Comptroller of Treasury of Md. v. Wynne

(Slip Opinion) OCTOBER TERM, 2014 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
COMPTROLLER OF THE TREASURY OF MARYLAND
v. WYNNE ET UX.
CERTIORARI TO THE COURT OF APPEALS OF MARYLAND
No. 13–485. Argued November 12, 2014—Decided May 18, 2015
Maryland’s personal income tax on state residents consists of a “state”
income tax, Md. Tax-Gen. Code Ann. §10–105(a), and a “county” in-
come tax, §§10–103, 10–106. Residents who pay income tax to anoth-
er jurisdiction for income earned in that other jurisdiction are al-
lowed a credit against the “state” tax but not the “county” tax. §10–
703. Nonresidents who earn income from sources within Maryland
must pay the “state” income tax, §§10–105(d), 10–210, and nonresi-
dents not subject to the county tax must pay a “special nonresident
tax” in lieu of the “county” tax, §10–106.1.
Respondents, Maryland residents, earned pass-through income
from a Subchapter S corporation that earned income in several
States. Respondents claimed an income tax credit on their 2006
Maryland income tax return for taxes paid to other States. The Mary-
land State Comptroller of the Treasury, petitioner here, allowed re-
spondents a credit against their “state” income tax but not against
their “county” income tax and assessed a tax deficiency. That deci-
sion was affirmed by the Hearings and Appeals Section of the Comp-
troller’s Office and by the Maryland Tax Court, but the Circuit Court
for Howard County reversed on the ground that Maryland’s tax sys-
tem violated the Commerce Clause of the Federal Constitution. The
Court of Appeals of Maryland affirmed and held that the tax uncon-
stitutionally discriminated against interstate commerce.
Held: Maryland’s personal income tax scheme violates the dormant
Commerce Clause. Pp. 4–28.
(a) The Commerce Clause, which grants Congress power to “regu-
late Commerce . . . among the several States,” Art I, §8, cl. 3, also has
“a further, negative command, known as the dormant Commerce
Clause,” Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S.
2 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Syllabus
175, 179, which precludes States from “discriminat[ing] between
transactions on the basis of some interstate element,” Boston Stock
Exchange v. State Tax Comm’n, 429 U.S. 318, 332, n. 12. Thus, inter
alia, a State “may not tax a transaction or incident more heavily
when it crosses state lines than when it occurs entirely within the
State,” Armco Inc. v. Hardesty, 467 U.S. 638, 642, or “impose a tax
which discriminates against interstate commerce either by providing
a direct commercial advantage to local business, or by subjecting in-
terstate commerce to the burden of ‘multiple taxation,’ ” Northwestern
States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458. Pp. 4–
6.
(b) The result in this case is all but dictated by this Court’s
dormant Commerce Clause cases, particularly J. D. Adams Mfg. Co.
v. Storen, 304 U.S. 307, 311, Gwin, White & Prince, Inc. v.
Henneford, 305 U.S. 434, 439, and Central Greyhound Lines, Inc. v.
Mealey, 334 U.S. 653, 662, which all invalidated state tax schemes
that might lead to double taxation of out-of-state income and that
discriminated in favor of intrastate over interstate economic activity.
Pp. 6–7.
(c) This conclusion is not affected by the fact that these three cases
involved a tax on gross receipts rather than net income, and a tax on
corporations rather than individuals. This Court’s decisions have
previously rejected the formal distinction between gross receipts and
net income taxes. And there is no reason the dormant Commerce
Clause should treat individuals less favorably than corporations; in
addition, the taxes invalidated in J. D. Adams and Gwin, White ap-
plied to the income of both individuals and corporations. Nor does
the right of the individual to vote in political elections justify dispar-
ate treatment of corporate and personal income. Thus the Court has
previously entertained and even sustained dormant Commerce
Clause challenges by individual residents of the State that imposed
the alleged burden on interstate commerce. See Department of Reve-
nue of Ky. v. Davis, 553 U.S. 328, 336; Granholm v. Heald, 544 U.S.
460, 469 (2005). Pp. 7–12.
(d) Maryland’s tax scheme is not immune from dormant Commerce
Clause scrutiny simply because Maryland has the jurisdictional pow-
er under the Due Process Clause to impose the tax. “[W]hile a state
may, consistent with the Due Process Clause, have the authority to
tax a particular taxpayer, imposition of the tax may nonetheless vio-
late the Commerce Clause.” Quill Corp. v. North Dakota, 504 U.S.
298, 305. Pp. 12–15.
(e) Maryland’s income tax scheme discriminates against interstate
commerce. The “internal consistency” test, which helps courts identi-
fy tax schemes that discriminate against interstate commerce, as-
Cite as: 575 U. S. ____ (2015) 3
Syllabus
sumes that every State has the same tax structure. Maryland’s in-
come tax scheme fails the internal consistency test because if every
State adopted Maryland’s tax structure, interstate commerce would
be taxed at a higher rate than intrastate commerce. Maryland’s tax
scheme is inherently discriminatory and operates as a tariff, which is
fatal because tariffs are “[t]he paradigmatic example of a law dis-
criminating against interstate commerce.” West Lynn Creamery, Inc.
v. Healy, 512 U.S. 186, 193. Petitioner emphasizes that by offering
residents who earn income in interstate commerce a credit against
the “state” portion of the income tax, Maryland actually receives less
tax revenue from residents who earn income from interstate com-
merce rather than intrastate commerce, but this argument is a red
herring. The critical point is that the total tax burden on interstate
commerce is higher. Pp. 18–26.
431 Md. 147, 64 A.3d 453, affirmed.
ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J.,
and KENNEDY, BREYER, and SOTOMAYOR, JJ., joined. SCALIA, J., filed a
dissenting opinion, in which THOMAS, J., joined as to Parts I and II.
THOMAS, J., filed a dissenting opinion, in which SCALIA, J., joined except
as to the first paragraph. GINSBURG, J., filed a dissenting opinion, in
which SCALIA and KAGAN, JJ., joined.
Cite as: 575 U. S. ____ (2015) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash­
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–485
_________________
COMPTROLLER OF THE TREASURY OF MARYLAND,
PETITIONER v. BRIAN WYNNE ET UX.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
MARYLAND
[May 18, 2015]
JUSTICE ALITO delivered the opinion of the Court.
This case involves the constitutionality of an unusual
feature of Maryland’s personal income tax scheme. Like
many other States, Maryland taxes the income its resi­
dents earn both within and outside the State, as well as
the income that nonresidents earn from sources within
Maryland. But unlike most other States, Maryland does
not offer its residents a full credit against the income
taxes that they pay to other States. The effect of this
scheme is that some of the income earned by Maryland
residents outside the State is taxed twice. Maryland’s
scheme creates an incentive for taxpayers to opt for intra­
state rather than interstate economic activity.
We have long held that States cannot subject corporate
income to tax schemes similar to Maryland’s, and we see
no reason why income earned by individuals should be
treated less favorably. Maryland admits that its law has
the same economic effect as a state tariff, the quintessen­
tial evil targeted by the dormant Commerce Clause. We
therefore affirm the decision of Maryland’s highest court
and hold that this feature of the State’s tax scheme vio­
2 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
lates the Federal Constitution.
I
Maryland, like most States, raises revenue in part by
levying a personal income tax. The income tax that Mary­
land imposes upon its own residents has two parts: a
“state” income tax, which is set at a graduated rate, Md.
Tax-Gen. Code Ann. §10–105(a) (Supp. 2014), and a so-
called “county” income tax, which is set at a rate that
varies by county but is capped at 3.2%, §§10–103, 10–106
(2010). Despite the names that Maryland has assigned to
these taxes, both are State taxes, and both are collected by
the State’s Comptroller of the Treasury. Frey v. Comptrol-
ler of Treasury, 422 Md. 111, 125, 141–142, 29 A.3d 475,
483, 492 (2011). Of course, some Maryland residents earn
income in other States, and some of those States also tax
this income. If Maryland residents pay income tax to
another jurisdiction for income earned there, Maryland
allows them a credit against the “state” tax but not the
“county” tax. §10–703; 431 Md. 147, 156–157, 64 A.3d
453, 458 (2013) (case below). As a result, part of the in­
come that a Maryland resident earns outside the State
may be taxed twice.
Maryland also taxes the income of nonresidents. This
tax has two parts. First, nonresidents must pay the
“state” income tax on all the income that they earn from
sources within Maryland. §§10–105(d) (Supp. 2014), 10–
210 (2010). Second, nonresidents not subject to the county
tax must pay a “special nonresident tax” in lieu of the
“county” tax. §10–106.1; Frey, supra, at 125–126, 29 A.
3d, at 483. The “special nonresident tax” is levied on
income earned from sources within Maryland, and its rate
is “equal to the lowest county income tax rate set by any
Maryland county.” §10–106.1. Maryland does not tax the
income that nonresidents earn from sources outside Mary­
land. See §10–210.
Cite as: 575 U. S. ____ (2015) 3
Opinion of the Court
Respondents Brian and Karen Wynne are Maryland
residents. In 2006, the relevant tax year, Brian Wynne
owned stock in Maxim Healthcare Services, Inc., a Sub-
chapter S corporation.1 That year, Maxim earned income
in States other than Maryland, and it filed state income
tax returns in 39 States. The Wynnes earned income
passed through to them from Maxim. On their 2006 Mary­
land tax return, the Wynnes claimed an income tax credit
for income taxes paid to other States.
Petitioner, the Maryland State Comptroller of the
Treasury, denied this claim and assessed a tax deficiency.
In accordance with Maryland law, the Comptroller allowed
the Wynnes a credit against their Maryland “state” income
tax but not against their “county” income tax. The Hear­
ings and Appeals Section of the Comptroller’s Office
slightly modified the assessment but otherwise affirmed.
The Maryland Tax Court also affirmed, but the Circuit
Court for Howard County reversed on the ground that
Maryland’s tax system violated the Commerce Clause.
The Court of Appeals of Maryland affirmed. 431 Md.
147, 64 A.3d 453. That court evaluated the tax under the
four-part test of Complete Auto Transit, Inc. v. Brady, 430
——————
1 Under federal law, S corporations permit shareholders “to elect a
‘pass-through’ taxation system under which income is subjected to only
one level of taxation. The corporation’s profits pass through directly to
its shareholders on a pro rata basis and are reported on the sharehold­
ers’ individual tax returns.” Gitlitz v. Commissioner, 531 U.S. 206, 209
(2001) (citation omitted). Maryland affords similar pass-through
treatment to the income of an S corporation. 431 Md. 147, 158, 64 A.3d
453, 459 (2013). By contrast, C corporations—organized under Sub-
chapter C rather than S of Chapter 1 of the Internal Revenue Code—
must pay their own taxes because they are considered to be separate
tax entities from their shareholders. 14A W. Fletcher, Cyclopedia of
the Law of Corporations §§6971, 6973 (rev. ed. 2008 and Cum. Supp.
2014–2015). Because of limitations on the number and type of share­
holders they may have, S corporations tend to be smaller, more closely
held corporations. Id., §§7025.50, 7026.
4 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
U. S. 274 (1977), which asks whether a “tax is applied to
an activity with a substantial nexus with the taxing State,
is fairly apportioned, does not discriminate against inter­
state commerce, and is fairly related to the services pro­
vided by the State.” Id., at 279. The Court of Appeals
held that the tax failed both the fair apportionment and
nondiscrimination parts of the Complete Auto test. With
respect to fair apportionment, the court first held that the
tax failed the “internal consistency” test because if every
State adopted Maryland’s tax scheme, interstate com­
merce would be taxed at a higher rate than intrastate
commerce. It then held that the tax failed the “external
consistency” test because it created a risk of multiple
taxation. With respect to nondiscrimination, the court
held that the tax discriminated against interstate com­
merce because it denied residents a credit on income taxes
paid to other States and so taxed income earned interstate
at a rate higher than income earned intrastate. The court
thus concluded that Maryland’s tax scheme was unconsti­
tutional insofar as it denied the Wynnes a credit against
the “county” tax for income taxes they paid to other States.
Two judges dissented and argued that the tax did not
violate the Commerce Clause. The Court of Appeals later
issued a brief clarification that “[a] state may avoid dis­
crimination against interstate commerce by providing a
tax credit, or some other method of apportionment, to
avoid discriminating against interstate commerce in viola­
tion of the dormant Commerce Clause.” 431 Md., at 189,
64 A. 3d at 478.
We granted certiorari. 572 U. S. ___ (2014).
II
A
The Commerce Clause grants Congress power to “regu­
late Commerce . . . among the several States.” Art. I, § 8,
cl. 3. These “few simple words . . . reflected a central
Cite as: 575 U. S. ____ (2015) 5
Opinion of the Court
concern of the Framers that was an immediate reason for
calling the Constitutional Convention: the conviction that
in order to succeed, the new Union would have to avoid
the tendencies toward economic Balkanization that had
plagued relations among the Colonies and later among the
States under the Articles of Confederation.” Hughes v.
Oklahoma, 441 U.S. 322, 325–326 (1979). Although the
Clause is framed as a positive grant of power to Congress,
“we have consistently held this language to contain a
further, negative command, known as the dormant Com­
merce Clause, prohibiting certain state taxation even
when Congress has failed to legislate on the subject.”
Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S.
175, 179 (1995).
This interpretation of the Commerce Clause has been
disputed. See Camps Newfound/Owatonna, Inc. v. Town
of Harrison, 520 U.S. 564, 609–620 (1997) (THOMAS, J.,
dissenting); Tyler Pipe Industries, Inc. v. Washington State
Dept. of Revenue, 483 U.S. 232, 259–265 (1987) (SCALIA,
J., concurring in part and dissenting in part); License
Cases, 5 How. 504, 578–579 (1847) (Taney, C. J.). But it
also has deep roots. See, e.g., Case of the State Freight
Tax, 15 Wall. 232, 279–280 (1873); Cooley v. Board of
Wardens of Port of Philadelphia ex rel. Soc. for Relief of
Distressed Pilots, 12 How. 299, 318–319 (1852); Gibbons v.
