Wynne v. Comptroller of Md.

Brian Wynne and Karen Wynne v. Comptroller of Maryland No. 12, September Term 2019 Taxation – Tax Refunds – State Budget Legislation – Dormant Commerce Clause. A previous Court of Appeals decision held that the Maryland statute providing a credit against the Maryland income tax liability of a Maryland resident based on income taxes paid to other states on income earned in those states violated the dormant Commerce Clause of the federal Constitution. That decision held that the statute could be rendered constitutional by amending the credit provision to apply it more broadly, among other ways. That decision was appealed to the Supreme Court.

While the appeal was pending, the General Assembly, in anticipation that the Supreme Court would affirm the decision, enacted State budget reconciliation and finance acts that broadened the tax credit, authorized refunds computed on a retroactive application of the credit, and specified that the interest rate paid on those refunds would be pegged to the prime rate of interest charged by banks (instead of the minimum 13% interest rate that the tax code already provided for certain refunds). After the Supreme Court affirmed the Court of Appeals decision, payment of refunds and interest in accordance with the remedial legislation enacted by the General Assembly did not violate the dormant Commerce Clause. IN THE COURT OF APPEALS Circuit Court for Anne Arundel County OF MARYLAND Case No. C-02-CV-18-001788 Argument: October 2, 2019 No. 12 September Term, 2019 BRIAN WYNNE AND KAREN WYNNE V. COMPTROLLER OF MARYLAND _____________________________________ Barbera, C.J., McDonald Watts Hotten Getty Booth, Greene, Jr., Clayton (Senior Judge, Specially Assigned) JJ. ______________________________________ Opinion by McDonald, J. ______________________________________ Filed: June 5, 2020 This appeal is the latest chapter in litigation between Appellants Brian and Karen Wynne and Appellee State Comptroller. The litigation began when the Wynnes challenged an aspect of the Maryland income tax law – in particular, the credit allowed by State law against a Maryland resident’s income tax liability based on taxes the resident paid to other states on income derived from those states.

The Wynnes argued that the Maryland tax scheme discriminated against interstate commerce and thus violated what is known as the dormant Commerce Clause of the federal Constitution. Both this Court and the Supreme Court, in closely divided decisions, agreed with that argument. In response, the General Assembly amended the Maryland tax code to comply with the court decisions, authorized the Comptroller to pay refunds to those taxpayers affected by the provision held to be invalid, and provided for the State to pay interest on those refunds at a rate pegged to the prime rate used by banks, but less than the 13% interest rate paid on certain other refunds. After the Comptroller issued a refund to the Wynnes in compliance with the legislation passed by the General Assembly, the Wynnes appealed, seeking the higher rate of interest and arguing, among other things, that the interest rate set by the General Assembly violated the dormant Commerce Clause.

After an administrative ruling in the Wynnes’ favor, the Circuit Court for Anne Arundel County held that the General Assembly’s action did not violate the dormant Commerce Clause. We agree. I Legal Landscape This case concerns the rate of interest paid on certain income tax refunds. The refunds were authorized, and the interest rate was set, in budget-related bills passed by the General Assembly.

The dispute in this case concerns how the dormant Commerce Clause of the federal Constitution may constrain the choices made by the General Assembly when it authorized those refunds and established an interest rate for the refunds. To set the table, we begin with some basic principles. A. Tax Refunds and Interest Under the common law, a payment voluntarily made to the State, even if made in error, could not be recovered unless a statute specifically authorized a refund – a principle known as the “voluntary payment doctrine.” See Brutus 630, LLC v. Town of Bel Air, 448 Md. 355, 359-63 (2016); see also White v. Prince George’s Co., 282 Md. 641, 651-52 (1978). To mitigate the perceived harshness of this doctrine, the General Assembly has enacted various statutes authorizing the payment of refunds for mistaken, erroneous, or illegal payments made to the State.

