryland’s tax code does not give full credit to residents who also pay taxes in states where they work. The Court sided with the taxpayers, and the decision may cost some states and cities millions of dollars. Tax Attorney Rob Wood discusses the case in this report.

Rob Wood

Rob Wood

Wood characterizes the decision as “astounding.” This is another 5-4 decision, but the Court did not line up the way it often does in 5-4 cases. The decision is certainly bad news for Maryland. The decision could cost the state $200 million in tax losses and refunds. Another big issue is the effect the ruling will have on other states and cities around the country. Wood wonders how many claims and lawsuits will be brought in other places because of this case.

The tax approach used by Maryland is not unique, Wood says, noting that he is a Californian and has heard many of his fellow citizens complain that they don’t get credit for taxes paid elsewhere. Because of all sorts of things happening at state and municipal levels, it is not uncommon for people to be taxed twice on the same income and to receive no credit for the taxes paid. Wood opines that many taxpayers will be wondering whether the new case will provide some leverage for them in dealing with tax issues in their own locales.

For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.