Ogden, 9 Wheat. 1, 209 (1824) (Marshall, C. J.). By pro­
hibiting States from discriminating against or imposing
excessive burdens on interstate commerce without con­
gressional approval, it strikes at one of the chief evils that
led to the adoption of the Constitution, namely, state
tariffs and other laws that burdened interstate commerce.
Fulton Corp. v. Faulkner, 516 U.S. 325, 330–331 (1996);
Hughes, supra, at 325; Welton v. Missouri, 91 U.S. 275,
280 (1876); see also The Federalist Nos. 7, 11 (A. Hamil­
ton), and 42 (J. Madison).
Under our precedents, the dormant Commerce Clause
6 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
precludes States from “discriminat[ing] between transac­
tions on the basis of some interstate element.” Boston
Stock Exchange v. State Tax Comm’n, 429 U.S. 318, 332,
n. 12 (1977). This means, among other things, that a
State “may not tax a transaction or incident more heavily
when it crosses state lines than when it occurs entirely
within the State.” Armco Inc. v. Hardesty, 467 U.S. 638,
642 (1984). “Nor may a State impose a tax which discrim­
inates against interstate commerce either by providing a
direct commercial advantage to local business, or by sub­
jecting interstate commerce to the burden of ‘multiple
taxation.’ ” Northwestern States Portland Cement Co. v.
Minnesota, 358 U.S. 450, 458 (1959) (citations omitted).
B
Our existing dormant Commerce Clause cases all but
dictate the result reached in this case by Maryland’s high­
est court. Three cases involving the taxation of the income
of domestic corporations are particularly instructive.
In J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307 (1938),
Indiana taxed the income of every Indiana resident (in­
cluding individuals) and the income that every nonresi­
dent derived from sources within Indiana. Id., at 308.
The State levied the tax on income earned by the plaintiff
Indiana corporation on sales made out of the State. Id., at
309. Holding that this scheme violated the dormant
Commerce Clause, we explained that the “vice of the
statute” was that it taxed, “without apportionment, re­
ceipts derived from activities in interstate commerce.” Id.,
at 311. If these receipts were also taxed by the States in
which the sales occurred, we warned, interstate commerce
would be subjected “to the risk of a double tax burden to
which intrastate commerce is not exposed, and which the
commerce clause forbids.” Ibid.
The next year, in Gwin, White & Prince, Inc. v.
Henneford, 305 U.S. 434 (1939), we reached a similar
Cite as: 575 U. S. ____ (2015) 7
Opinion of the Court
result. In that case, the State of Washington taxed all the
income of persons doing business in the State. Id., at 435.
Washington levied that tax on income that the plaintiff
Washington corporation earned in shipping fruit from
Washington to other States and foreign countries. Id., at
436–437. This tax, we wrote, “discriminates against inter­
state commerce, since it imposes upon it, merely because
interstate commerce is being done, the risk of a multiple
burden to which local commerce is not exposed.” Id., at
439.
In the third of these cases involving the taxation of a
domestic corporation, Central Greyhound Lines, Inc. v.
Mealey, 334 U.S. 653 (1948), New York sought to tax the
portion of a domiciliary bus company’s gross receipts that
were derived from services provided in neighboring States.
Id., at 660; see also id., at 665 (Murphy, J., dissenting)
(stating that the plaintiff was a New York corporation).
Noting that these other States might also attempt to tax
this portion of the company’s gross receipts, the Court held
that the New York scheme violated the dormant Com­
merce Clause because it imposed an “unfair burden” on
interstate commerce. Id., at 662 (majority opinion).
In all three of these cases, the Court struck down a state
tax scheme that might have resulted in the double taxa­
tion of income earned out of the State and that discrimi­
nated in favor of intrastate over interstate economic activ­
ity. As we will explain, see Part II–F, infra, Maryland’s
tax scheme is unconstitutional for similar reasons.
C
The principal dissent distinguishes these cases on the
sole ground that they involved a tax on gross receipts
rather than net income. We see no reason why the dis­
tinction between gross receipts and net income should
matter, particularly in light of the admonition that we
must consider “not the formal language of the tax statute
8 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
but rather its practical effect.” Complete Auto, 430 U.S.,
at 279. The principal dissent claims, post, at 13 (opinion
of GINSBURG, J.), that “[t]he Court, historically, has taken
the position that the difference between taxes on net
income and taxes on gross receipts from interstate com­
merce warrants different results.” 2 C. Trost & P. Hart­
man, Federal Limitations on State and Local Taxation 2d
§10:1, p. 251 (2003) (emphasis added) (hereinafter Trost).
But this historical point is irrelevant. As the principal
dissent seems to acknowledge, our cases rejected this
formal distinction some time ago. And the distinction
between gross receipts and net income taxes was not the
basis for our decisions in J. D. Adams, Gwin, White, and
Central Greyhound, which turned instead on the threat of
multiple taxation.
The discarded distinction between taxes on gross re­
ceipts and net income was based on the notion, endorsed
in some early cases, that a tax on gross receipts is an
impermissible “direct and immediate burden” on inter­
state commerce, whereas a tax on net income is merely an
“indirect and incidental” burden. United States Glue Co.
v. Town of Oak Creek, 247 U.S. 321, 328–329 (1918); see
also Shaffer v. Carter, 252 U.S. 37, 57 (1920). This arid
distinction between direct and indirect burdens allowed
“very little coherent, trustworthy guidance as to tax valid­
ity.” 2 Trost §9:1, at 212. And so, beginning with Justice
Stone’s seminal opinion in Western Live Stock v. Bureau of
Revenue, 303 U.S. 250 (1938), and continuing through
cases like J. D. Adams and Gwin, White, the direct-
indirect burdens test was replaced with a more practical
approach that looked to the economic impact of the tax.
These cases worked “a substantial judicial reinterpreta­
tion of the power of the States to levy taxes on gross in­
come from interstate commerce.” 1 Trost §2:20, at 175.
After a temporary reversion to our earlier formalism,
see Spector Motor Service, Inc. v. O’Connor, 340 U.S. 602
 Cite as: 575 U. S. ____ (2015) 9
Opinion of the Court
(1951), “the gross receipts judicial pendulum has swung in
a wide arc, recently reaching the place where taxation of
gross receipts from interstate commerce is placed on an
equal footing with receipts from local business, in Com-
plete Auto Transit Inc. v. Brady,” 2 Trost §9:1, at 212. And
we have now squarely rejected the argument that the
Commerce Clause distinguishes between taxes on net and
gross income. See Jefferson Lines, 514 U.S., at 190 (ex­
plaining that the Court in Central Greyhound “understood
the gross receipts tax to be simply a variety of tax on
income”); Moorman Mfg. Co. v. Bair, 437 U.S. 267, 280
(1978) (rejecting a suggestion that the Commerce Clause
distinguishes between gross receipts taxes and net income
taxes); id., at 281 (Brennan, J., dissenting) (“I agree with
the Court that, for purposes of constitutional review, there
is no distinction between a corporate income tax and a
gross-receipts tax”); Complete Auto, supra, at 280 (uphold­
ing a gross receipts tax and rejecting the notion that the
Commerce Clause places “a blanket prohibition against
any state taxation imposed directly on an interstate
transaction”).2
For its part, petitioner distinguishes J. D. Adams, Gwin,
White, and Central Greyhound on the ground that they
concerned the taxation of corporations, not individuals.
But it is hard to see why the dormant Commerce Clause
should treat individuals less favorably than corporations.
——————
2 The principal dissent mischaracterizes the import of the Court’s
statement in Moorman that a gross receipts tax is “ ‘more burdensome’ ”
than a net income tax. Post, at 13. This was a statement about the
relative economic impact of the taxes (a gross receipts tax applies
regardless of whether the corporation makes a profit). It was not, as
Justice Brennan confirmed in dissent, a suggestion that net income
taxes are subject to lesser constitutional scrutiny than gross receipts
taxes. Indeed, we noted in Moorman that “the actual burden on inter­
state commerce would have been the same had Iowa imposed a plainly
valid gross-receipts tax instead of the challenged [net] income tax.”
Moorman Mfg. Co. v. Bair, 437 U.S. 267, 280–281 (1978).
10 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
See Camps Newfound, 520 U.S., at 574 (“A tax on real
estate, like any other tax, may impermissibly burden
interstate commerce” (emphasis added)). In addition, the
distinction between individuals and corporations cannot
stand because the taxes invalidated in J. D. Adams and
Gwin, White applied to the income of both individuals and
corporations. See Ind. Stat. Ann., ch. 26, §64–2602 (Burns
1933) (tax in J. D. Adams); 1935 Wash. Sess. Laws ch.
180, Tit. II, §4(e), pp. 710–711 (tax in Gwin, White).
Attempting to explain why the dormant Commerce
Clause should provide less protection for natural persons
than for corporations, petitioner and the Solicitor General
argue that States should have a free hand to tax their
residents’ out-of-state income because States provide their
residents with many services. As the Solicitor General
puts it, individuals “reap the benefits of local roads, local
police and fire protection, local public schools, [and] local
health and welfare benefits.” Brief for United States as
Amicus Curiae 30.
This argument fails because corporations also benefit
heavily from state and local services. Trucks hauling a
corporation’s supplies and goods, and vehicles transport­
ing its employees, use local roads. Corporations call upon
local police and fire departments to protect their facilities.
Corporations rely on local schools to educate prospective
employees, and the availability of good schools and other
government services are features that may aid a corpora­
tion in attracting and retaining employees. Thus, dispar­
ate treatment of corporate and personal income cannot be
justified based on the state services enjoyed by these two
groups of taxpayers.
The sole remaining attribute that, in the view of peti­
tioner, distinguishes a corporation from an individual for
present purposes is the right of the individual to vote. The
principal dissent also emphasizes that residents can vote
to change Maryland’s discriminatory tax law. Post, at 3–4.
Cite as: 575 U. S. ____ (2015) 11
Opinion of the Court
The argument is that this Court need not be concerned
about state laws that burden the interstate activities of
individuals because those individuals can lobby and vote
against legislators who support such measures. But if a
State’s tax unconstitutionally discriminates against inter­
state commerce, it is invalid regardless of whether the
plaintiff is a resident voter or nonresident of the State.
This Court has thus entertained and even sustained
dormant Commerce Clause challenges by individual resi­
dents of the State that imposed the alleged burden on
interstate commerce, Department of Revenue of Ky. v.
Davis, 553 U.S. 328, 336 (2008); Granholm v. Heald, 544
U.S. 460, 469 (2005), and we have also sustained such a
challenge to a tax whose burden was borne by in-state
consumers, Bacchus Imports, Ltd. v. Dias, 468 U.S. 263,
272 (1984).3
The principal dissent and JUSTICE SCALIA respond to
these holdings by relying on dictum in Goldberg v. Sweet,
488 U.S. 252, 266 (1989), that it is not the purpose of the
dormant Commerce Clause “ ‘to protect state residents
from their own state taxes.’ ” Post, at 3 (GINSBURG, J.,
dissenting); post, at 5 (SCALIA, J., dissenting). But we
repudiated that dictum in West Lynn Creamery, Inc. v.
Healy, 512 U.S. 186 (1994), where we stated that “[s]tate
taxes are ordinarily paid by in-state businesses and con­
sumers, yet if they discriminate against out-of-state prod­
ucts, they are unconstitutional.” Id., at 203. And, of
course, the dictum must bow to the holdings of our many
cases entertaining Commerce Clause challenges brought
——————
3 Similarly, we have sustained dormant Commerce Clause challenges
by corporate residents of the State that imposed the burden on inter­
state commerce. See, e.g., Camps Newfound/Owatonna, Inc. v. Town of
Harrison, 520 U.S. 564, 567 (1997); Fulton Corp. v. Faulkner, 516 U.S.
325, 328 (1996); Central Greyhound Lines, Inc. v. Mealey, 334 U.S. 653,
654 (1948); Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 435
(1939); J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 308 (1938).
12 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
by residents. We find the dissents’ reliance on Goldberg’s
dictum particularly inappropriate since they do not find
themselves similarly bound by the rule of that case, which
applied the internal consistency test to determine whether
the tax at issue violated the dormant Commerce Clause.
488 U.S., at 261.
In addition, the notion that the victims of such discrimi­
nation have a complete remedy at the polls is fanciful. It
is likely that only a distinct minority of a State’s residents
earns income out of State. Schemes that discriminate
against income earned in other States may be attractive
to legislators and a majority of their constituents for pre­
cisely this reason. It is even more farfetched to suggest that
natural persons with out-of-state income are better able to
influence state lawmakers than large corporations head­
quartered in the State. In short, petitioner’s argument
would leave no security where the majority of voters prefer
protectionism at the expense of the few who earn income
interstate.
It would be particularly incongruous in the present case
to disregard our prior decisions regarding the taxation of
corporate income because the income at issue here is a
type of corporate income, namely, the income of a Sub-
chapter S corporation. Only small businesses may incor­
porate under Subchapter S, and thus acceptance of peti­
tioner’s submission would provide greater protection for
income earned by large Subchapter C corporations than
small businesses incorporated under Subchapter S.
D
In attempting to justify Maryland’s unusual tax scheme,
the principal dissent argues that the Commerce Clause
imposes no limit on Maryland’s ability to tax the income of
its residents, no matter where that income is earned. It
argues that Maryland has the sovereign power to tax all of
the income of its residents, wherever earned, and it there­
Cite as: 575 U. S. ____ (2015) 13
Opinion of the Court
fore reasons that the dormant Commerce Clause cannot
constrain Maryland’s ability to expose its residents (and
nonresidents) to the threat of double taxation.
This argument confuses what a State may do without
violating the Due Process Clause of the Fourteenth
Amendment with what it may do without violating the
Commerce Clause. The Due Process Clause allows a State
to tax “all the income of its residents, even income earned
outside the taxing jurisdiction.” Oklahoma Tax Comm’n v.
