Amicus Brief in Maryland Comptroller v. Wynne

42 Pages Posted: 30 Sep 2014 Last revised: 4 Nov 2015

See all articles by Michael S. Knoll

Michael S. Knoll

University of Pennsylvania Law School; University of Pennsylvania Wharton School -- Real Estate Department

Ruth Mason

University of Virginia School of Law

Date Written: September 26, 2014

Abstract

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.

Keywords: Dormant commerce clause, tax discrimination, Wynne, Complete Auto, Moorman, jefferson Lines, double taxation

Suggested Citation

Knoll, Michael S. and Mason, Ruth, Amicus Brief in Maryland Comptroller v. Wynne (September 26, 2014). U of Penn, Inst for Law & Econ Research Paper No. 14-38; Virginia Public Law and Legal Theory Research Paper No. 2014-67. Available at SSRN: https://ssrn.com/abstract=2502969 or http://dx.doi.org/10.2139/ssrn.2502969

Michael S. Knoll

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-6190 (Phone)
215-573-2025 (Fax)

University of Pennsylvania Wharton School -- Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

Ruth Mason (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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