Supreme Court on income taxes
WASHINGTON- How states can assess income tax on money residents earned out of state is being considered by the Supreme Court which could impose new limits.
A lawyer for the state of Maryland argued his state's tax on out-of-state earnings passes constitutional muster but some justices appeared skeptical Wednesday. If the court narrows the scope of tax collection it could cost states hundreds of millions of dollars in revenue.
A couple in Maryland argued the tax method used by that state imposes a double tax burden on them.
Maryland's highest court also ruled the tax in unconstitutional.
Maryland allows residents to deduct income taxes paid to other states from their Maryland state tax, but it does not apply to deductions to local tax collected for counties and some cities.