The U.S. Supreme Court ended its 2014-2015 term with two decisions that may influence your business operations. Here’s the scoop.
1. Maryland’s income tax system invalidated. Maryland’s state income tax system consists of state taxes and county taxes. Residents who pay income taxes to another state can credit those taxes against their state income tax liability but not their county tax liability.
A Maryland couple had income from an S corp. that did business in 39 states. The couple was allowed to claim a credit against their state income taxes but not their county taxes. State courts ruled that the tax system impermissibly burdened interstate commerce and, therefore, violated the Commerce Clause of the U.S. Constitution. The Supreme Court agreed, ruling that the two-tax, one-credit system discriminated against interstate commerce because it taxed out-of-state transactions more heavily than in-state transactions. (Maryland v...(register to read more)