In Comptroller of Treasury of Maryland v. Wynne, 135 U.S. 1787 (2015), the Supreme Court held that Maryland’s tax scheme was unconstitutional because it discouraged interstate commerce in violation of the Dormant Commerce Clause of the U.S. Constitution. Maryland’s tax scheme gave taxpayers credit for taxes paid to other states against the Maryland state income tax, but did not provide a credit against the county income tax. Therefore, out-of-state income was subject to double taxation, a tax burden not imposed on in-state income.
The Dormant Commerce Clause only gives Congress the ability to regulate interstate commerce, not intrastate commerce. However, shouldn’t activity prohibited at the state level also be prohibited at the municipal level? In Ohio, municipalities are given authority to impose taxes on personal income of both residents and non-residents. In effect, personal income made by an Ohio resident living in one municipality and working in another is taxed twice. In wake of Wynne, Ohio residents should look to a number of Constitutional and fairness arguments to consider whether Ohio’s municipal tax scheme could also be unconstitutional.
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