Chickasaw Nation, 515 U.S. 450, 462–463 (1995). But
“while a State may, consistent with the Due Process
Clause, have the authority to tax a particular taxpayer,
imposition of the tax may nonetheless violate the Com­
merce Clause.” Quill Corp. v. North Dakota, 504 U.S.
298, 305 (1992) (rejecting a due process challenge to a tax
before sustaining a Commerce Clause challenge to that
tax).
Our decision in Camps Newfound illustrates the point.
There, we held that the Commerce Clause prohibited
Maine from granting more favorable tax treatment to
charities that operated principally for the benefit of Maine
residents. 520 U.S., at 580–583. Because the plaintiff
charity in that case was a Maine nonprofit corporation,
there is no question that Maine had the raw jurisdictional
power to tax the charity. See Chickasaw Nation, supra, at
462–463. Nonetheless, the tax failed scrutiny under the
Commerce Clause. Camps Newfound, supra, at 580–581.
Similarly, Maryland’s raw power to tax its residents’ out­
of-state income does not insulate its tax scheme from
scrutiny under the dormant Commerce Clause.
Although the principal dissent claims the mantle of
precedent, it is unable to identify a single case that en­
dorses its essential premise, namely, that the Commerce
Clause places no constraint on a State’s power to tax the
income of its residents wherever earned. This is unsur­
prising. As cases like Quill Corp. and Camps Newfound
14 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
recognize, the fact that a State has the jurisdictional
power to impose a tax says nothing about whether that tax
violates the Commerce Clause. See also, e.g., Barclays
Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298
(1994) (separately addressing due process and Commerce
Clause challenges to a tax); Moorman, 437 U.S. 267
(same); Standard Pressed Steel Co. v. Department of Reve-
nue of Wash., 419 U.S. 560 (1975) (same); Lawrence v.
State Tax Comm’n of Miss., 286 U.S. 276 (1932) (separately
addressing due process and equal protection challenges
to a tax); Travis v. Yale & Towne Mfg. Co., 252 U.S. 60
(1920) (separately addressing due process and privileges­
and-immunities challenges to a tax).
One good reason why we have never accepted the prin­
cipal dissent’s logic is that it would lead to plainly untena­
ble results. Imagine that Maryland taxed the income that
its residents earned in other States but exempted income
earned out of State from any business that primarily
served Maryland residents. Such a tax would violate the
dormant Commerce Clause, see Camps Newfound, supra,
and it cannot be saved by the principal dissent’s admoni­
tion that Maryland has the power to tax all the income of
its residents. There is no principled difference between
that hypothetical Commerce Clause challenge and this
one.
The principal dissent, if accepted, would work a sea
change in our Commerce Clause jurisprudence. Legion
are the cases in which we have considered and even up­
held dormant Commerce Clause challenges brought by
residents to taxes that the State had the jurisdictional
power to impose. See, e.g., Davis, 553 U.S. 328; Camps
Newfound, 520 U.S. 564; Fulton Corp., 516 U.S. 325;
Bacchus Imports, 468 U.S. 263; Central Greyhound, 334
U.S. 653; Gwin, White, 305 U.S. 434; J. D. Adams, 304
U.S. 307. If the principal dissent were to prevail, all of
these cases would be thrown into doubt. After all, in those
Cite as: 575 U. S. ____ (2015) 15
Opinion of the Court
cases, as here, the State’s decision to tax in a way that
allegedly discriminates against interstate commerce could
be justified by the argument that a State may tax its
residents without any Commerce Clause constraints.
E
While the principal dissent claims that we are departing
from principles that have been accepted for “a century”
and have been “repeatedly acknowledged by this Court,”
see post, at 1, 2, 19, when it comes to providing supporting
authority for this assertion, it cites exactly two Commerce
Clause decisions that are supposedly inconsistent with our
decision today. One is a summary affirmance, West Pub-
lishing Co. v. McColgan, 328 U.S. 823 (1946), and neither
actually supports the principal dissent’s argument.
In the first of these cases, Shaffer v. Carter, 252 U.S.
37, a resident of Illinois who earned income from oil in
Oklahoma unsuccessfully argued that his Oklahoma
income tax assessment violated several provisions of the
Federal Constitution. His main argument was based on
due process, but he also raised a dormant Commerce
Clause challenge. Although the principal dissent relies on
Shaffer for the proposition that a State may tax the in­
come of its residents wherever earned, Shaffer did not
reject the Commerce Clause challenge on that basis.
The dormant Commerce Clause challenge in Shaffer
was nothing like the Wynnes’ challenge here. The tax-
payer in Shaffer argued that “[i]f the tax is considered an
excise tax on business, rather than an income tax proper,”
it unconstitutionally burdened interstate commerce. Brief
for Appellant, O. T. 1919, No. 531, p. 166. The taxpayer
did not argue that this burden occurred because he was
subject to double taxation; instead, he argued that the tax
was an impermissible direct “tax on interstate business.”
Ibid. That argument was based on the notion that States
may not impose a tax “directly” on interstate commerce.
16 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
See supra, at 8–9. After assuming that the taxpayer’s
business was engaged in interstate commerce, we held
that “it is sufficient to say that the tax is imposed not upon
the gross receipts, but only upon the net proceeds, and is
plainly sustainable, even if it includes net gains from
interstate commerce. [United States Glue Co. v. Town of
Oak Creek], 247 U.S. 321.” Shaffer, supra, at 57 (citation
omitted).
Shaffer thus did not adjudicate anything like the double
taxation argument that was accepted in later cases and is
before us today. And the principal dissent’s suggestion
that Shaffer allows States to levy discriminatory net
income taxes is refuted by a case decided that same day.
In Travis, a Connecticut corporation challenged New
York’s net income tax, which allowed residents, but not
nonresidents, certain tax exemptions. The Court first
rejected the taxpayer’s due process argument as “settled
by our decision in Shaffer.” 252 U.S., at 75. But that due
process inquiry was not the end of the matter: the Court
then separately considered—and sustained—the argu­
ment that the net income tax’s disparate treatment of
residents and nonresidents violated the Privileges and
Immunities Clause. Id., at 79–80.
The second case on which the principal dissent relies,
West Publishing, is a summary affirmance and thus has
“considerably less precedential value than an opinion on
the merits.” Illinois Bd. of Elections v. Socialist Workers
Party, 440 U.S. 173, 180–181 (1979). A summary affir­
mance “ ‘is not to be read as a renunciation by this Court of
doctrines previously announced in our opinions after full
argument.’ ” Mandel v. Bradley, 432 U.S. 173, 176 (1977)
(per curiam) (quoting Fusari v. Steinberg, 419 U.S. 379,
392 (1975) (Burger, C. J., concurring)). The principal
dissent’s reliance on the state-court decision below in that
case is particularly inappropriate because “a summary
affirmance is an affirmance of the judgment only,” and
Cite as: 575 U. S. ____ (2015) 17
Opinion of the Court
“the rationale of the affirmance may not be gleaned solely
from the opinion below.” 432 U.S., at 176.
Moreover, we do not disagree with the result of West
Publishing. The tax in that case was levied only on “ ‘the
net income of every corporation derived from sources
within this State,’ ” and thus was an internally consistent
and nondiscriminatory tax scheme. See West Publishing
Co. v. McColgan, 27 Cal. 2d 705, 707, n., 166 P.2d 861,
862, n. (1946) (emphasis added). Moreover, even if we did
disagree with the result, the citation in our summary
affirmance to United States Glue Co. suggests that our
decision was based on the since-discarded distinction
between net income and gross receipts taxes. West Pub-
lishing did not—indeed, it could not—repudiate the double
taxation cases upon which we rely.
The principal dissent also finds it significant that, when
States first enacted modern income taxes in the early
1900’s, some States had tax schemes similar to Mary­
land’s. This practice, however, was by no means univer­
sal. A great many States—such as Alabama, Colorado,
Georgia, Kentucky, and Maryland—had early income tax
schemes that allowed their residents a credit against taxes
paid to other States. See Ala. Code, Tit. 51, ch. 17, §390
(1940); Colo. Stat. Ann., ch. 84A, §38 (Cum. Supp. 1951);
Ga. Code Ann. §92–3111 (1974); Carroll’s Ky. Stat. Ann.,
ch. 108, Art. XX, §4281b–15 (Baldwin rev. 1936); Md. Ann.
Code, Art. 81, ch. 277, §231 (1939). Other States also
adopted internally consistent tax schemes. For example,
Massachusetts and Utah taxed only the income of resi­
dents, not nonresidents. See Mass. Gen. Laws, ch. 62
(1932); Utah Rev. Stat. §80–14–1 et seq. (1933).
In any event, it is hardly surprising that these early
state ventures into the taxation of income included some
protectionist regimes that favored the local economy over
interstate commerce. What is much more significant is
that over the next century, as our Commerce Clause juris­
18 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
prudence developed, the States have almost entirely
abandoned that approach, perhaps in recognition of their
doubtful constitutionality. Today, the near-universal state
practice is to provide credits against personal income taxes
for such taxes paid to other States. See 2 J. Hellerstein &
W. Hellerstein, State Taxation, ¶20.10, pp. 20–163 to 20–
164 (3d ed. 2003).4
F
1
As previously noted, the tax schemes held to be uncon­
stitutional in J. D. Adams, Gwin, White, and Central
Greyhound, had the potential to result in the discrimina­
tory double taxation of income earned out of state and
created a powerful incentive to engage in intrastate rather
than interstate economic activity. Although we did not
use the term in those cases, we held that those schemes
could be cured by taxes that satisfy what we have subse­
quently labeled the “internal consistency” test. See Jeffer-
son Lines, 514 U.S., at 185 (citing Gwin, White as a case
requiring internal consistency); see also 1 Trost §2:19, at
122–123, and n. 160 (explaining that the internal con­
sistency test has its origins in Western Live Stock, J. D.
Adams, and Gwin, White). This test, which helps courts
identify tax schemes that discriminate against interstate
commerce, “looks to the structure of the tax at issue to see
whether its identical application by every State in the
Union would place interstate commerce at a disadvantage
——————
4 There is no merit to petitioner’s argument that Maryland is free to
adopt any tax scheme that is not actually intended to discriminate
against interstate commerce. Reply Brief 7. The Commerce Clause
regulates effects, not motives, and it does not require courts to inquire
into voters’ or legislators’ reasons for enacting a law that has a discrim­
inatory effect. See, e.g., Associated Industries of Mo. v. Lohman, 511
U.S. 641, 653 (1994); Philadelphia v. New Jersey, 437 U.S. 617, 626–
627 (1978); Hunt v. Washington State Apple Advertising Comm’n, 432
U.S. 333, 352–353 (1977).
Cite as: 575 U. S. ____ (2015) 19
Opinion of the Court
as compared with commerce intrastate.” 514 U.S., at 185.
See also, e.g., Tyler Pipe, 483 U.S., at 246–248; Armco,
467 U.S., at 644–645; Container Corp. of America v. Fran-
chise Tax Bd., 463 U.S. 159, 169 (1983).
By hypothetically assuming that every State has the
same tax structure, the internal consistency test allows
courts to isolate the effect of a defendant State’s tax
scheme. This is a virtue of the test because it allows
courts to distinguish between (1) tax schemes that inher­
ently discriminate against interstate commerce without
regard to the tax policies of other States, and (2) tax
schemes that create disparate incentives to engage in
interstate commerce (and sometimes result in double
taxation) only as a result of the interaction of two different
but nondiscriminatory and internally consistent schemes.
See Armco, supra, at 645–646; Moorman, 437 U.S., at
277, n. 12; Brief for Tax Economists as Amici Curiae 23–
24 (hereinafter Brief for Tax Economists); Brief for Mi­
chael S. Knoll & Ruth Mason as Amici Curiae 18–23 (here­
inafter Brief for Knoll & Mason). The first category of
taxes is typically unconstitutional; the second is not.5 See
Armco, supra, at 644–646; Moorman, supra, at 277, and
n. 12. Tax schemes that fail the internal consistency test
will fall into the first category, not the second: “[A]ny
cross-border tax disadvantage that remains after applica­
tion of the [test] cannot be due to tax disparities”6 but is
instead attributable to the taxing State’s discriminatory
policies alone.
——————
5 Our cases have held that tax schemes may be invalid under the
dormant Commerce Clause even absent a showing of actual double
taxation. Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U.S.
425, 444 (1980); Gwin, White, 305 U.S., at 439. We note, however, that
petitioner does not dispute that respondents have been subject to actual
multiple taxation in this case.
6 Mason, Made in America for European Tax: The Internal Consistency
Test, 49 Boston College L. Rev. 1277, 1310 (2008).
20 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
Neither petitioner nor the principal dissent questions
the economic bona fides of the internal consistency test.
And despite its professed adherence to precedent, the
principal dissent ignores the numerous cases in which we
have applied the internal consistency test in the past. The
internal consistency test was formally introduced more
than three decades ago, see Container Corp., supra, and it
has been invoked in no fewer than seven cases, invalidat­
ing the tax in three of those cases. See American Trucking
Assns., Inc. v. Michigan Pub. Serv. Comm’n, 545 U.S. 429
(2005);7 Jefferson Lines, Inc., 514 U.S. 175; Goldberg, 488
——————
7 The principal dissent and JUSTICE SCALIA inaccurately state that
the Court in American Trucking “conceded that a trucking tax ‘fail[ed]
the “internal consistency” test,’ but upheld the tax anyway.” Post, at 5
(SCALIA, J., dissenting); see also post, at 14–15 (GINSBURG, J., dissent­
ing). The Court did not say that the tax in question “failed the ‘internal
consistency test.’ ” The Court wrote that this is what petitioner argued.