Id. Among the statutes allowing for refunds are the laws relating to tax refunds.1 A taxpayer who erroneously pays, or is wrongfully assessed, more income tax than is due may make a claim for a refund of the amount of the overpayment. Maryland Code, Tax- 1 In some circumstances, due process considerations may require a state to provide a tax refund or take other action to rectify a constitutional violation. See Part IV.B.1 of this opinion. 2 General Article (“TG”), §13-901(a), (c).

The claim must be filed within the period allowed by statute. TG §13-1104. In certain circumstances specified by statute, the refund is to be paid with interest. See Comptroller v. Fairchild Indus., Inc., 303 Md. 280, 284 (1985) (payment of interest on tax refund is a “matter of grace” that must be authorized by legislative enactment).

The State pays interest with respect to a claim for refund of an overpayment of income tax only in limited circumstances. Indeed, it seems safe to say that the vast majority of income tax refunds in Maryland are paid without interest.2 For example, no interest is paid when money is withheld from a worker’s pay for income tax, the withholdings exceed the worker’s tax liability, and a refund is paid after a return is filed. See TG §13- 603(b)(2)(ii) (no interest payable for excess withholding). With respect to other refunds of income tax payments, no interest is to be paid if the overpayment is a result of an error or mistake of the taxpayer that is not attributable to the State.

TG §13-603(b)(2)(i). Even when interest is payable on a tax refund, it begins to accrue only at 45 days after a claim is made for the refund. TG §13-603(a). In other words, no interest is paid if the refund is made within 45 days of the claim.

For those circumstances in which the General Assembly has authorized the payment of interest on tax refunds, it has periodically adjusted the rate of interest. When the State 2 The federal government similarly does not pay interest on tax refunds to individuals, unless the IRS takes more than the administratively prescribed time (typically 45 days) to generate the refund after a tax return is filed. See IRS – Interest for Individuals, available at https://perma.cc/8265-HWXH. 3 income tax law was first enacted in 1937, that law provided for payment of 6% interest when the refund related to an overpayment that “result[ed] from an error not due to the fault of the taxpayer.” Maryland Code, Article 81, §242 (1937). 3 Over the years as inflation has waxed and waned, the General Assembly has, at various times, increased the rate of interest, reduced it, or pegged it to a particular benchmark. See, e.g., Chapter 139, Laws of Maryland 1975 (increasing rate of interest to 9%); Chapter 615, Laws of Maryland 1982 (rate of interest to be set in relation to “average investment yield on State money”); Chapter 322, Laws of Maryland 2016 (gradually reducing minimum rate of interest).

Pertinent to this case, in 2006, the General Assembly amended the statute to increase the interest rate on income tax refunds to a minimum of 13%. Chapter 587, Laws of Maryland 2006, codified at TG §13-604(b).(2006).4 A decade later, the General Assembly amended that statute to gradually reduce the minimum rate of interest on tax refunds. Chapter 322, Laws of Maryland 2016. 3 See Chapter 11, §8, Special Session, Laws of Maryland 1937 (enacting income tax law). 4 The 2006 legislation set the rate of interest at “the greater of” 13% or three percentage points above the prime rate of interest charged by banks. Another aspect of that legislation was to equate the interest rate paid on those refunds for which interest was authorized with the interest rate to be paid on moneys owed to the State.

Previously, in Maryland, a higher interest rate was charged on moneys owed to the State than paid on refunds, as is the case under federal tax law and the law of a number of other states. See, e.g., Shop Talk: Are State Tax Interest Rates a Secret Weapon for Eliminating State Deficits, 119 J. Tax’n 144 (2013). The policy underlying that difference is presumably to incentivize the filing of timely and accurate tax returns. 4 As we shall see, the General Assembly provided specific direction as to the payment of refunds in situations such as that of the Wynnes, as well as the rate of interest to be paid on any such refunds. As we shall also see, that direction came in annual budget-related bills.

