Supreme Court

Alito Clashes With Scalia and Thomas Over Constitutionality of Maryland Double-Taxation Scheme

The conservative justices divide in Comptroller of the Treasury of Maryland v. Wynne


In a 5-4 decision issued today, the U.S. Supreme Court ruled a Maryland tax scheme unconstitutional because it forces state residents to pay taxes twice on income they earned outside of the state.

At issue in Comptroller of the Treasury of Maryland v. Wynne is a Maryland tax law that requires state residents to pay county income taxes on 100 percent of their personal income. Unlike most other states, however, Maryland takes no notice of the fact that many residents earn income—and pay taxes on it—outside of the state. Most other states offer a tax credit in this situation so that state residents don't end up paying twice. Maryland just makes its residents pay twice.

Public Domain

Or at least it did until today. Because Maryland "creates an incentive for taxpayers to opt for intrastate rather than interstate economic activity," declared the majority opinion of Justice Samuel Alito, "its law has the same economic effect as a state tariff, the quintessential evil targeted by the dormant Commerce Clause."

The dormant Commerce Clause refers to the idea that the Commerce Clause, in addition to granting Congress a limited power to regulate interstate commerce, also provides a check on the regulatory and taxing authority of the states. That check, Alito explained, forbids the states "from discriminating against or imposing excessive burdens on interstate commerce," such as Maryland's now-defunct double-taxation scheme. Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer, and Sonia Sotomayor all joined Alito's opinion.

Alito's sharpest critics proved to be two of his most conservative colleagues, Justices Antonin Scalia and Clarence Thomas. Scalia and Thomas each filed separate dissenting opinions, as did Justice Ruth Bader Ginsburg, whose dissent was joined by Justice Elena Kagan. According to Scalia, the dormant Commerce Clause is a "judicial fraud" that allows federal judges to rewrite state laws according to their own preferences. Thomas, meanwhile, argued that Alito's take was totally at odds with constitutional history. "It seems highly implausible that those who ratified the Commerce Clause understood it to conflict with the income tax laws of their States and nonetheless adopted it without a word of concern," Thomas wrote.

Alito's majority opinion tackled those two dissents head on. "This supposedly fraudulent doctrine has been applied in dozens of our opinions, joined by dozens of Justices," Alito shot back at Scalia. As for Thomas, Alito described his arguments as "plainly unsound." The ratifiers of the Constitution appear unconcerned with this kind of out-of-state tax grab, Alito countered, because so few people back then lived in one state and earned income in another. "We are unaware of records showing, for example, that it was common in 1787 for workers to commute to Manhattan from New Jersey by rowboat or from Connecticut by stagecoach," Alito quipped.

In sum, Alito held, "our existing dormant Commerce Clause cases all but dictate the result reached in this case."

The Supreme Court's opinion in Comptroller of the Treasury of Maryland v. Wynne is available here.

NEXT: Control Freaks' Solution to Shadow Economy: Nag People and Abolish Cash

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I always find this weird doctrinal rift decisions interesting. Usually a 5-4 indicates a red-blue divide, but this is in that class of odd splits that make you go ‘huh’ and have to think about it longer.

    Of course, the ruling should have said maryland didn’t have the right to tax, but we’d never see that. (Beyond the fact that I don’t think there’s constitutional grounds for that line of reasoning…)

    1. Middle vs Extreme.

      Not much huh too it.

  2. OH NO HE DI’N’T!

  3. Only 5-4, huh?

    We’re boned.

  4. This actually seems to be an appropriate use of the CC. I would go farther though. How can q state tax an activity that happens in a different state?

    1. How can q state tax an activity that happens in a different state?

      How can the IRS tax a nonresident?

      Say it with me folks…

      1. Hitler?

        1. No, no, no. Spencer got it.

          1. It’s the same reason why I can’t hire the best person for the position without the government’s permission (if they happened to be born in another country). Because FYTW.

            1. What field is your business in?

              1. Does it matter? (I’m a library director.) I can get special permission for special positions… but special permission is still permission, no?

                1. Because with some fields, it strains credulity and flies in the face of evidence when the claim is made. If anyone would come out and say “we want to hire the guys that will do the same work for less”, I’d have more respect for them. I’ve worked places where the best guy for the job got laid off for someone cheaper, and I still hold a grudge from being the guy laid off. (I have the objective numbers to back it up) So it’s my bitterness talking. I don’t know much about library direction.

                  1. sometimes costing less is exactly what makes you the best person for the position.

    2. because FYTW!

      1. Oh, you all love the social programs and safety nets, but when we have get people who don’t live here anymore and can’t use them to nonetheless help pay for them, you get all indignant all the sudden.

        1. I’m confused by your statement. I don’t love safety nets… jI also don’t love making people pay for them… or allowing them to use them.

          1. First you don’t want the safety nets, and now you don’t want to pay for them. Make up your mind!

  5. I wonder if the Use Tax has ever been challenged. Being forced to pay sales tax on goods purchased in another state seems like a tariff to me.

    1. Unless one is specifically buying across state lines to avoid taxation… right? In Texas you have to pay tax on cars purchased in another state- even if you’ve paid taxes in that state upon purchase. I think it’s because those taxes are supposed to support infrastructure and roadways- and if you live here you’re driving on them…

      I don’t know

      1. How is sales tax in itself not a tariff, as most products will cross the boundaries of the polities involved (New York has county and city level sales taxes on top of the state tax)

        1. Are tariffs not usually applied to the manufacturer/seller and not the buyer?

          1. sorry, read as stupid as it is after I typed it. Unfinished thought that needed to die.

