WASHINGTON (AP) — The Supreme Court has struck down a Maryland tax that has the effect of double-taxing income residents earned in other states.
The justices agreed Monday with a lower court that the tax is unconstitutional because it discourages Maryland residents from earning money outside the state.
The 5-4 ruling means the loss of hundreds of millions of dollars in revenue for Maryland and affects similar laws in other states, including New York, Indiana, Pennsylvania and Ohio.
Maryland allowed residents to deduct income taxes paid to other states from their state tax, but did not apply that deduction to a local “piggy back” tax collected for counties and some city governments.
Maryland claimed it had authority to tax all the income its residents earn to pay for local services like public schools.