B. Balancing the State Budget with the “BRFA” Income tax proceeds and income tax refunds are part of the revenues and expenditures, respectively, that comprise the State budget. Like many state constitutions5 – and in contrast to the federal Constitution – the Maryland Constitution requires that the State budget be balanced. This requirement applies both when the budget is proposed by the Governor, and when it is enacted by the General Assembly. Maryland Constitution, Article III, §52(5a).

Under the executive budget system set forth in the State Constitution, the Governor submits to the General Assembly a proposed State budget in a Budget Bill that is to contain “a complete plan of proposed expenditures and estimated revenues” for the next fiscal year. Maryland Constitution, Article III, §52(3). With limited exceptions, the General Assembly may only reduce items of expenditure. Id., §52(6).

Upon its enactment by the General Assembly, the Budget Bill becomes law without further action by the Governor. 6 Id.; see 5 See Ronald K. Snell, State Constitutional and Statutory Requirements for Balanced Budgets, available at https://perma.cc/6KSE-CQ3P. 6 See, e.g., Chapter 19, Laws of Maryland 2020. 5 generally Richard E. Israel, A History of the Adoption of the Maryland Executive Budget Amendment (March 5, 2004), available at https://perma.cc/SP26-HJDM. To help carry out the constitutional directive to balance the budget, in recent decades, the Governor has frequently proposed, and the General Assembly has enacted, additional legislation specifically designed to complement the estimates of revenues and expenditures in the Budget Bill to ensure that the budget is balanced. Such a bill often carries a title such as the “Budget Reconciliation and Financing Act” – or “BRFA” for short.7 Such a bill combines a variety of measures for limiting expenditures that State law would otherwise require – e.g., altering statutory spending formulas or spending mandates – or increasing revenues beyond what would otherwise be generated by existing law – e.g., increasing taxes or fees or transferring funds from special funds to the general fund on a one-time basis – thereby eliminating a gap that might otherwise exist between expenditures and revenues under the Budget Bill alone.8 A BRFA is enacted after the enactment of the Budget Bill to which it pertains.9 7 See, e.g., Budget Reconciliation and Financing Act of 2020, Chapter 538, Laws of Maryland 2020. A BRFA is typically introduced as an “administration bill” at the request of the Governor.

See Blackstone v. Sharma, 461 Md. 87 , 126 n.19 (2018). 8 Typically, the Governor proposes, and the General Assembly enacts, a third budget-related bill known as the Capital Budget Bill, which concerns longer-term capital projects and is regarded as a Supplementary Appropriation Bill governed by Article III, §52(8) of the State Constitution. See, e.g., Chapter 537, Laws of Maryland 2020. 9 Of the three budget-related bills, only the Budget Bill itself is mandated by the State Constitution and not subject to a gubernatorial veto. Maryland Constitution, Article III, §52(5) (“The Governor shall deliver … the Budget and a bill for all the proposed appropriations [to the General Assembly].”). 6 The Maryland Constitution requires that any bill “embrace but one subject.” Maryland Constitution, Article III, §29. In theory, the single subject of a BRFA is the balancing of the State budget.

See, e.g., Bill Review Letter for Senate Bill 192 (2020 BRFA) (April 28, 2020) at p. 2. C. The Dormant Commerce Clause State fiscal laws are constrained in certain respects by the federal Constitution. The Constitution expressly authorizes Congress “[t]o regulate Commerce . . . among the several States” – a provision referred to as “the Commerce Clause.” Article I, §8, cl. 3. The Supreme Court has long recognized that the Commerce Clause necessarily contains a “negative implication” – i.e., that states may not discriminate against interstate commerce without congressional approval.