See American Trucking, 545 U.S., at 437. And the Court did not
concede that this was true. The tax in that case was a flat tax on any
truck that made point-to-point deliveries in Michigan. The tax there­
fore fell on all trucks that made solely intrastate deliveries and some
that made interstate deliveries, namely, those that also made some
intrastate deliveries. What the Court “concede[d]” was that “if all
States [adopted a similar tax], an interstate truck would have to pay
fees totaling several hundred dollars, or even several thousand dollars,
were it to ‘top off’ its business by carrying local loads in many (or even
all) other States.” Id., at 438 (emphasis added). But that was not the
same as a concession that the tax violated the internal consistency test.
The internal consistency test asks whether the adoption of a rule by
all States “would place interstate commerce at a disadvantage as
compared with commerce intrastate.” Oklahoma Tax Comm’n v.
Jefferson Lines, Inc., 514 U.S. 175, 185 (1995). Whether the Michigan
trucking tax had such an effect depended on an empirical showing that
petitioners failed to make, namely, that the challenged tax imposed a
heavier burden on interstate truckers in general than it did on intra­
state truckers. Under the Michigan tax, some interstate truckers, i.e.,
those who used Michigan roads solely for trips that started and ended
outside the State, did not pay this tax even though they benefited from
the use of the State’s roads; they were thus treated more favorably than
truckers who did not leave the State. Other truckers who made inter­
Cite as: 575 U. S. ____ (2015) 21
Opinion of the Court
U. S. 252; American Trucking Assns., Inc. v. Scheiner, 483
U.S. 266 (1987); Tyler Pipe, 483 U.S. 232; Armco, 467
U.S. 638; Container Corp., supra.
2
Maryland’s income tax scheme fails the internal con­
sistency test.8 A simple example illustrates the point.
Assume that every State imposed the following taxes,
which are similar to Maryland’s “county” and “special
nonresident” taxes: (1) a 1.25% tax on income that resi­
dents earn in State, (2) a 1.25% tax on income that resi­
dents earn in other jurisdictions, and (3) a 1.25% tax on
income that nonresidents earn in State. Assume further
that two taxpayers, April and Bob, both live in State A,
but that April earns her income in State A whereas Bob
earns his income in State B. In this circumstance, Bob
——————
state trips, i.e., those who made some intrastate trips, were treated less
favorably. As the United States explained in its brief, “[n]either record
evidence nor abstract logic makes clear whether the overall effect of
such a system would be to increase or to reduce existing financial
disincentives to interstate travel.” Brief for United States in American
Trucking Assns., Inc. v. Michigan Pub. Serv. Comm’n, O. T. 2004, No.
03–1230, p. 26.
8 In order to apply the internal consistency test in this case, we must
evaluate the Maryland income tax scheme as a whole. That scheme
taxes three separate categories of income: (1) the “county tax” on
income that Maryland residents earn in Maryland; (2) the “county tax”
on income that Maryland residents earn in other States; and (3) the
“special nonresident tax” on income that nonresidents earn in Mary­
land. For Commerce Clause purposes, it is immaterial that Maryland
assigns different labels (i.e., “county tax” and “special nonresident tax”)
to these taxes. In applying the dormant Commerce Clause, they must
be considered as one. Cf. Oregon Waste Systems, Inc. v. Department of
Environmental Quality of Ore., 511 U.S. 93, 102–103 (1994) (independ­
ent taxes on intrastate and interstate commerce are “compensatory” if
they are rough equivalents imposed upon substantially similar events).
If state labels controlled, a State would always be free to tax domestic,
inbound, and outbound income at discriminatory rates simply by
attaching different labels.
22 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
will pay more income tax than April solely because he
earns income interstate. Specifically, April will have to
pay a 1.25% tax only once, to State A. But Bob will have
to pay a 1.25% tax twice: once to State A, where he re­
sides, and once to State B, where he earns the income.
Critically—and this dispels a central argument made by
petitioner and the principal dissent—the Maryland
scheme’s discriminatory treatment of interstate commerce
is not simply the result of its interaction with the taxing
schemes of other States. Instead, the internal consistency
test reveals what the undisputed economic analysis shows:
Maryland’s tax scheme is inherently discriminatory and
operates as a tariff. See Brief for Tax Economists 4, 9;
Brief for Knoll & Mason 2. This identity between Mary­
land’s tax and a tariff is fatal because tariffs are “[t]he
paradigmatic example of a law discriminating against
interstate commerce.” West Lynn, 512 U.S., at 193.
Indeed, when asked about the foregoing analysis made by
amici Tax Economists and Knoll & Mason, counsel for
Maryland responded, “I don’t dispute the mathematics.
They lose me when they switch from tariffs to income
taxes.” Tr. of Oral Arg. 9. But Maryland has offered no
reason why our analysis should change because we deal
with an income tax rather than a formal tariff, and we see
none. After all, “tariffs against the products of other
States are so patently unconstitutional that our cases
reveal not a single attempt by any State to enact one.
Instead, the cases are filled with state laws that aspire to
reap some of the benefits of tariffs by other means.” West
Lynn, supra, at 193.
None of our dissenting colleagues dispute this economic
analysis. The principal dissent focuses instead on a sup­
posed “oddity” with our analysis: The principal dissent can
envision other tax schemes that result in double taxation
but do not violate the internal consistency test. This
would happen, the principal dissent points out, if State A
Cite as: 575 U. S. ____ (2015) 23
Opinion of the Court
taxed only based on residence and State B taxed only
based on source. Post, at 17 (GINSBURG, J., dissenting);
see also post, at 7 (SCALIA, J., dissenting). Our prior
decisions have already considered and rejected this precise
argument—and for good reason. For example, in Armco,
we struck down an internally inconsistent tax that posed a
risk of double taxation even though we recognized that
there might be other permissible arrangements that would
result in double taxation. Such schemes would be consti­
tutional, we explained, because “such a result would not
arise from impermissible discrimination against interstate
commerce.” 467 U.S., at 645. The principal dissent’s
protest that our distinction is “entirely circular,” post, at
17–18, n. 10, misunderstands the critical distinction,
recognized in cases like Armco, between discriminatory
tax schemes and double taxation that results only from
the interaction of two different but nondiscriminatory tax
schemes. See also Moorman, 437 U.S., at 277, n. 12
(distinguishing “the potential consequences of the use of
different formulas by the two States,” which is not prohib­
ited by the Commerce Clause, from discrimination that
“inhere[s] in either State’s formula,” which is prohibited).
Petitioner and the Solicitor General argue that Mary­
land’s tax is neutral, not discriminatory, because the same
tax applies to all three categories of income. Specifically,
they point out that the same tax is levied on (1) residents
who earn income in State, (2) residents who earn income
out of State, and (3) nonresidents who earn income in
State. But the fact that the tax might have “ ‘the ad­
vantage of appearing nondiscriminatory’ does not save it
from invalidation.” Tyler Pipe, 483 U.S., at 248 (quoting
General Motors Corp. v. Washington, 377 U.S. 436, 460
(1964) (Goldberg, J., dissenting)). See also American
Trucking Assns., Inc. v. Scheiner, 483 U. S. at, 281
(dormant Commerce Clause applies to state taxes even
when they “do not allocate tax burdens between insiders
24 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
and outsiders in a manner that is facially discriminatory”);
Maine v. Taylor, 477 U.S. 131, 138 (1986) (a state law
may discriminate against interstate commerce “ ‘either on
its face or in practical effect’ ” (quoting Hughes, 441 U.S.,
at 336)). In this case, the internal consistency test and
economic analysis—indeed, petitioner’s own concession—
confirm that the tax scheme operates as a tariff and dis­
criminates against interstate commerce, and so the
scheme is invalid.
Petitioner and the principal dissent, post, at 6, also note
that by offering residents who earn income in interstate
commerce a credit against the “state” portion of the in­
come tax, Maryland actually receives less tax revenue
from residents who earn income from interstate commerce
rather than intrastate commerce. This argument is a red
herring. The critical point is that the total tax burden on
interstate commerce is higher, not that Maryland may
receive more or less tax revenue from a particular tax­
payer. See Armco, supra, at 642–645. Maryland’s tax un-
constitutionally discriminates against interstate commerce,
and it is thus invalid regardless of how much a particular
taxpayer must pay to the taxing State.
Once again, a simple hypothetical illustrates the point.
Assume that State A imposes a 5% tax on the income that
its residents earn in-state but a 10% tax on income they
earn in other jurisdictions. Assume also that State A
happens to grant a credit against income taxes paid to
other States. Such a scheme discriminates against inter­
state commerce because it taxes income earned interstate
at a higher rate than income earned intrastate. This is so
despite the fact that, in certain circumstances, a resident
of State A who earns income interstate may pay less tax to
State A than a neighbor who earns income intrastate. For
example, if Bob lives in State A but earns his income in
State B, which has a 6% income tax rate, Bob would pay a
total tax of 10% on his income, though 6% would go to
Cite as: 575 U. S. ____ (2015) 25
Opinion of the Court
State B and (because of the credit) only 4% would go to
State A. Bob would thus pay less to State A than his
neighbor, April, who lives in State A and earns all of her
income there, because April would pay a 5% tax to State
A. But Bob’s tax burden to State A is irrelevant; his total
tax burden is what matters.
The principal dissent is left with two arguments against
the internal consistency test. These arguments are incon­
sistent with each other and with our precedents.
First, the principal dissent claims that the analysis
outlined above requires a State taxing based on residence
to “recede” to a State taxing based on source. Post, at 1–2.
We establish no such rule of priority. To be sure, Mary­
land could remedy the infirmity in its tax scheme by offer­
ing, as most States do, a credit against income taxes paid
to other States. See Tyler Pipe, supra, at 245–246, and
n. 13. If it did, Maryland’s tax scheme would survive the
internal consistency test and would not be inherently
discriminatory. Tweak our first hypothetical, supra, at
21–22, and assume that all States impose a 1.25% tax on
all three categories of income but also allow a credit
against income taxes that residents pay to other jurisdic­
tions. In that circumstance, April (who lives and works in
State A) and Bob (who lives in State A but works in State
B) would pay the same tax. Specifically, April would pay a
1.25% tax only once (to State A), and Bob would pay a
1.25% tax only once (to State B, because State A would
give him a credit against the tax he paid to State B).
But while Maryland could cure the problem with its
current system by granting a credit for taxes paid to other
States, we do not foreclose the possibility that it could
comply with the Commerce Clause in some other way. See
Brief for Tax Economists 32; Brief for Knoll & Mason 28–
30. Of course, we do not decide the constitutionality of a
hypothetical tax scheme that Maryland might adopt be­
cause such a scheme is not before us. That Maryland’s
26 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
existing tax unconstitutionally discriminates against
interstate commerce is enough to decide this case.
Second, the principal dissent finds a “deep flaw” with
the possibility that “Maryland could eliminate the incon­
sistency [with its tax scheme] by terminating the special
nonresident tax—a measure that would not help the
Wynnes at all.” Post, at 16. This second objection refutes
the first. By positing that Maryland could remedy the
unconstitutionality of its tax scheme by eliminating the
special nonresident tax, the principal dissent accepts that
Maryland’s desire to tax based on residence need not
“recede” to another State’s desire to tax based on source.
Moreover, the principal dissent’s supposed flaw is simply
a truism about every case under the dormant Commerce
Clause (not to mention the Equal Protection Clause):
Whenever government impermissibly treats like cases
differently, it can cure the violation by either “leveling up”
or “leveling down.” Whenever a State impermissibly taxes
interstate commerce at a higher rate than intrastate
commerce, that infirmity could be cured by lowering the
higher rate, raising the lower rate, or a combination of the
two. For this reason, we have concluded that “a State
found to have imposed an impermissibly discriminatory
tax retains flexibility in responding to this determination.”
McKesson Corp. v. Division of Alcoholic Beverages and
Tobacco, Fla. Dept. of Business Regulation, 496 U.S. 18,
39–40 (1990). See also Associated Industries of Mo. v.
Lohman, 511 U.S. 641, 656 (1994); Fulton Corp., 516
U.S., at 346–347. If every claim that suffers from this
“flaw” cannot succeed, no dormant Commerce Clause or
equal protection claim could ever succeed.
G
JUSTICE SCALIA would uphold the constitutionality of
the Maryland tax scheme because the dormant Commerce
Clause, in his words, is “a judicial fraud.” Post, at 2. That
Cite as: 575 U. S. ____ (2015) 27
Opinion of the Court
was not the view of the Court in Gibbons v. Ogden, 9
Wheat, at 209, where Chief Justice Marshall wrote that
there was “great force” in the argument that the Com­
merce Clause by itself limits the power of the States to
enact laws regulating interstate commerce. Since that
time, this supposedly fraudulent doctrine has been applied
in dozens of our opinions, joined by dozens of Justices.
Perhaps for this reason, petitioner in this case, while
challenging the interpretation and application of that
doctrine by the court below, did not ask us to reconsider
the doctrine’s validity.
JUSTICE SCALIA does not dispute the fact that State
tariffs were among the principal problems that led to the
adoption of the Constitution. See post, at 3. Nor does he
dispute the fact that the Maryland tax scheme is tanta­
mount to a tariff on work done out of State. He argues,
however, that the Constitution addresses the problem of
state tariffs by prohibiting States from imposing “ ‘Imposts
or Duties on Imports or Exports.’ ” Ibid. (quoting Art. I,
§10, cl. 2). But he does not explain why, under his inter­
pretation of the Constitution, the Import-Export Clause
would not lead to the same result that we reach under the
dormant Commerce Clause. Our cases have noted the
close relationship between the two provisions. See, e.g.,
State Tonnage Tax Cases, 12 Wall. 204, 214 (1871).
JUSTICE THOMAS also refuses to accept the dormant
Commerce Clause doctrine, and he suggests that the
Constitution was ratified on the understanding that it
would not prevent a State from doing what Maryland has
done here. He notes that some States imposed income
taxes at the time of the adoption of the Constitution, and
he observes that “[t]here is no indication that those early
state income tax schemes provided credits for income
taxes paid elsewhere.” Post, at 2 (dissenting opinion). “It
seems highly implausible,” he writes, “that those who
ratified the Commerce Clause understood it to conflict
28 COMPTROLLER OF TREASURY OF MD. v. WYNNE
Opinion of the Court
with the income tax laws of their States and nonetheless
adopted it without a word of concern.” Ibid. This argu­
ment is plainly unsound.
