Supreme Court strikes down Maryland double-tax law, other states could feel revenue pinch

The Supreme Court on Monday struck down a Maryland tax that effectively double-taxes residents for income earned in other states — a decision that could cost Maryland and other states with similar policies hundreds of millions of dollars.

In a 5-4 ruling, the justices agreed with a lower court that the tax is unconstitutional because it discourages Maryland residents from earning money outside the state.

“Maryland’s tax scheme is inherently discriminatory,” the justices wrote in the majority opinion. They wrote that the policy effectively discourages “interstate commerce.”

The ruling said: “If every State adopted Maryland’s tax structure, interstate commerce would be taxed at a higher rate than intrastate commerce.”

The ruling could have far-reaching consequences beyond just Maryland. It also could affect similar laws in other states, including New York, Indiana, Pennsylvania and Ohio.

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