Amicus Brief in Maryland Comptroller v. Wynne

Michael S. Knoll, University of Pennsylvania Carey Law School
Ruth Mason, University of Virginia - Main Campus


The internal consistency test reveals that Maryland applies systematically higher “county” taxes to interstate commerce than to in-state commerce.

Economic analysis of Maryland’s tax regime — including its taxes on inbound, outbound, and domestic activities — confirms what the internal consistency test suggests, namely, that the Maryland “county” tax discourages interstate commerce. Specifically, the Maryland tax regime discourages Maryland residents from earning income outside of Maryland, and it simultaneously discourages nonresidents from earning income in Maryland. Maryland alone causes this distortion; the distortion does not depend on the taxes imposed by any other state.

Petitioner’s argument that Maryland’s outbound tax regime should be upheld because it is facially neutral when compared to Maryland’s domestic tax requires the Court to ignore Maryland’s inbound tax on nonresidents. Ignoring relevant parts of a state’s tax regime obscures the overall effect of that regime on interstate commerce. Although crediting other states’ taxes would cure Maryland’s dormant Commerce Clause violation, other practical and legitimate alternatives for curing the violation exist. Maryland, not the courts, should decide how to cure the constitutional infirmity in Maryland’s tax regime.