This negative implication has come to be known as the “dormant Commerce Clause.”10 This interpretation of the Commerce Clause strikes at “one of the chief evils that led to the adoption of the Constitution” – economic protectionism by states that would burden interstate commerce. See Comptroller v. Wynne, 135 S.Ct. 1787, 1794 (2015) (citing The Federalist Nos. 7, 11 (Alexander Hamilton), and 42 (James Madison)). 10 The term “dormant” generally means “inactive” or “asleep.” Given the frequency with which this constitutional doctrine is invoked to challenge state legislation, it is, as some have characterized it, “anything but dormant.” Direct Marketing Assn. v. Brohl, 814 F.3d, 1129, 1148 (10th Cir. 2016) (Gorsuch, J., concurring). The doctrine is also referred to, perhaps more accurately, as the “negative Commerce Clause.” See, e.g., South Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 2100 (2018) (Thomas, J., concurring); Frey v. Comptroller, 422 Md. 111, 142 (2011). 7 Justice Robert Jackson once noted that the Commerce Clause “is one of the most prolific sources of national power and an equally prolific source of conflict with legislation of the state [as] it does not say what the states may or may not do in the absence of congressional action, nor how to draw the line between what is and what is not commerce among the states.” H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 534-35 (1949). It has thus fallen to the Supreme Court to give meaning to the dormant Commerce Clause as one of the “great silences of the Constitution.” Id.

However, not all justices have warmed to the task. See Comptroller v. Wynne, 135 S.Ct. at 1808 (Scalia, J., dissenting) (characterizing dormant Commerce Clause as a “judicial fraud”). II The Prequel A. The Wynne’s 2006 Pass-Through Income During the period relevant to this case, Brian and Karen Wynne were a married couple who resided in Howard County, Maryland.11 During 2006, they received significant income as a result of Mr. Wynne’s position as president of Maxim Healthcare Services, Inc. (“Maxim”), a nationwide medical staffing company, and his partial ownership of Maxim. Maxim was organized as a Maryland corporation that elected to be treated as a Subchapter S corporation under the Internal Revenue Code.

As such, Maxim passed its 11 Many of the facts recited in this part of the opinion are derived from a stipulation of facts dated September 2, 2016, filed by the parties in the Maryland Tax Court and included in the record of this case. 8 income through to its owners, such as Mr. Wynne, without that income being taxed at the corporate level. 12 With respect to tax year 2006, much of Maxim’s income was generated by operations outside Maryland and was also taxed by the states in which it was earned. Because they derived income from Maxim’s operations in many states, the Wynnes filed state income tax returns for the 2006 tax year and paid income taxes on pass-through income in 39 other states in which Maxim operated. As Maryland residents, the Wynnes also reported that income on their 2006 Maryland income tax return. B. Tax Credit for Out-of-State Income Taxes as of 2006 With respect to tax year 2006, the Maryland income tax law included two features that led the Wynnes to challenge the constitutionality of the tax code.

First, as remains true today, the income tax was comprised of two components – a “state income tax” and a “county income tax,” sometimes called the “piggyback tax,” that varies according to the county of the taxpayer’s residence.13 TG §10-101 et seq. The State Comptroller collects the entire income tax and remits the county portion to the appropriate county. 12 Under the Internal Revenue Code, a shareholder in a Subchapter S corporation reports the share of income and losses on the shareholder’s personal federal income tax return and, in this way, the income is characterized as having “passed through” to its owners “as if such item were realized directly from the source from which realized by the corporation.” 26 U.S.C. §1366 (b). Maryland has adopted similar tax treatment for Subchapter S corporation income reported by shareholders on their personal state income tax returns. TG §10-104(6). 13 Nonresidents who earn income in Maryland pay a “special nonresident tax” in lieu of the county portion of the income tax, which is set at a rate equal to the lowest county tax rate.

TG §10-106.1. 9 Second, as in many other jurisdictions, Maryland law provides a tax credit for income taxes paid on the same income in other jurisdictions. As of 2006, that tax credit was applied against the state portion of the Maryland income tax, but it was not applied against the county portion of the Maryland income tax. TG §10-703(a) (2015). C. The Wynnes Challenge the Maryland Tax Credit Scheme On their 2006 Maryland income tax return, the Wynnes reported their “pass- through” income from Maxim and claimed a tax credit for income taxes paid in other states on both the state and county portions of their Maryland income tax return.

