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Court to hear dispute over state tax collection

  • Article by: SAM HANANEL
  • Associated Press
  • May 27, 2014 - 10:20 AM

WASHINGTON — WASHINGTON (AP) — The Supreme Court is taking up a dispute over how a state may tax income its residents earn in another state.

The high court agreed Tuesday to hear an appeal from Maryland officials to overturn a lower court ruling that found the state's tax law unconstitutional.

Maryland law allows residents to deduct income taxes paid to other states from their Maryland state tax. But it does not apply that deduction when it comes to local "piggyback taxes" the state collects for county and city governments.

Last year, the Maryland Court of Appeals said the tax violates the Constitution's Commerce Clause and discourages Maryland residents from earning money outside the state.

Maryland Attorney General Douglas Gansler says the state has authority to tax all income of its residents.

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