First, because of the difficulty of interstate travel, the
number of individuals who earned income out of State in
1787 was surely very small. (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.)
Second, JUSTICE THOMAS has not shown that the small
number of individuals who earned income out of State
were taxed twice on that income. A number of Founding-
era income tax schemes appear to have taxed only the
income of residents, not nonresidents. For example, in his
report to Congress on direct taxes, Oliver Wolcott, Jr.,
Secretary of Treasury, describes Delaware’s income tax as
being imposed only on “the inhabitants of this State,” and
he makes no mention of the taxation of nonresidents’
income. Report to 4th Cong., 2d Sess. (1796), concerning
Direct Taxes, in 1 American State Papers, Finance 429
(1832). JUSTICE THOMAS likewise understands that the
Massachusetts and Delaware income taxes were imposed
only on residents. Post, at 2, n. These tax schemes, of
course, pass the internal consistency test. Moreover, the
difficulty of administering an income tax on nonresidents
would have diminished the likelihood of double taxation.
See R. Blakey, State Income Taxation 1 (1930).
Third, even if some persons were taxed twice, it is un­
likely that this was a matter of such common knowledge
that it must have been known by the delegates to the
State ratifying conventions who voted to adopt the
Constitution.
* * *
For these reasons, the judgment of the Court of Appeals
of Maryland is affirmed.
It is so ordered.
Cite as: 575 U. S. ____ (2015) 1
SCALIA, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–485
_________________
COMPTROLLER OF THE TREASURY OF MARYLAND,
PETITIONER v. BRIAN WYNNE ET UX.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
MARYLAND
[May 18, 2015]
JUSTICE SCALIA, with whom JUSTICE THOMAS joins as to
Parts I and II, dissenting.
The Court holds unconstitutional Maryland’s refusal to
give its residents full credits against income taxes paid to
other States. It does this by invoking the negative Com-
merce Clause, a judge-invented rule under which judges
may set aside state laws that they think impose too much
of a burden upon interstate commerce. I join the principal
dissent, which demonstrates the incompatibility of this
decision with our prior negative Commerce Clause cases.
Post, at 2–14 (opinion of GINSBURG, J.). Incompatibility,
however, is not the test for me—though what is incompat-
ible with our cases a fortiori fails my test as well, as dis-
cussed briefly in Part III below. The principal purpose of
my writing separately is to point out how wrong our nega-
tive Commerce Clause jurisprudence is in the first place,
and how well today’s decision illustrates its error.
I
The fundamental problem with our negative Commerce
Clause cases is that the Constitution does not contain a
negative Commerce Clause. It contains only a Commerce
Clause. Unlike the negative Commerce Clause adopted by
the judges, the real Commerce Clause adopted by the
People merely empowers Congress to “regulate Commerce
2 COMPTROLLER OF TREASURY OF MD. v. WYNNE
SCALIA, J., dissenting
with foreign Nations, and among the several States, and
with the Indian Tribes.” Art. I, §8, cl. 3. The Clause says
nothing about prohibiting state laws that burden com-
merce. Much less does it say anything about authorizing
judges to set aside state laws they believe burden com-
merce. The clearest sign that the negative Commerce
Clause is a judicial fraud is the utterly illogical holding
that congressional consent enables States to enact laws
that would otherwise constitute impermissible burdens
upon interstate commerce. See Prudential Ins. Co. v.
Benjamin, 328 U.S. 408, 421–427 (1946). How could
congressional consent lift a constitutional prohibition?
See License Cases, 5 How. 504, 580 (1847) (opinion of
Taney, C. J.).
The Court’s efforts to justify this judicial economic veto
come to naught. The Court claims that the doctrine “has
deep roots.” Ante, at 5. So it does, like many weeds. But
age alone does not make up for brazen invention. And the
doctrine in any event is not quite as old as the Court
makes it seem. The idea that the Commerce Clause of its
own force limits state power “finds no expression” in dis-
cussions surrounding the Constitution’s ratification. F.
Frankfurter, The Commerce Clause Under Marshall,
Taney and Waite 13 (1937). For years after the adoption
of the Constitution, States continually made regulations
that burdened interstate commerce (like pilotage laws and
quarantine laws) without provoking any doubts about
their constitutionality. License Cases, supra, at 580–581.
This Court’s earliest allusions to a negative Commerce
Clause came only in dicta—ambiguous dicta, at that—and
were vigorously contested at the time. See, e.g., id., at
581–582. Our first clear holding setting aside a state law
under the negative Commerce Clause came after the Civil
War, more than 80 years after the Constitution’s adoption.
Case of the State Freight Tax, 15 Wall. 232 (1873). Since
then, we have tended to revamp the doctrine every couple
Cite as: 575 U. S. ____ (2015) 3
SCALIA, J., dissenting
of decades upon finding existing decisions unworkable
or unsatisfactory. See Quill Corp. v. North Dakota, 504
U.S. 298, 309 (1992). The negative Commerce Clause
applied today has little in common with the negative
Commerce Clause of the 19th century, except perhaps for
incoherence.
The Court adds that “tariffs and other laws that bur-
dened interstate commerce” were among “the chief evils
that led to the adoption of the Constitution.” Ante, at 5.
This line of reasoning forgets that interpretation requires
heeding more than the Constitution’s purposes; it requires
heeding the means the Constitution uses to achieve those
purposes. The Constitution addresses the evils of local
impediments to commerce by prohibiting States from
imposing certain especially burdensome taxes—“Imposts
or Duties on Imports or Exports” and “Dut[ies] of Ton-
nage”—without congressional consent. Art. I, §10, cls.
2–3. It also addresses these evils by giving Congress a com-
merce power under which it may prohibit other burden-
some taxes and laws. As the Constitution’s text shows,
however, it does not address these evils by empowering
the judiciary to set aside state taxes and laws that it
deems too burdensome. By arrogating this power anyway,
our negative Commerce Clause cases have disrupted the
balance the Constitution strikes between the goal of pro-
tecting commerce and competing goals like preserving
local autonomy and promoting democratic responsibility.
II
The failings of negative Commerce Clause doctrine go
beyond its lack of a constitutional foundation, as today’s
decision well illustrates.
1. One glaring defect of the negative Commerce Clause
is its lack of governing principle. Neither the Constitution
nor our legal traditions offer guidance about how to sepa-
4 COMPTROLLER OF TREASURY OF MD. v. WYNNE
SCALIA, J., dissenting
rate improper state interference with commerce from
permissible state taxation or regulation of commerce. So
we must make the rules up as we go along. That is how
we ended up with the bestiary of ad hoc tests and ad hoc
exceptions that we apply nowadays, including the sub-
stantial nexus test, the fair apportionment test, and the
fair relation test, Complete Auto Transit, Inc. v. Brady,
430 U.S. 274, 279 (1977), the interest-on-state-bonds
exception, Department of Revenue of Ky. v. Davis, 553
U.S. 328, 353–356 (2008), and the sales-taxes-on-mail-
orders exception, Quill Corp., supra, at 314–319.
The internal consistency rule invoked by the Court
nicely showcases our ad hocery. Under this rule, a tax
violates the Constitution if its hypothetical adoption by all
States would interfere with interstate commerce. Ante, at
19. How did this exercise in counterfactuals find its way
into our basic charter? The test, it is true, bears some
resemblance to Kant’s first formulation of the categorical
imperative: “Act only according to that maxim whereby
you can at the same time will that it should become a
universal law” without contradiction. Grounding for the
Metaphysics of Morals 30 (J. Ellington transl. 3d ed.
1993). It bears no resemblance, however, to anything in
the text or structure of the Constitution. Nor can one
discern an obligation of internal consistency from our legal
traditions, which show that States have been imposing
internally inconsistent taxes for quite a while—until
recently with our approval. See, e.g., General Motors
Corp. v. Washington, 377 U.S. 436 (1964) (upholding
internally inconsistent business activities tax); Hinson v.
Lott, 8 Wall. 148 (1869) (upholding internally inconsistent
liquor tax). No, the only justification for the test seems to
be that this Court disapproves of “ ‘cross-border tax disad-
vantage[s]’ ” when created by internally inconsistent taxes,
but is willing to tolerate them when created by “the inter-
action of . . . internally consistent schemes.” Ante, at 19.
Cite as: 575 U. S. ____ (2015) 5
SCALIA, J., dissenting
“Whatever it is we are expounding in this area, it is not
a Constitution.” American Trucking Assns., Inc. v.
Smith, 496 U.S. 167, 203 (1990) (SCALIA, J., concurring in
judgment).
2. Another conspicuous feature of the negative Com-
merce Clause is its instability. Because no principle an-
chors our development of this doctrine—and because the
line between wise regulation and burdensome interference
changes from age to economic age—one can never tell
when the Court will make up a new rule or throw away an
old one. “Change is almost [the doctrine’s] natural state,
as it is the natural state of legislation in a constantly
changing national economy.” Ibid.
Today’s decision continues in this proud tradition.
Consider a few ways in which it contradicts earlier
decisions:
 In an earlier case, the Court conceded that a trucking
tax “fail[ed] the ‘internal consistency’ test,” but upheld
the tax anyway. American Trucking Assns., Inc. v.
Michigan Pub. Serv. Comm’n, 545 U.S. 429, 437
(2005). Now, the Court proclaims that an income tax
“fails the internal consistency test,” and for that rea-
son strikes it down. Ante, at 21.
 In an earlier case, the Court concluded that “[i]t is not
a purpose of the Commerce Clause to protect state
residents from their own state taxes” and that resi-
dents could “complain about and change the tax
through the [State’s] political process.” Goldberg v.
Sweet, 488 U.S. 252, 266 (1989). Now, the Court con-
cludes that the negative Commerce Clause operates
“regardless of whether the plaintiff is a resident . . . or
nonresident” and that “the notion that [residents]
have a complete remedy at the polls is fanciful.” Ante,
at 11, 12.
6 COMPTROLLER OF TREASURY OF MD. v. WYNNE
SCALIA, J., dissenting
 In an earlier case, the Court said that “[t]he difference
in effect between a tax measured by gross receipts
and one measured by net income . . . is manifest and
substantial.” United States Glue Co. v. Town of Oak
Creek, 247 U.S. 321, 328 (1918). Now, the Court says
that the “formal distinction” between taxes on net and
gross income “should [not] matter.” Ante, at 7.
 In an earlier case, the Court upheld a tax despite its
economic similarity to the gross-receipts tax struck
down in Central Greyhound Lines, Inc. v. Mealey, 334
U.S. 653 (1948). Oklahoma Tax Comm’n v. Jefferson
Lines, Inc., 514 U.S. 175, 190–191 (1995). The Court
explained that “economic equivalence alone has . . .
not been (and should not be) the touchstone of Com-
merce Clause jurisprudence.” Id., at 196–197, n. 7.
Now, the Court strikes down a tax in part because of
its economic similarity to the gross-receipts tax struck
down in Central Greyhound. Ante, at 7. The Court
explains that “we must consider ‘not the formal lan-
guage of the tax statute but rather its practical ef-
fect.’ ” Ante, at 7–8.
So much for internal consistency.
3. A final defect of our Synthetic Commerce Clause
cases is their incompatibility with the judicial role. The
doctrine does not call upon us to perform a conventional
judicial function, like interpreting a legal text, discerning
a legal tradition, or even applying a stable body of prece-
dents. It instead requires us to balance the needs of com-
merce against the needs of state governments. That is a
task for legislators, not judges.
Today’s enterprise of eliminating double taxation puts
this problem prominently on display. The one sure way to
eliminate all double taxation is to prescribe uniform na-
tional tax rules—for example, to allow taxation of income
Cite as: 575 U. S. ____ (2015) 7
SCALIA, J., dissenting
only where earned. But a program of prescribing a na-
tional tax code plainly exceeds the judicial competence. (It
may even exceed the legislative competence to come up
with a uniform code that accounts for the many political
and economic differences among the States.) As an alter-
native, we could consider whether a State’s taxes in prac-
tice overlap too much with the taxes of other States. But
any such approach would drive us “to the perplexing in-
quiry, so unfit for the judicial department, what degree of
taxation is the legitimate use, and what degree may
amount to an abuse of power.” McCulloch v. Maryland, 4
Wheat. 316, 430 (1819). The Court today chooses a third
approach, prohibiting States from imposing internally
inconsistent taxes. Ante, at 19. But that rule avoids
double taxation only in the hypothetical world where all
States adopt the same internally consistent tax, not in the
real world where different States might adopt different
internally consistent taxes. For example, if Maryland
imposes its income tax on people who live in Maryland
regardless of where they work (one internally consistent
scheme), while Virginia imposes its income tax on people
who work in Virginia regardless of where they live (an-
other internally consistent scheme), Marylanders who work
in Virginia still face double taxation. Post, at 17–18.
Then again, it is only fitting that the Imaginary Com-
merce Clause would lead to imaginary benefits.
III
For reasons of stare decisis, I will vote to set aside a tax
under the negative Commerce Clause if (but only if) it
discriminates on its face against interstate commerce or
cannot be distinguished from a tax this Court has already
held unconstitutional. American Trucking Assns., 545
U.S., at 439 (SCALIA, J., concurring in judgment). The
income tax before us does not discriminate on its face
against interstate commerce; a resident pays no less to
8 COMPTROLLER OF TREASURY OF MD. v. WYNNE
SCALIA, J., dissenting
Maryland when he works in Maryland than when he
works elsewhere. Neither is the tax before us indistin-
guishable from one that we have previously held unconsti-
tutional. To the contrary, as the principal dissent estab-
lishes, our prior cases validate this tax.
