Comptroller of the Treasury of Maryland v. Wynne (2014)
- Docket
- 13-485
- Decided
- 2014-01-01
Summary
Question: Does the dormant Commerce Clause of the Constitution prohibit states from taxing all the income of their residents by mandating a credit for taxes paid related to income earned in other states? Conclusion: Yes. Justice Samuel A. Alito, Jr. delivered the opinion of the 5-4 majority. The Court held that the dormant Commerce Clause prohibited a tax scheme like Maryland’s, which discriminates against interstate commerce without Congressional approval. This decision is directly in line with previous dormant Commerce Clause jurisprudence. The Court held that, to be permissible under the dormant Commerce Clause, a tax scheme must satisfy the “internal consistency test,” which asks whether the tax scheme in question would disadvantage interstate commerce if it were applied identically in every state. If so, then the tax is unconstitutional. Because Maryland’s tax scheme fails the internal consistency test, it is therefore unconstitutional under the dormant Commerce Clause. Justice Antonin Scalia wrote a dissent in which he argued that the dormant Commerce Clause does not exist in the Constitution. The Constitution explicitly gives the federal government the power to regulate interstate commerce, but it does not say anything about prohibiting state laws that burden interstate commerce. The supposed doctrine also lacks a governing principle as well as internal consistency. Justice Scalia also noted that following precedent would require the tax in this case to be held unconstitutional only if it discriminated against interstate commerce on its face and was indistinguishable from a tax the Court had previously held unconstitutional. Because those factors are not met in this case, the tax should be upheld. Justice Clarence Thomas joined in the dissent. In his separate dissent, Justice Thomas wrote that laws passed by the same legislators that ratified the Constitution would have violated the dormant Commerce Clause under the majority’s analysis. Therefore, that reading of the dormant Commerce Clause, assuming it exists at all, cannot be correct. Justice Scalia joined in the dissent. Justice Ruth Bader Ginsburg also wrote a separate dissent in which she argued that the dormant Commerce Clause does not prevent the operation of a tax scheme when the discriminatory effect is the result of the combination of two otherwise-lawful tax schemes, as is the case here. Although Maryland chooses not to offer tax credits for taxes paid out of state, it is still entitled to tax that income. Justice Ginsburg also noted that the Court has not rigidly enforced the “internal consistency test” and need not do so here. Justice Scalia and Justice Elena Kagan joined in the dissent.