Maryland - Failure to provide a credit to local portion of personal income tax for out-of-state income is unconstitutional

February 2013


In a 5-2 decision, the Maryland Court of Appeals (the highest court in the state) found that the absence of a credit against the local portion of the state's personal income tax, with respect to a resident's out-of-state pass-through income from an S corporation, was unconstitutional. Pending future appeal, Maryland residents receiving income from out-of-state sources may be able to take a credit on the local portion of their Maryland income tax.

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