* * *
Maryland’s refusal to give residents full tax credits
against income taxes paid to other States has its disad-
vantages. It threatens double taxation and encourages
residents to work in Maryland. But Maryland’s law also
has its advantages. It allows the State to collect equal
revenue from taxpayers with equal incomes, avoids the
administrative burdens of verifying tax payments to other
States, and ensures that every resident pays the State at
least some income tax. Nothing in the Constitution pre-
cludes Maryland from deciding that the benefits of its tax
scheme are worth the costs.
I respectfully dissent.
Cite as: 575 U. S. ____ (2015) 1
THOMAS, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–485
_________________
COMPTROLLER OF THE TREASURY OF MARYLAND,
PETITIONER v. BRIAN WYNNE ET UX.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
MARYLAND
[May 18, 2015]
JUSTICE THOMAS, with whom JUSTICE SCALIA joins
except as to the first paragraph, dissenting.
“I continue to adhere to my view that the negative
Commerce Clause has no basis in the text of the Constitu-
tion, makes little sense, and has proved virtually unwork-
able in application, and, consequently, cannot serve as a
basis for striking down a state statute.” McBurney v.
Young, 569 U. S. ___, ___ (2013) (THOMAS, J., concurring)
(slip op., at 1) (internal quotation marks and alteration
omitted); accord, e.g., Camps Newfound/Owatonna, Inc. v.
Town of Harrison, 520 U.S. 564, 610–612 (1997)
(THOMAS, J., dissenting). For that reason, I would uphold
Maryland’s tax scheme.
In reaching the contrary conclusion, the Court proves
just how far our negative Commerce Clause jurisprudence
has departed from the actual Commerce Clause. Accord-
ing to the majority, a state income tax that fails to provide
residents with “a full credit against the income taxes that
they pay to other States” violates the Commerce Clause.
Ante, at 1. That news would have come as a surprise to
those who penned and ratified the Constitution. As this
Court observed some time ago, “Income taxes . . . were
imposed by several of the States at or shortly after the
adoption of the Federal Constitution.” Shaffer v. Carter,
2 COMPTROLLER OF TREASURY OF MD. v. WYNNE
THOMAS, J., dissenting
252 U.S. 37, 51 (1920).* There is no indication that those
early state income tax schemes provided credits for income
taxes paid elsewhere. Thus, under the majority’s reason-
ing, all of those state laws would have contravened the
newly ratified Commerce Clause.
It seems highly implausible that those who ratified the
Commerce Clause understood it to conflict with the in-
come tax laws of their States and nonetheless adopted it
without a word of concern. That silence is particularly
deafening given the importance of such taxes for raising
revenues at the time. See Kinsman, The Income Tax in
the Commonwealths of the United States 7, in 4 Publica-
tions of the American Economic Assn. (1903) (noting, for
example, that “Connecticut from her earliest history had
followed the plan of taxing incomes rather than property”
and that “[t]he total assessed value of [taxable] incomes in
Connecticut in the year 1795 was a little over $300,000”
(internal quotation marks omitted)).
In other areas of constitutional analysis, we would have
considered these laws to be powerful evidence of the origi-
nal understanding of the Constitution. We have, for ex-
——————
* See, e.g., 1777–1778 Mass. Acts ch. 13, §2, p. 756 (taxing “the
amount of [inhabitants’] income from any profession, faculty, handi-
craft, trade or employment; and also on the amount of all incomes and
profits gained by trading by sea and on shore”); 1781 Pa. Laws ch. 961,
§12, p. 390 (providing that “[a]ll offices and posts of profit, trades,
occupations and professions (that of ministers of the gospel of all
denominations and schoolmasters only excepted), shall be rated at the
discretion of the township, ward or district assessors . . . having due
regard of the profits arising from them”); see also Report of Oliver
Wolcott, Jr., Secretary of the Treasury, to 4th Cong., 2d Sess., concern-
ing Direct Taxes (1796), in 1 American State Papers, Finance 414, 423
(1832) (describing Connecticut’s income tax as assessing, as relevant,
“the estimated gains or profits arising from any, and all, lucrative
professions, trades, and occupations”); id., at 429 (noting that, in
Delaware, “[t]axes have been hitherto collected on the estimated annual
income of the inhabitants of this State, without reference to specific
objects”).
Cite as: 575 U. S. ____ (2015) 3
THOMAS, J., dissenting
ample, relied on the practices of the First Congress to
guide our interpretation of provisions defining congres-
sional power. See, e.g., Golan v. Holder, 565 U. S. ___, ___
(2012) (slip op., at 16) (Copyright Clause); McCulloch v.
Maryland, 4 Wheat. 316, 401–402 (1819) (Necessary and
Proper Clause). We have likewise treated “actions taken
by the First Congress a[s] presumptively consistent with
the Bill of Rights,” Town of Greece v. Galloway, 572 U. S.
___, ___ (2014) (ALITO, J., concurring) (slip op., at 12).
See, e.g., id., at ___ – ___ (majority opinion) (slip op., at 7–
8); Carroll v. United States, 267 U.S. 132, 150–152 (1925).
And we have looked to founding-era state laws to guide
our understanding of the Constitution’s meaning. See,
e.g., District of Columbia v. Heller, 554 U.S. 570, 600–602
(2008) (Second Amendment); Atwater v. Lago Vista, 532
U.S. 318, 337–340 (2001) (Fourth Amendment); Roth v.
United States, 354 U.S. 476, 482–483 (1957) (First
Amendment); Kilbourn v. Thompson, 103 U.S. 168, 202–
203 (1881) (Speech and Debate Clause); see also Calder v.
Bull, 3 Dall. 386, 396–397 (1798) (opinion of Paterson, J.)
(Ex Post Facto Clause).
Even if one assumed that the negative Commerce
Clause existed, I see no reason why it would be subject to
a different mode of constitutional interpretation. The
majority quibbles that I fail to “sho[w] that the small
number of individuals who earned income out of State
were taxed twice on that income,” ante, at 28, but given
the deference we owe to the duly enacted laws of a State—
particularly those concerning the paradigmatically sover-
eign activity of taxation—the burden of proof falls on those
who would wield the Federal Constitution to foreclose that
exercise of sovereign power.
I am doubtful that the majority’s application of one of
our many negative Commerce Clause tests is correct
under our precedents, see ante, at 5–7 (SCALIA, J., dissent-
ing); post, at 10–19 (GINSBURG, J., dissenting), but I am
4 COMPTROLLER OF TREASURY OF MD. v. WYNNE
THOMAS, J., dissenting
certain that the majority’s result is incorrect under our
Constitution. As was well said in another area of constitu-
tional law: “[I]f there is any inconsistency between [our]
tests and the historic practice . . . , the inconsistency calls
into question the validity of the test, not the historic prac-
tice.” Town of Greece, supra, at ___ (ALITO, J., concurring)
(slip op., at 12).
I respectfully dissent.
Cite as: 575 U. S. ____ (2015) 1
GINSBURG, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–485
_________________
COMPTROLLER OF THE TREASURY OF MARYLAND,
PETITIONER v. BRIAN WYNNE ET UX.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
MARYLAND
[May 18, 2015]
JUSTICE GINSBURG, with whom JUSTICE SCALIA and
JUSTICE KAGAN join, dissenting.
Today’s decision veers from a principle of interstate and
international taxation repeatedly acknowledged by this
Court: A nation or State “may tax all the income of its
residents, even income earned outside the taxing jurisdic-
tion.” Oklahoma Tax Comm’n v. Chickasaw Nation, 515
U.S. 450, 462–463 (1995). In accord with this principle,
the Court has regularly rejected claims that taxes on a
resident’s out-of-state income violate the Due Process
Clause for lack of a sufficient “connection” to the taxing
State. Quill Corp. v. North Dakota, 504 U.S. 298, 306
(1992) (internal quotation marks omitted); see, e.g., Law-
rence v. State Tax Comm’n of Miss., 286 U.S. 276, 281
(1932). But under dormant Commerce Clause jurispru-
dence, the Court decides, a State is not really empowered
to tax a resident’s income from whatever source derived.
In taxing personal income, the Court holds, source-based
authority, i.e., authority to tax commerce conducted within
a State’s territory, boxes in the taxing authority of a tax-
payer’s domicile.
As I see it, nothing in the Constitution or in prior deci-
sions of this Court dictates that one of two States, the
domiciliary State or the source State, must recede simply
because both have lawful tax regimes reaching the same
2 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
income. See Moorman Mfg. Co. v. Bair, 437 U.S. 267,
277, n. 12 (1978) (finding no “discriminat[ion] against
interstate commerce” where alleged taxation disparities
were “the consequence of the combined effect” of two other-
wise lawful income-tax schemes). True, Maryland elected
to deny a credit for income taxes paid to other States in
computing a resident’s county tax liability. It is equally
true, however, that the other States that taxed the
Wynnes’ income elected not to offer them a credit for their
Maryland county income taxes. In this situation, the
Constitution does not prefer one lawful basis for state
taxation of a person’s income over the other. Nor does
it require one State, in this case Maryland, to limit its
residence-based taxation, should the State also choose to
exercise, to the full extent, its source-based authority.
States often offer their residents credits for income taxes
paid to other States, as Maryland does for state income
tax purposes. States do so, however, as a matter of tax
“policy,” Chickasaw Nation, 515 U.S., at 463, n. 12 (inter-
nal quotation marks omitted), not because the Constitu-
tion compels that course.
I
For at least a century, “domicile” has been recognized as
a secure ground for taxation of residents’ worldwide in-
come. Lawrence, 286 U.S., at 279. “Enjoyment of the
privileges of residence within [a] state, and the attendant
right to invoke the protection of its laws,” this Court has
explained, “are inseparable from the responsibility for
sharing the costs of government.” Ibid. “A tax measured
by the net income of residents is an equitable method of
distributing the burdens of government among those who
are privileged to enjoy its benefits.” New York ex rel. Cohn
v. Graves, 300 U.S. 308, 313 (1937).
More is given to the residents of a State than to those
who reside elsewhere, therefore more may be demanded of
Cite as: 575 U. S. ____ (2015) 3
GINSBURG, J., dissenting
them. With this Court’s approbation, States have long
favored their residents over nonresidents in the provision
of local services. See Reeves, Inc. v. Stake, 447 U.S. 429,
442 (1980) (such favoritism does not violate the Commerce
Clause). See also Martinez v. Bynum, 461 U.S. 321 (1983)
(upholding residency requirements for free primary and
secondary schooling). The cost of services residents enjoy
is substantial. According to the State’s Comptroller, for
example, in 2012 Maryland and its local governments
spent over $11 billion to fund public schools, $4 billion for
state health programs, and $1.1 billion for the State’s food
supplemental program—all programs available to resi-
dents only. Brief for Petitioner 20–23. See also Brief for
United States as Amicus Curiae 18 (Howard County—
where the Wynnes lived in 2006—budgeted more than
$903 million for education in fiscal year 2014). Excluding
nonresidents from these services, this Court has observed,
is rational for it is residents “who fund the state treasury
and whom the State was created to serve.” Reeves, 447
U.S., at 442. A taxpayer’s home State, then, can hardly
be faulted for making support of local government activi-
ties an obligation of every resident, regardless of any
obligations residents may have to other States.1
Residents, moreover, possess political means, not shared
by outsiders, to ensure that the power to tax their income
is not abused. “It is not,” this Court has observed, “a
purpose of the Commerce Clause to protect state residents
from their own state taxes.” Goldberg v. Sweet, 488 U.S.
252, 266 (1989). The reason is evident. Residents are
——————
1 The Court offers no response to this reason for permitting a State to
tax its residents’ worldwide income, other than to urge that Commerce
Clause doctrine ought not favor corporations over individuals. See
ante, at 10–11. I scarcely disagree with that proposition (nor does this
opinion suggest otherwise). But I fail to see how it answers, or is even
relevant to, my observation that affording residents greater benefits
entitles a State to require that they bear a greater tax burden.
4 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
“insider[s] who presumably [are] able to complain about
and change the tax through the [State’s] political process.”
Ibid. Nonresidents, by contrast, are not similarly posi-
tioned to “effec[t] legislative change.” Ibid. As Chief
Justice Marshall, developer of the Court’s Commerce
Clause jurisprudence, reasoned: “In imposing a tax the
legislature acts upon its constituents. This is in general a
sufficient security against erroneous and oppressive taxa-
tion.” McCulloch v. Maryland, 4 Wheat. 316, 428 (1819).
The “people of a State” can thus “res[t] confidently on the
interest of the legislator, and on the influence of the con-
stituents over their representative, to guard them against
. . . abuse” of the “right of taxing themselves and their
property.” Ibid.2
I hardly maintain, as the majority insistently asserts I
do, that “the Commerce Clause places no constraint on a
State’s power to tax” its residents. Ante, at 13. See also
ante, at 11–15. This Court has not shied away from strik-
ing down or closely scrutinizing state efforts to tax resi-
dents at a higher rate for out-of-state activities than for in-
state activities (or to exempt from taxation only in-state
activities). See, e.g., Department of Revenue of Ky. v.
Davis, 553 U.S. 328, 336 (2008); Camps Newfound/
Owatonna, Inc. v. Town of Harrison, 520 U.S. 564
——————
2 The majority dismisses what we said in Goldberg v. Sweet, 488 U.S.
252 (1989), as “dictum” allegedly “repudiated” by the Court in West
Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 203 (1994). Ante, at 11–
12. That is doubly wrong. In Goldberg, we distinguished the tax struck
down in American Trucking Assns., Inc. v. Scheiner, 483 U.S. 266
(1987) (ATA I), noting, in particular, that the tax in ATA I fell on “out-
of-state[rs]” whereas the tax in Goldberg fell on “the insider who
presumably is able to complain about and change the tax through the
Illinois political process.” 488 U.S., at 266. Essential to our holding,
this rationale cannot be written off as “dictum.” As for West Lynn
Creamery, far from “repudiat[ing]” Goldberg, the Court cited Goldberg
and reaffirmed its political safeguards rationale, as explained below.
See infra this page and 5.