Consistent with the State income tax law at that time, the Comptroller disallowed the credit claimed as to the county income tax and issued a tax assessment against the Wynnes. The Wynnes sought review in the Maryland Tax Court. With a minor exception, the Tax Court upheld the Comptroller’s decision. While the matter was on appeal, the Wynnes paid the assessment.

The Wynnes then pursued judicial review in the Circuit Court for Howard County. The Circuit Court held that the absence of a credit with respect to the county portion of the Maryland income tax meant that the Maryland tax credit scheme violated the dormant Commerce Clause. In a divided decision, this Court agreed with the Circuit Court, as did the United States Supreme Court in a decision involving an unusual 5-4 split.14 Comptroller v. Wynne, 431 Md. 147 (2013), aff’d, 575 U.S. 542 (2015). 14 Justice Alito wrote the majority opinion, which was joined by the Chief Justice, Justice Kennedy, Justice Breyer, and Justice Sotomayor. Three dissenting opinions were authored or joined by Justice Scalia, Justice Thomas, Justice Ginsburg, and Justice Kagan. 10 Both this Court and the Supreme Court held that extension of the tax credit to the county portion of the income tax would cure the constitutional defect, but both decisions also acknowledged that there might be other ways of adjusting the State income tax law that would avoid the sort of discrimination against interstate commerce forbidden by the dormant Commerce Clause. 431 Md. at 189 ; 135 S. Ct. at 1806 .

D. Legislative Response While the case was pending in the Supreme Court, the General Assembly anticipated that the Supreme Court might affirm this Court’s decision and responded in three significant ways: (1) amending the Maryland tax code to allow a tax credit against the county portion, as well as the state portion, of the Maryland income tax for income taxes paid in other states; (2) providing for the payment of refunds with respect to prior tax years as a result of the Wynne decision; and (3) setting the annual rate of interest paid on those tax refunds. The General Assembly took those actions as part of the BRFAs in 2014 and 2015. See Chapter 489, §§4, 26, 27, Laws of Maryland 2015; Chapter 464, §§16, 20, Laws of Maryland 2014.15 15 Other states also reacted to the Supreme Court’s decision by changing their treatment of tax credits for income taxes paid to another state. See, e.g., Ind.

Code Ann. §6-3.5-7 (providing credit for out-of-state tax paid against the then in-effect Indiana county economic income tax); Kan. Stat. Ann. §79-32 ,111(a) (applying tax credits towards local income taxes); see also https://perma.cc/3SAL-T7NN (explaining change in practice in Iowa with respect to tax credits and availability of refunds in light of the Wynne decision). 11 1. 2014 BRFA During the 2014 session of the General Assembly, the Governor proposed, and the General Assembly ultimately enacted, a BRFA to help balance the budget bill for fiscal year 2015. Chapter 464, Laws of Maryland 2014 (“2014 BRFA”). As originally proposed by the Governor, the bill relaxed some limitations on the use of special funds, increased the portion of certain revenues directed into the State’s general fund, transferred a portion of the accumulated funds in certain special funds to the State’s general fund, and reduced certain mandated expenditures under existing law.

Senate Bill 172 (2014), first reader.16 The bill was amended in various respects by the General Assembly as it made its way through the Legislature. An amendment initially proposed by the House, and ultimately adopted by the Conference Committee and approved by both houses of the Legislature, dealt with the potential fiscal consequences of two then-recent decisions of this Court. One of those decisions was this Court’s decision in the Wynne case.17 At that 16 The 2014 BRFA was introduced after the State’s Bureau of Revenue Estimates reported in December 2013 that the State had experienced a relatively slow recovery from the Great Recession of 2008-9 and characterized the fiscal outlook as “precarious.” See Estimated Maryland Revenues for Fiscal Years ending June 30, 2014 and June 30, 2015 (December 11, 2013), available at https://perma.cc/UX7N-SJXT. 17 The other decision was DeWolfe v. Richmond, 434 Md. 403 (2012) and 434 Md. 444 (2013), which established a right to counsel for criminal defendants at initial bail hearings and which would potentially increase expenditures to compensate appointed counsel. See 2014 BRFA §17; Revised Fiscal and Policy Note for Senate Bill 172 (June 17, 2014) at 63-64.

