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Maryland Case Headed To Supreme Court Could Shake Up State Income Taxes

Mike Chaput / Flickr / Creative Commons

Nobody likes to pay taxes. If they have to pay taxes on their income, they only want to pay once. Brian and Karen Wynne, who used to live in Howard County, took that argument up a notch. They contend that if their income is taxed more than once -- say, in Maryland and Howard County, and in other states where some of that income was earned -- Maryland is bound by the U.S. Constitution to refund all but one set of taxes. Maryland's highest court agreed with them in 2012, and now the case is headed to the U.S. Supreme Court.

Here's how it came about:  more than half of Brian Wynne's $2.7-million-dollar income in 2006 came from his earnings as president and part owner of Maxim Healthcare Services.  It's a national business organized in a way that doesn't pay taxes itself. Its earnings flow to its owners like wages on which they're taxed as individuals. The Wynnes paid Maryland and Howard County income taxes on the $2.7 million, plus they paid $84,000 in income taxes to 39 states outside Maryland where Maxim operates.

To find out what happened next, Sheilah Kast talks with the lawyers in the case. Dominic Perella, from the Washington law firm  Hogan Lovells is representing the Wynnes. And, William Brockman, an assistant attorney general for the State of Maryland, is representing the state, which is asking the U.S. Supreme Court to reverse the ruling by the Maryland Court of Appeals.

Sheilah Kast is the host of On The Record, Monday-Friday, 9:30-10:00 am.