Reiling v. Comptroller

Henderson, J., delivered the opinion of the Court. This appeal is from a decree of the Circuit Court for Anne Arundel County, in equity, sustaining a demurrer to and dismissing a bill of complaint. The bill alleged that the appellant was an attorney admitted to practice in the State Of Illinois but employed by the Bureau of Internal Revenue in Washington. During the years 1944 and 1945, he was so employed but maintained his citizenship and domicile in Illinois, although he resided and owned a dwelling in Chevy Chase, Maryland.

In 1949 the Comptroller of the State of Maryland sent him a notice of estimated assessment of Maryland income tax, including interest and penalty, for the calendar years 1944 and 1945. He requested a statement as to its ³⁸⁶ computation, and an abatement on the ground that it was unconstitutional. He was furnished with a statement showing the tax was calculated on account of the salary he received from the federal government. He complains that the tax was not correctly computed, but nevertheless he did not further challenge the assessment, although told that it would become final if he did not do so within fifteen days, (section 300, Article 81, Code of 1951) nor did he exercise his right to appeal to the State Tax Commission (section 305, Article 81, Code of 1951), and thence to the courts (sections 305 and 255).

None of these appeals would have entitled him to a stay, but had he followed the procedure outlined in the sections cited and obtained a final adjudication in his favor, he would have been entitled to a refund with interest under section 257, Article 81, Code of 1951. Instead of pursuing the statutory remedy, he let the time for appeal expire and subsequently brought this bill for an injunction and declaration that the assessment is null and void. The appellee, while contending that the tax is valid in any event, challenges the appellant’s standing to invoke the aid of a court of equity after having failed to pursue his statutory remedy. The appellant attempts to meet this contention by arguing that an appeal to the Tax Commission and thence to the courts is allowed only to a dissatisfied “taxpayer”, defined in section 275(c), Article 81 of the 1951 Code, as “any person required by this sub-title to pay a tax or file a report”.

He contends that he is not a “taxpayer” within this definition. The definition quoted is, however, only “for the purposes of this sub-title and unless otherwise required by the context”. In the context of section 305, the right to appeal is not limited to persons whose liability to some tax is admitted. There is a broader definition of “taxpayer”, in section 2 of Article 81, to include “any person * * * paying or liable to pay any tax, or against whom any liability for taxes is claimed or asserted, or could be claimed or asserted * * Moreover, under section 290, it is required that “every in ³⁸⁷ dividual resident of this State” file returns under the conditions stated. “Resident” is defined in section 275 (i) to mean “an individual domiciled in this State on the last day of the taxable year, and every other individual who, for more than six months of the taxable year, maintained a place of abode within this State, whether domiciled in this State or not * * The appellant clearly falls within the latter category.

If he is exempt from the tax, as contended, it is not because the statute is not in terms applicable to him, but because the statute cannot be constitutionally applied as the legislature intended. In Wood, et al. v. Tawes, 181 Md. 155 , 28 A. 2d 850 , certiorari denied 318 U. S. 788 , 63 S. Ct. 982 , 87 L. Ed. 1154 , this court not only entertained a direct appeal by residents, claiming constitutional immunity from taxation some of whom were in