Wynne v. Comptroller of Md., 228 A.3d 1129

Background

Brian and Karen Wynne, Maryland residents, received 2006 pass-through income from a Maryland S‑corp that was taxed by many other states; they claimed out‑of‑state tax credits on their Maryland return.
Maryland law then allowed a credit only against the state portion of the Maryland income tax, not the county ("piggyback") portion; the Comptroller disallowed the Wynnes’ credit for the county tax and assessed additional tax.
The Wynnes challenged the scheme under the dormant Commerce Clause; Maryland Court of Appeals and the U.S. Supreme Court held the scheme unconstitutional and said extending the credit to the county tax would cure the defect.
While the Wynne appeal to the Supreme Court was pending, the General Assembly enacted the 2014 and 2015 Budget Reconciliation and Financing Acts (BRFAs) expanding the credit retroactively, authorizing refunds, and setting interest on Wynne‑related refunds pegged to the prime rate (via 2014 BRFA §16) rather than the 13% statutory minimum then in TG §13‑604(b).
After the Supreme Court affirmed, the Comptroller issued refunds using the BRFA‑set rate (about 3%); the Wynnes sought the 13% statutory rate and challenged §16 as violating the dormant Commerce Clause; the Tax Court struck §16, but the Circuit Court reversed.
The Court of Appeals affirmed the Circuit Court: §16 does not violate the dormant Commerce Clause; the Legislature permissibly set the remedial interest rate considering fiscal needs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether 2014 BRFA §16 (prime‑pegged interest on Wynne refunds) violates the dormant Commerce Clause	§16 disadvantages taxpayers engaged in interstate commerce (Wynne claimants) and is discriminatory in effect; Wynne should get 13% interest	Interest on refunds does not sufficiently implicate or discriminate against interstate commerce; the Legislature may tailor remedies and consider fiscal planning	§16 does not violate the dormant Commerce Clause
Whether the state must pay the statutory 13% refund interest absent explicit remedial legislation	Wynne: absent a remedial rate, the 13% minimum would apply to refunds	State: Legislature enacted a specific remedial regime and may set rates for retroactive refunds	Legislature may specify a remedial interest rate; Wynne is not entitled to 13% here
Whether interest on retroactive tax refunds should be treated like a tax for dormant Commerce Clause purposes	Wynne: interest is part of the remedy and should be judged like the underlying tax	State: interest is attenuated from commerce and unlikely to affect interstate investment decisions	Interest rate here is too attenuated to substantially affect interstate commerce
Whether plaintiffs met burden to show discrimination in effect	§16 gives lower interest only to Wynne claimants, who primarily engaged in interstate commerce, thus disadvantaging interstate commerce	No evidence §16 altered competitive balance; refunds also reach taxpayers with non‑business out‑of‑state income; remedy addresses budget concerns	Plaintiffs failed to show discrimination in effect; §16 survives dormant Commerce Clause review

Key Cases Cited

Comptroller v. Wynne, 431 Md. 147 (Md. 2013) (state Court of Appeals held Maryland’s credit scheme violated the dormant Commerce Clause)
Comptroller v. Wynne, 575 U.S. 542 (2015) (Supreme Court affirmed that Maryland’s exclusion of county credit violated the dormant Commerce Clause)
McKesson Corp. v. Division of Alcoholic Beverages, 496 U.S. 18 (1990) (states may tailor remedies for commerce‑clause violations and weigh fiscal interests)
West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994) (tax measures can operate like tariffs and discriminate against interstate commerce)
Department of Revenue v. Davis, 553 U.S. 328 (2008) (discrimination analysis requires comparison of substantially similar entities/markets)
Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (Pike balancing: nondiscriminatory burdens evaluated by weighing local benefits against interstate burdens)
Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977) (examined discriminatory effect on interstate market for apples)
United States v. Lopez, 514 U.S. 549 (1995) (Commerce Clause categories guiding what implicates interstate commerce)