The Maryland Wynne Case is Decided, Will The State Appeal Further?
On January 28th, the Maryland Court of Appeals found in favor of the taxpayer stating the State has to allow a credit for taxes paid to other jurisdictions against both the state tax and the local (county) tax. The Court of Appeals is the highest court in Maryland and it is unclear at this time whether the State plans to appeal the decision to the U.S. Supreme Court. In the meantime, the decision is a clear victory for the taxpayer.
However, for those taxpayers that have filed Maryland protective claims, the Comptroller’s office has said they are compiling statistics to aid the Comptroller in his decision whether to appeal. Current year returns should continue to be filed under existing law (meaning take the non-resident state credit ONLY against the state tax). If the credit is also taken against the local tax portion, an assessment notice will be issued to the taxpayer as the State’s processing systems have not been adapted to allow the credit against the local tax.
Similar to earlier years, taxpayers having 2009 returns with a closing statute should file a protective claim prior to April 15th claiming the potential refund.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.