Both Wynne and Richmond potentially increased the financial burden of county governments, as the Wynne case could require refunds of the local portion of the State income tax and the Richmond decision affected expenses in the District Court and circuit courts normally borne by the pertinent county. 12 time, it was estimated that the State owe approximately $190 million in refunds and $51 million in interest calculated under the then-current law, and that tax revenues would decrease by $43 million annually, if the Wynne decision were affirmed.18 In response, Section 16 of the 2014 BRFA provided: That, notwithstanding any other provision of law, the Comptroller shall set the annual interest rate for an income tax refund that is the result of the final decision under Maryland State Comptroller of the Treasury v. Brian Wynne, et ux. 431 Md. 147 (2013) at a percentage, rounded to the nearest whole number, that is the percent that equals the average prime rate of interest quoted by commercial banks to large businesses during fiscal year 2015, based on a determination by the Board of Governors of the Federal Reserve Bank. 2014 BRFA §16.19 It was estimated that this provision would save an estimated $38.4 million in interest expenditures with respect to potential refunds that would otherwise reduce revenue passed on to local governments.20 This section of the 2014 BRFA thus reduced State and local expenditures by limiting the interest to be paid on a refund occasioned by the Wynne case to the prime rate – a rate 18 Revised Fiscal and Policy Note for Senate Bill 172 (June 17, 2014) at 67; Bill Review Letter for Senate Bill 172 (May 14, 2014) at 10; see also Revised Fiscal and Policy Note for House Bill 72 (June 19, 2015) at 71. 19 This annual interest rate was made applicable to income tax refunds based on the Wynne decision attributable to tax years from 2006 through 2014. 2014 BRFA §20. As indicated in the text, the General Assembly later provided in separate legislation for a graduated reduction in the interest rates generally pertaining to tax refunds. Chapter 322, §1, Laws of Maryland 2016. 20 Revised Fiscal and Policy Note for Senate Bill 172 (June 17, 2014) at 67. 13 of interest banks charge for creditworthy borrowers21 – instead of the minimum 13% rate that the law otherwise provided in the tax code at that time. 2. 2015 BRFA During its next session, while the Wynne case remained pending in the Supreme Court, the General Assembly again addressed the prospective Supreme Court decision in the 2015 BRFA. Chapter 489, Laws of Maryland 2015 (“2015 BRFA”).22 In anticipation that the Supreme Court might affirm this Court’s decision, the Legislature amended the income tax law to provide a credit against the county income tax for income taxes paid in other states on the same income. 2015 BRFA §4.

The effectiveness of the new credit was made contingent on advice from the Attorney General that the decision ultimately issued by the Supreme Court would invalidate the then-current practice of allowing a credit only against the state portion of the Maryland income tax. 2015 BRFA §§4, 26. The legislation also set forth a mechanism for the Comptroller to pay refunds and ultimately pass the cost on to the counties that were the beneficiaries of the county income tax. Id., §27. A little more than a month after the General Assembly adjourned in 2015, the Supreme Court issued its decision affirming the judgment of this Court. 21 “Prime rate” is “the interest rate that a commercial bank holds out as its lowest rate for a short-term loan to its most creditworthy borrowers.” Interest rate, Black’s Law Dictionary (11th ed. 2019). 22 Like the 2014 BRFA, the 2015 BRFA also addressed the fiscal impact of this Court’s decision in the Richmond case.