Cite as: 575 U. S. ____ (2015) 5
GINSBURG, J., dissenting
(1997); Fulton Corp. v. Faulkner, 516 U.S. 325 (1996);
Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 272 (1984).
See also ante, at 11, and n. 3, 14–15 (mistakenly charging
that under my analysis “all of these cases would be thrown
into doubt”). “[P]olitical processes” are ill equipped to
guard against such facially discriminatory taxes because
the effect of a tax of this sort is to “mollif[y]” some of the
“in-state interests [that] would otherwise lobby against” it.
West Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 200
(1994). By contrast, the Court has generally upheld “even-
handed tax[es] . . . in spite of any adverse effects on
interstate commerce, in part because ‘[t]he existence of
major in-state interests adversely affected . . . is a power-
ful safeguard against legislative abuse.’ ” Ibid. (citing,
inter alia, Goldberg, 488 U.S., at 266). That justification
applies with full force to the “evenhanded tax” challenged
here, which taxes residents’ income at the same rate
whether earned in-state or out-of-state.3
These rationales for a State taxing its residents’ world-
wide income are not diminished by another State’s inde-
pendent interest in “requiring contributions from [nonres-
idents] who realize current pecuniary benefits under the
protection of the [State’s] government.” Shaffer v. Carter,
252 U.S. 37, 51 (1920). A taxpayer living in one State and
working in another gains protection and benefits from
both—and so can be called upon to share in the costs of
——————
3 Given the pedigree of this rationale, applying it here would hardly
“work a sea change in our Commerce Clause jurisprudence.” Ante, at
14. See United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste
Management Authority, 550 U.S. 330, 345, n. 7 (2007); Goldberg, 488
U.S., at 266; Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456,
473, n. 17 (1981); Raymond Motor Transp., Inc. v. Rice, 434 U.S. 429,
444, n. 18 (1978); South Carolina Highway Dept. v. Barnwell Brothers,
Inc., 303 U.S. 177, 187 (1938). Nor would applying the rationale to a
net income tax cast “doubt” on the Court’s gross receipts precedents,
ante, at 14–15, given the Court’s longstanding practice of evaluating
income and gross receipt taxes differently, see infra, at 12–14.
6 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
both States’ governments.
States deciding whether to tax residents’ entire world-
wide income must choose between legitimate but compet-
ing tax policy objectives. A State might prioritize obtain-
ing equal contributions from those who benefit from the
State’s protection in roughly similar ways. Or a State
might prioritize ensuring that its taxpayers are not sub-
ject to double taxation. A State cannot, however, accom-
plish both objectives at once.
To illustrate, consider the Wynnes. Under the tax
scheme in place in 2006, other Howard County residents
who earned their income in-state but who otherwise had
the same tax profile as the Wynnes (e.g., $2.67 million in
taxable net income) owed the same amount of taxes to
Maryland as the Wynnes. See App. to Pet. for Cert. A–56.
The scheme thus ensured that all residents with similar
access to the State’s protection and benefits and similar
ability to pay made equal contributions to the State to
defray the costs of those benefits. Maryland could not
achieve that objective, however, without exposing the
Wynnes to a risk of double taxation. Conversely, the
Court prioritizes reducing the risk that the Wynnes’ in-
come will be taxed twice by two different States. But that
choice comes at a cost: The Wynnes enjoyed equal access
to the State’s services but will have paid $25,000 less to
cover the costs of those services than similarly situated
neighbors who earned their income entirely within the
State. See Pet. for Cert. 15.
States confront the same trade-off when deciding
whether to tax nonresidents’ entire in-state income. A
State can require all residents and nonresidents who work
within the State under its protection to contribute equally
to the cost of that protection. Or the State can seek to
avoid exposing its workers to any risk of double taxation.
But it cannot achieve both objectives.
For at least a century, responsibility for striking the
Cite as: 575 U. S. ____ (2015) 7
GINSBURG, J., dissenting
right balance between these two policy objectives has
belonged to the States (and Congress), not this Court.
Some States have chosen the same balance the Court
embraces today. See ante, at 17. But since almost the
dawn of the modern era of state income taxation, other
States have taken the same approach as Maryland does
now, taxing residents’ entire income, wherever earned,
while at the same time taxing nonresidents’ entire in-state
income. And recognizing that “[p]rotection, benefit, and
power over [a taxpayer’s income] are not confined to ei-
ther” the State of residence or the State in which income is
earned, this Court has long afforded States that flexibility.
Curry v. McCanless, 307 U.S. 357, 368 (1939). This history
of States imposing and this Court upholding income tax
schemes materially identical to the one the Court con-
fronts here should be the beginning and end of this case.
The modern era of state income taxation dates from a
Wisconsin tax enacted in 1911. See 1911 Wis. Laws ch.
658; R. Blakey, State Income Taxation 1 (1930). From
close to the start of this modern era, States have taxed
residents and nonresidents in ways materially indistin-
guishable from the way Maryland does now. In 1915, for
example, Oklahoma began taxing residents’ “entire net
income . . . arising or accruing from all sources,” while at
the same time taxing nonresidents’ “entire net income
from [sources] in th[e] State.” 1915 Okla. Sess. Laws
ch. 164, §1, pp. 232–233 (emphasis added). Like Maryland
today, Oklahoma provided no credit to either residents or
nonresidents for taxes paid elsewhere. See id., ch. 164, §1
et seq., at 232–237. In 1917, neighboring Missouri adopted
a similar scheme: Residents owed taxes on their “entire
net income . . . from all sources” and nonresidents owed
taxes on their “entire net income . . . from all sources
within th[e] state.” 1917 Mo. Laws §1(a), pp. 524–525
(emphasis added). Missouri too provided neither residents
nor nonresidents a credit for taxes paid to other jurisdic-
8 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
tions. See id., §1 et seq., at 524–538. Thus, much like
Maryland today, these early income tax adopters simulta-
neously taxed residents on all income, wherever earned,
and nonresidents on all income earned within the State.4
Almost immediately, this Court began issuing what
became a long series of decisions, repeatedly upholding
States’ authority to tax both residents’ worldwide income
and nonresidents’ in-state income. E.g., Maguire v. Trefry,
253 U.S. 12, 17 (1920) (resident income tax); Shaffer, 252
U.S., at 52–53, 57 (nonresident income tax). See also
State Tax Comm’n of Utah v. Aldrich, 316 U.S. 174, 178
(1942); Curry, 307 U.S., at 368; Guaranty Trust Co. v.
Virginia, 305 U.S. 19, 23 (1938); Graves, 300 U.S., at 313;
Lawrence, 286 U.S., at 281. By the end of the 20th cen-
tury, it was “a well-established principle of interstate and
international taxation” that “sovereigns have authority to
tax all income of their residents, including income earned
outside their borders,” Chickasaw Nation, 515 U.S., at
462, 463, n. 12, and that sovereigns generally may also tax
nonresidents on “income earned within the [sovereign’s]
jurisdiction,” id., at 463, n. 11.
Far from suggesting that States must choose between
taxing residents or nonresidents, this Court specifically
affirmed that the exact same “income may be taxed [si-
multaneously] both by the state where it is earned and by
the state of the recipient’s domicile.” Curry, 307 U. S., at
——————
4 Unlike Maryland’s county income tax, these early 20th-century
income taxes allowed a deduction for taxes paid to other jurisdictions.
Compare App. 18 with 1917 Mo. Laws §5, pp. 526–527, and 1915 Okla.
Sess. Laws §6, p. 234. The Wynnes have not argued and the majority
does not suggest, however, that Maryland could fully cure the asserted
defects in its tax “scheme” simply by providing a deduction, in lieu of a
tax credit. And I doubt that such a deduction would give the Wynnes
much satisfaction: Deducting taxes paid to other States from the
Wynnes’ $2.67 million taxable net income would reduce their Maryland
tax burden by a small fraction of the $25,000 tax credit the majority
awards them. See Pet. for Cert. 15; App. to Pet. for Cert. A–56.
Cite as: 575 U. S. ____ (2015) 9
GINSBURG, J., dissenting
368 (emphasis added). See also Aldrich, 316 U.S., at 176–
178, 181 (rejecting “a rule of immunity from taxation by
more than one state,” including with respect to income
taxation (internal quotation marks omitted)). In Law-
rence, for example, this Court dealt with a Mississippi tax
“scheme” with the same structure Maryland has today:
Mississippi taxed residents on all income, wherever
earned, and nonresidents on income earned within the
State, without providing either set of taxpayers a credit
for taxes paid elsewhere. See 286 U.S., at 278–279; Miss.
Code Ann. §5033(a), (b)(9) (1930). Lawrence upheld a
Mississippi tax on net income earned by one of its resi-
dents on the construction of public highways in Tennessee.
See 286 U.S., at 279–281. The Court did so fully aware
that both Mississippi and Tennessee were effectively
imposing “an income tax upon the same occupation.”
Reply Brief in Lawrence v. State Tax Comm’n of Miss.,
O. T. 1931, No. 580, p. 32. See also Curry, 307 U.S., at
363, n. 1, 368 (discussing Lawrence).
Likewise, in Guaranty Trust, both New York and Vir-
ginia had taxed income of a New York trust that had been
distributed to a Virginia resident. 305 U.S., at 21–22.
The resident sought to block Virginia’s tax in order to
avoid “double taxation” of the “identical income.” Id., at
22. Rejecting that challenge, the Court once again reiter-
ated that “two States” may simultaneously tax the “same
income.” Ibid.
The majority deems these cases irrelevant because they
involved challenges brought under the Due Process
Clause, not the Commerce Clause. See ante, at 12–15.
These cases are significant, however, not because the
constraints imposed by the two Clauses are identical.
Obviously, they are not. See Quill Corp., 504 U.S., at 305.
What the sheer volume and consistency of this precedent
confirms, rather, is the degree to which this Court has—
until now—endorsed the “well-established principle of
10 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
interstate and international taxation” that a State may
tax its residents’ worldwide income, without restriction
arising from the source-based taxes imposed by other
States and regardless of whether the State also chooses to
impose source-based taxes of its own. Chickasaw Nation,
515 U.S., at 462.5
In any event, it is incorrect that support for this princi-
ple is limited to the Court’s Due Process Clause cases. In
Shaffer, for example, this Court rejected both a Due Pro-
cess Clause challenge and a dormant Commerce Clause
challenge to an income tax “scheme” (the Oklahoma stat-
ute described above) with the very features the majority
latches onto today: Oklahoma taxed residents on all
worldwide income and nonresidents on all in-state income,
without providing a credit for taxes paid elsewhere to
either residents or nonresidents. 252 U.S., at 52–53 (Due
Process challenge); id., at 57 (dormant Commerce Clause
challenge). See also supra, at 7. The specific tax chal-
lenged in Shaffer—a tax on a nonresident’s in-state in-
come—exposed taxpayers to the same risk of double taxa-
tion as the Maryland tax challenged in this case. The
majority labors mightily to distinguish Shaffer, but it does
not dispute the one thing that ought to give it pause:
Today’s decision overrules Shaffer’s dormant Commerce
Clause holding. See ante, at 15–16. I would not discard
our precedents so lightly. Just as the tax in Shaffer en-
countered no constitutional shoals, so Maryland’s scheme
should survive the Court’s inspection.
——————
5 Upholding Maryland’s facially neutral tax hardly means, as the
majority contends, ante, at 12, that the dormant Commerce Clause
places no limits on States’ authority to tax residents’ worldwide income.
There are, for example, no well-established principles of interstate and
international taxation permitting the kind of facially discriminatory tax
the majority “[i]magine[s]” a State enacting. Ibid. Nor are the political
processes noted above an adequate safeguard against such a tax. See
supra, at 3–5.
Cite as: 575 U. S. ____ (2015) 11
GINSBURG, J., dissenting
This Court’s decision in West Publishing Co. v.
McColgan, 328 U.S. 823 (1946), reinforces that conclu-
sion. In West Publishing, the Court summarily affirmed a
decision of the California Supreme Court that denied a
dormant Commerce Clause challenge based on the princi-
ples today’s majority disrespects:
“[T]here [is no] merit to the contention that [Califor-
nia’s tax] discriminates against interstate commerce
on the ground that it subjects part of plaintiff ’s in-
come to double taxation, given the taxability of plain-
tiff ’s entire net income in the state of its domicile.
Taxation in one state is not an immunization against
taxation in other states. Taxation by states in which
a corporation carries on business activities is justified
by the advantages that attend the pursuit of such ac-
tivities. Income may be taxed both by the state where
it is earned and by the state of the recipient’s domi-
cile. Protection, benefit and power over the subject
matter are not confined to either state.” 27 Cal. 2d
705, 710–711, 166 P.2d 861, 864 (1946) (citations and
internal quotation marks omitted).
In treating the matter summarily, the Court rejected an
argument strikingly similar to the one the majority now
embraces: that California’s tax violated the dormant
Commerce Clause because it subjected “interstate com-
merce . . . to the risk of a double tax burden.” Brief for
Appellant Opposing Motion to Dismiss or Affirm in West
Publishing Co. v. McColgan, O. T. 1945, No. 1255, pp. 20–
21 (quoting J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307,
311 (1938)).
The long history just recounted counsels in favor of
respecting States’ authority to tax without discount its
residents’ worldwide income. As Justice Holmes stated
over a century ago, in regard to a “mode of taxation . . . of
long standing, . . . the fact that the system has been in
12 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
force for a very long time is of itself a strong reason . . . for
leaving any improvement that may be desired to the legis-
lature.” Paddell v. City of New York, 211 U.S. 446, 448
(1908). Only recently, this Court followed that sound
advice in resisting a dormant Commerce Clause challenge
to a taxing practice with a pedigree as enduring as the
practice in this case. See Department of Revenue of Ky. v.
Davis, 553 U.S. 328, 356–357 (2008) (quoting Padell, 211
U.S., at 448). Surely that advice merits application here,
where the challenged tax draws support from both histori-
cal practice and numerous decisions of this Court.