            1. Sorry I answered your unfinished thought. Your retraction wasn’t on my screen yet.

          2. The seller does pay the sales tax – they just very obviously pass on the cost to the buyer. All the forms and records are kept by the seller, they are the ones most often hit with enforcement actions and the burden of compliance lies on them for the most part.

    2. What about the mom and pop neighborhood stores? What about THEM?

      You won’t patronize small business and then, all hell will break loose.

      Just fork over the moolah.

    3. Once you realize the sales tax is essentially a property tax (paid at time of purchase, remitted by the seller as an enforcement convenience) it makes more sense. This is why services were never subject to the tax, until people got used to the idea of it being a “sales” tax and then any transaction was considered fair game.

      Recall that the “sales” tax replaced excise taxes where they were originally implemented. Of course we still have excise taxes, generally called “sin” taxes nowadays. The idea is tax something and you will have less of it.

      So of course if you tax legitimate trade you will get less of it.

  6. On another SCOTUS-related note, they decided that a convicted felon is permitted to sell their firearms instead of having them stolen by the state. It was a 9-0 ruling.

    1. Nice. It makes you wonder why it even had to get that far…

  7. For the most part I like Thomas’s pinio.s, but I don’t think Maryland’s ratifiers of the Commerce Clause contemplated state income taxes at all.

    1. Probably not, as Income taxes had not been a thing at the time.

      The inception date of the modern income tax is typically accepted as 1799,[4] at the suggestion of Dr Beeke, Dean of Bristol.[5] This income tax was introduced into Great Britain by Prime Minister William Pitt the Younger in his budget of December 1798, to pay for weapons and equipment for the French Revolutionary War.

      1. Yes, I know that’s a reference to the UK, but they were tax pioneers on the subject.

      2. Damn that Pitt eh Younger. He was horrible.

        1. Yeah, that whole abolition thing really sucked!

        2. Not sure how it took this long, but:


  8. The most interesting jurisprudential arguments now are conservative v. conservative. That’s where you see intelligent people debating each other over sensible premises, drawing different conclusions from those premises.

    Sometime you get a liberal saying something sensible – like Sotomayor’s lone dissent about cops being expected to know the law – but generally they’re less interesting than intra-conservative clashes.

  9. So Scalia wants to be a commerce clause originalist when it constrains state power, but he’ll write opinions like Raich when it expands it. So much for intellectual consistency.

    And while we’re on the topic of judicial frauds, maybe Scalia would like to take up the completely judge-made doctrine of qualified immunity.

    1. Argh, that should be “So Scalia wants to be a commerce clause originalist when it expands state power, but he’ll write opinions like Raich when originalism would constrain state power.”

  10. The ratifiers of the Constitution appear unconcerned with this kind of out-of-state tax grab, Alito countered, because so few people back then lived in one state and earned income in another.

    Also, no state imposed an income tax until 1911.

    1. It’s somewhat frightening that BOTH sides use tortured logic as their counterpoints when simple facts can be found in a matter of seconds.

      But Clarence Thomas sure looks like a shit-for-brains here.

      1. I disagree here. Thomas has almost universally been in favor of federalism and state power.

        I like the ends of this ruling, but if you don’t like Maryland taxing your out of state income move out of Maryland. I don’t see how this is a tariff on interstate commerce.

        Maybe they can use this to roll back the federal power grab on foreign income.

        1. Selling your labor is commerce.

          This isn’t some new thing a state just figured out. In general states usually have reciprocal agreements such that the labor is taxed in the state in which the labor was sold/performed or in which the worker resides. This is another reason why Thomas is so wrong, states already knew this which is part of the reason why they came up with their reciprocal agreements.

          Drill down far enough in the article links and the salent point is this: The operative rule is what the Supreme Court has called an “internal consistency” test: if every state applied this tax regime, would that expose interstate commerce to burdens not suffered by in-state commerce? Maryland’s regime violates that test.

          1. “if every state applied this tax regime, would that expose interstate commerce to burdens not suffered by in-state commerce? ”

            There are no end of laws that provide an incentive to buy in state. This is just the Supremes making shit up again.

    2. I like the row boat analogy.

      1. I didn’t. It’s not like barges and ferries weren’t common at the time.

        1. Picky, picky, picky

  11. Alioto’s witticism is completely off the mark. A major purpose of the Constitution was to set up a federal court system that would ensure unbiased (pretty much) justice for a citizen of one state conducting business in another state. The movers and shakers behind the Constitution–Southern planters and Northern merchants–were precisely the people whose economic interests were not bounded by one state. However, his decision is quite consistent with the “spirit” of the original Constitution, which was to keep small-time politicians from nickel and dimeing the big shots (a big shot in those days being anyone who had income in two different states).

  12. Ticks GOTTA have their blood meal.
    Damn you, Alioto!! Damn you all to hell!

  13. As for Thomas, Alito described his arguments as “plainly unsound.”

    “I don’t have a real argument, so I’ll just call you a poopy pants.”

    Because Maryland “creates an incentive for taxpayers to opt for intrastate rather than interstate economic activity,”

    So what? Tax rates change incentives. Is this news? One state has a sales tax, another state doesn’t. In the state without the tax, the lack of a sales tax “creates an incentive for taxpayers to opt for intrastate rather than interstate economic activity”.

    Does that mean all states have to have identical sales tax rates, to avoid this evil incentive to “opt for intrastate rather than interstate economic activity”?

    Most of SCOTUS just makes up shit according the their preferences. I don’t know how Thomas can stand “arguing” with these bullshitters.

  14. My best friend’s mother-in-law makes $85 /hour on the internet . She has been out of work for 5 months but last month her pay was $16453 just working on the internet for a few hours.
    Visit this website ?????

Please to post comments

Comments are closed.