How the Massachusetts Supreme Judicial Court Should Apply Wynne

8 Pages Posted: 16 Jan 2016 Last revised: 21 Mar 2016

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: December 21, 2015

Abstract

In this special report, Knoll and Mason discuss how the Massachusetts Supreme Judicial Court should apply Wynne when it hears on remand First Marblehead v. Commissioner of Revenue. The authors conclude that when it originally heard the case, the Massachusetts court mistakenly considered, as part of its internal consistency analysis, whether Gate Holdings Inc. experienced double state taxation. As developed by the U.S. Supreme Court and most recently applied in Wynne, the internal consistency test is not concerned with actual double taxation that may arise from the interaction of different states’ laws. Rather, the test is designed to determine whether the challenged state’s law alone discriminates against interstate commerce. The authors show how this standard applies to the challenged Massachusetts apportionment rules, and they conclude that in order to ascertain the constitutionality of the challenged Massachusetts law, the Massachusetts court must determine how the other states would tax Gate if the other states applied Massachusetts law for non-domiciled taxpayers.

Keywords: tax discrimination, dormant commerce clause, Wynne, Supreme Court, apportionment formulas, double taxation, state taxes

Suggested Citation

Knoll, Michael S. and Mason, Ruth, How the Massachusetts Supreme Judicial Court Should Apply Wynne (December 21, 2015). State Tax Notes, Vol. 78, P. 921, 2015; U of Penn, Inst for Law & Econ Research Paper No. 16-4. Available at SSRN: https://ssrn.com/abstract=2707731

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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