The majority rejects Justice Holmes’ counsel, observing
that most States, over time, have chosen not to exercise
plenary authority to tax residents’ worldwide income. See
ante, at 17–18. The Court, however, learns the wrong
lesson from the “independent policy decision[s]” States
have made. Chickasaw, 515 U.S., at 463, n. 12 (emphasis
added; internal quotation marks omitted). This history
demonstrates not that States “doub[t]” their “constitu-
tiona[l]” authority to tax residents’ income, wherever
earned, as the majority speculates, ante, at 18, but that
the very political processes the Court disregards as “fanci-
ful,” ante, at 12, have in fact worked to produce policies
the Court ranks as responsible—all the more reason to
resist this Court’s heavy-handed supervision.
The Court also attempts to deflect the force of this his-
tory and precedent by relying on a “trilogy” of decisions it
finds “particularly instructive.” Ante, at 6–7 (citing Cen-
tral Greyhound Lines, Inc. v. Mealey, 334 U.S. 653 (1948);
Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434
(1939); J. D. Adams Mfg., 304 U.S. 307). As the majority
acknowledges, however, those three decisions involved
gross receipts taxes, not income taxes. Ante, at 7–9. True,
this Court has recently pointed to similarities between
these two forms of taxation. See ante, at 9. But it is an
indulgence in wishful thinking to say that this Court has
Cite as: 575 U. S. ____ (2015) 13
GINSBURG, J., dissenting
previously “rejected the argument that the Commerce
Clause distinguishes between” these taxes. Ante, at 9.
For decades—including the years when the majority’s
“trilogy” was decided—the Court has routinely maintained
that “the difference between taxes on net income and taxes
on gross receipts from interstate commerce warrants
different results” under the Commerce Clause. C. Trost &
P. Hartman, Federal Limitations on State and Local Taxa-
tion 2d §10:1 (2003).
In Shaffer, for example, the Court rejected the taxpay-
er’s dormant Commerce Clause challenge because “the tax
[was] imposed not upon gross receipts . . . but only upon
the net proceeds.” 252 U.S., at 57. Just three years
before deciding J. D. Adams, the Court emphasized “mani-
fest and substantial” differences between the two types of
taxes, calling the burden imposed by a gross receipts tax
“direct and immediate,” in contrast to the “indirect and
incidental” burden imposed by an income tax. Stewart
Dry Goods Co. v. Lewis, 294 U.S. 550, 558 (1935) (quoting
United States Glue Co. v. Town of Oak Creek, 247 U.S.
321, 328 (1918)). And the Gwin, White opinion observed
that invalidating the gross receipts tax at issue “left to the
states wide scope for taxation of those engaged in inter-
state commerce, extending to . . . net income derived from
it.” 305 U.S., at 441 (emphasis added).
The majority asserts that this Court “rejected” this
distinction in Moorman Mfg. See ante, at 9. That decision
in fact described gross receipts taxes as “more burden-
some” than income taxes—twice. 437 U.S., at 280, 281.
In particular, Moorman upheld a state income tax because
an earlier decision had upheld a similar but “inherently
more burdensome” gross receipts tax. Id., at 281. To say
that the constitutionality of an income tax follows
a fortiori from the constitutionality of a similar but “more
burdensome” gross receipts tax is to affirm, not reject, a
distinction between the two.
14 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
The Justices participating in the Court’s “trilogy,” in
short, would scarcely expect to see the three decisions
invoked to invalidate a tax on net income.
II
Abandoning principles and precedent sustaining simul-
taneous residence- and source-based income taxation, the
Court offers two reasons for striking down Maryland’s
county income tax: (1) the tax creates a risk of double
taxation, ante, at 7, 18; and (2) the Court deems Mary-
land’s income tax “scheme” “inherently discriminatory”—
by which the Court means, the scheme fails the so-called
“internal consistency” test, ante, at 21–22. The first objec-
tion is overwhelmed by the history, recounted above, of
States imposing and this Court upholding income taxes
that carried a similar risk of double taxation. See supra,
at 6–12. The Court’s reliance on the internal consistency
test is no more compelling.
This Court has not rigidly required States to maintain
internally consistent tax regimes. Before today, for two
decades, the Court has not insisted that a tax under re-
view pass the internal consistency test, see Oklahoma Tax
Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185 (1995),
and has not struck down a state tax for failing the test in
nearly 30 years, see American Trucking Assns., Inc. v.
Scheiner, 483 U.S. 266, 284–287 (1987) (ATA I); Tyler
Pipe Industries, Inc. v. Washington State Dept. of Revenue,
483 U.S. 232, 247–248 (1987). Moreover, the Court has
rejected challenges to taxes that flunk the test. The Okla-
homa tax “scheme” upheld under the dormant Commerce
Clause in Shaffer, for example, is materially indistin-
guishable from—therefore as internally inconsistent as—
Maryland’s scheme. 252 U.S., at 57. And more recently,
in American Trucking Assns., Inc. v. Michigan Pub. Serv.
Comm’n, the Court upheld a “concede[dly]” internally
inconsistent state tax. 545 U.S. 429, 438 (2005) (ATA II).
Cite as: 575 U. S. ____ (2015) 15
GINSBURG, J., dissenting
The Court did so, satisfied that there was a sufficiently
close connection between the tax at issue and the local
conduct that triggered the tax. See ibid.6
The logic of ATA II, counsel for the Wynnes appeared to
recognize, see Tr. of Oral Arg. 46–47, would permit a State
to impose a head tax—i.e., a flat charge imposed on every
resident in the State—even if that tax were part of an
internally inconsistent tax scheme. Such a tax would rest
on purely local conduct: the taxpayer’s residence in the
taxing State. And the taxes paid would defray costs
closely connected to that local conduct—the services used
by the taxpayer while living in the State.
I see no reason why the Constitution requires us to
disarm States from using a progressive tax, rather than a
flat toll, to cover the costs of local services all residents
enjoy. A head tax and a residence-based income tax differ,
do they not, only in that the latter is measured by each
taxpayer’s ability to pay. Like the head tax, however, a
residence-based income tax is triggered by the purely local
conduct of residing in the State. And also like the head
tax, a residence-based income tax covers costs closely
——————
6 The majority reads American Trucking Assns., Inc. v. Michigan Pub.
Serv. Comm’n, 545 U.S. 429 (2005) (ATA II), in a way so implausible, it
must resort to quoting from an amicus brief, rather than from the
Court’s opinion. According to the majority, this Court did not think the
challenged tax failed the internal consistency test in ATA II, it held
only that the challengers had failed to make the necessary “empirical
showing.” See ante, at 20–21, n. 7. It is true that the United States
made that argument. See Brief for United States as Amicus Curiae in
ATA II, O. T. 2004, No. 03–1230, p. 26. But one searches the U. S.
Reports in vain for any indication that the Court adopted it. Which is
hardly surprising, for one would scarcely think that a test turning on
“hypothetically” assessing a tax’s “structure,” ante, at 19 (emphasis
added), would require empirical data. What the Court in fact said in
ATA II, is that the tax’s internal inconsistency would be excused be-
cause any multiple taxation resulting from every State adopting the
challenged tax would be caused by interstate firms’ choosing to “en-
gag[e] in local business in all those States.” 545 U.S., at 438.
16 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
connected to that residence: It finances services used by
those living in the State. If a head tax qualifies for ATA
II’s reprieve from internal consistency, then so too must a
residence-based income tax.
The majority asserts that because Maryland’s tax
scheme is internally inconsistent, it “operates as a tariff,”
making it “ ‘patently unconstitutional.’ ” Ante, at 22. This
is a curious claim. The defining characteristic of a tariff is
that it taxes interstate activity at a higher rate than it
taxes the same activity conducted within the State. See
West Lynn Creamery, 512 U.S., at 193. Maryland’s resi-
dent income tax does the exact opposite: It taxes the in-
come of its residents at precisely the same rate, whether
the income is earned in-state or out-of-state.7
There is, moreover, a deep flaw in the Court’s chosen
test. The Court characterizes internal consistency as a
“cure,” ante, at 18, 25–26, but the test is scarcely that, at
least for the double taxation the Court believes to justify
its intervention. According to the Court, Maryland’s tax
“scheme” is internally inconsistent because Maryland
simultaneously imposes two taxes: the county income tax
and the special nonresident tax. See ante, at 7, 21–22, and
n. 8. But only one of these taxes—the county income tax—
actually falls on the Wynnes. Because it is the interaction
between these two taxes that renders Maryland’s tax
scheme internally inconsistent, Maryland could eliminate
the inconsistency by terminating the special nonresident
tax—a measure that would not help the Wynnes at all.8
Maryland could, in other words, bring itself into compli-
ance with the test at the heart of the Court’s analysis
without removing the double tax burden the test is pur-
——————
7 The majority faults the dissents for not “disput[ing]” its “economic
analysis,” but beyond citation to a pair of amicus briefs, its opinion
offers no analysis to dispute. Ante, at 22.
8 Or Maryland could provide nonresidents a credit for taxes paid to
other jurisdictions on Maryland source income. Cf. ante, at 25–26.
Cite as: 575 U. S. ____ (2015) 17
GINSBURG, J., dissenting
portedly designed to “cure.”
To illustrate this oddity, consider the Court’s “simple
example” of April (who lives and works in State A) and
Bob (who lives in State A, but works in State B). Ante, at
21–22, 25. Both States fail the internal consistency test
because they impose (1) a 1.25% tax on income that resi-
dents earn in-state, (2) a 1.25% tax on income that resi-
dents earn in other jurisdictions, and (3) a 1.25% tax on
income that nonresidents earn in-state. According to the
Court, these tax schemes are troubling because “Bob will
pay more income tax than April solely because he earns
income interstate.” Ante, at 22.
Each State, however, need not pursue the same ap-
proach to make their tax schemes internally consistent.9
See ante, at 25–26. State A might choose to tax residents’
worldwide income only, which it could do by eliminating
tax #3 (on nonresidents’ in-state income). State B might
instead choose exclusively to tax income earned within the
State by deleting tax #2 (on residents’ out-of-state income).
Each State’s tax scheme would then be internally con-
sistent. But the tax burden on April and Bob would re-
main unchanged: Just as under the original schemes,
April would have to pay a 1.25% tax only once, to State A,
and Bob would have to pay a 1.25% tax twice: once to
State A, where he resides, and once to State B, where he
earns the income. The Court’s “cure,” in other words, is no
match for the perceived disease.10
——————
9 I do not “clai[m]” as the Court groundlessly suggests, that the
Court’s analysis “establish[es] . . . [a] rule of priority” between resi-
dence- and source-based taxation. Ante, at 25–26. My objection,
rather, is that the Court treats source-based authority as “box[ing] in” a
State’s discrete authority to tax on the basis of residence. Supra, at 1.
There is no “inconsisten[cy]” in my analysis, and the majority plainly
errs in insisting that there is. Ante, at 25.
10 Attempting to preserve the test’s qualification as a “cure,” the
Court redefines the illness as not just double taxation but double
taxation caused by an “inherently discriminat[ory]” tax “scheme.” Ante,
18 COMPTROLLER OF TREASURY OF MD. v. WYNNE
GINSBURG, J., dissenting
The Court asserts that this flaw is just a “truism” of
every discrimination case, whether brought under the
dormant Commerce Clause or the Equal Protection
Clause. Ante, at 26. That is simply incorrect. As the
Court acknowledges, a government that impermissibly
“treats like cases differently” (i.e., discriminates) can
ordinarily cure the violation either by “leveling up” or
“leveling down.” Ibid. (internal quotation marks omitted).
Consider another April and Bob example. If Bob must pay
a 10% tax and April must pay a 5% tax, that discrimina-
tion can be eliminated either by requiring both to pay the
10% tax (“leveling up”) or by requiring both to pay the 5%
tax (“leveling down”). True, “leveling up” leaves Bob’s tax
bill unchanged. “Leveling up” nonetheless benefits Bob
because it eliminates the unfairness of being treated
differently. And if, as is often true in dormant Commerce
Clause cases, April and Bob compete in the same market,
then “leveling up” provides the concrete benefit of placing
a new burden on Bob’s competitors.
The majority’s rule does not work this way. As just
explained, Maryland can “cure” what the majority deems
discrimination without lowering the Wynnes’ taxes or
increasing the tax burden on any of the Wynnes’ neigh-
bors—by terminating the special nonresident tax. See
supra, at 16–17. The State can, in other words, satisfy the
majority not by lowering Bob’s taxes or by raising April’s
taxes, but by eliminating the taxes imposed on yet a third
——————
at 19–20. Relying on such a distinction to justify the test is entirely
circular, however, as the Court defines “inherent discrimination” in this
case as internal inconsistency. In any event, given the concern that
purportedly drives the Court’s analysis, it is mystifying why the Court
sees “virtue” in striking down only one of the two schemes under which
Bob is taxed twice. Ante, at 19. Whatever disincentive the original
scheme creates for Bob (or the Wynnes) to work in interstate commerce
is created just as much by the revised scheme that the Court finds
satisfactory.
Cite as: 575 U. S. ____ (2015) 19
GINSBURG, J., dissenting
taxpayer (say, Cathy). The Court’s internal consis-
tency test thus scarcely resembles “ordinary” anti-
discrimination law. Whatever virtue the internal con-
sistency test has in other contexts, this shortcoming
makes it a poor excuse for jettisoning taxation principles
as entrenched as those here.
* * *
This case is, at bottom, about policy choices: Should
States prioritize ensuring that all who live or work within
the State shoulder their fair share of the costs of govern-
ment? Or must States prioritize avoidance of double
taxation? As I have demonstrated, supra, at 16–19,
achieving even the latter goal is beyond this Court’s com-
petence. Resolving the competing tax policy considera-
tions this case implicates is something the Court is even
less well equipped to do. For a century, we have recog-
nized that state legislatures and the Congress are consti-
tutionally assigned and institutionally better equipped to
balance such issues. I would reverse, so that we may
leave that task where it belongs.