See 2015 BRFA §20; Revised Fiscal and Policy Note for House Bill 72 (June 19, 2015) at 69. 14 III The Sequel A. The Comptroller Issues Refunds Following the Supreme Court decision, the Comptroller issued tax refunds to affected taxpayers and, in accordance with the direction of the General Assembly in the 2014 BRFA, included interest computed at an annual rate of 3%. The parties agree that, assuming the retroactive application of the credit for the county portion of the state income tax enacted in the 2015 BRFA, the Wynnes overpaid their 2006 Maryland income tax by $28,789 (including interest and penalties). The Wynnes received $33,084, including a refund of the overpayment and $4,295.52 in interest at an annual rate of 3%. If the interest portion of the payment had been calculated at an annual rate of 13%, the Wynnes would have received more than $14,000 in additional interest.

B. The Wynnes Dispute the Rate of Interest The Wynnes objected to the payment of interest on their refund at the 3% rate, as specified by 2014 BRFA §16, and pursued an administrative appeal. The Comptroller issued a final determination in March 2016 rejecting their appeal. The Wynnes then sought relief in the Maryland Tax Court. In a three-paragraph order issued in May 2018, the Tax Court stated that it was following “the exact same logic” as the Supreme Court in the Wynnes’ earlier appeal and, without further elaborating its reasoning, concluded that 2014 BRFA §16 was unconstitutional and reversed the Comptroller’s decision.

The Tax Court did not address other constitutional arguments made by the Wynnes in their appeal – i.e., that 2014 BRFA §16 was a retroactive law that violated the Due Process Clause, that §16 15 effected an unlawful taking in violation of the Fifth and Fourteenth Amendments, or that it deprived them of an accrued right in violation of Article 24 of the Maryland Declaration of Rights. The Comptroller sought judicial review of the Tax Court order in the Circuit Court for Anne Arundel County. On December 21, 2018, the Circuit Court issued an 11-page opinion in which it analyzed the application of the dormant Commerce Clause and concluded that 2014 BRFA §16 did not violate that provision. Accordingly, the Circuit Court reversed the decision of the Tax Court and remanded the matter for further proceedings.

The Circuit Court specifically noted that it was not reaching the other constitutional arguments made by the Wynnes. The Wynnes filed a timely notice of appeal. Prior to briefing and argument in the Court of Special Appeals, the Wynnes filed a petition for a writ of certiorari with this Court, which we granted. IV Discussion A. Standard of Review Like the previous iteration of the controversy between the Wynnes and the Comptroller concerning their 2006 income tax return, this case involves judicial review of an administrative agency decision – i.e., a decision of the Maryland Tax Court – in light of the dormant Commerce Clause of the federal Constitution.

For the reasons set forth in our prior decision, we “look through” the decision of the Circuit Court to directly review the agency decision and do not defer to the agency’s views on a question of constitutional law. 16 See Wynne, 431 Md. at 160-61 . In any event, there was no explication of the constitutional issue in the Tax Court order to which we could defer. B. Whether 2014 BRFA §16 Violates the Dormant Commerce Clause We begin where we ended the last episode of this saga. In analyzing the application of the dormant Commerce Clause to the county portion of the Maryland income tax, both this Court and the Supreme Court applied what is known as the “internal consistency test” to assess state tax schemes under the dormant Commerce Clause.

Both decisions used hypothetical examples to illustrate the operation of the existing Maryland tax credit and how it disfavored Maryland residents who had income that was earned and taxed out-of- state. Each majority opinion compared a hypothetical Maryland taxpayer who earned all or part of his income from interstate activities (Bob in the Supreme Court’s opinion, John in this Court’s opinion) with a hypothetical Maryland taxpayer who earned all of her income from intrastate activities (April in the Supreme Court’s opinion, Mary in this Court’s opinion).23 In those examples, the taxpayers who had income from interstate commerce (Bob and John) paid significantly more total tax than their counterparts whose income derived solely from activities in Maryland (April and Mary). This comparison supported the conclusion that the existing Maryland tax scheme