Philly Credit Battle Could Sharpen Local Taxing Power Limits

Law360 Tax Authority
February 25, 2022

Richard Jones was quoted in the article, "Philly Credit Battle Could Sharpen Local Taxing Power Limits," published by Law360 Tax Authority [sub. req.].

The article discusses how a Philadelphia resident's challenge to the city's refusal to credit Delaware state income tax paid against the city's wage tax could clarify whether U.S. Supreme Court precedent requires state and local taxes to be analyzed together for constitutional purposes. A dispute brought to the Pennsylvania Supreme Court between Diane Zilka and Philadelphia over the city's decision to provide a credit against her city wage tax for tax paid to Wilmington, Delaware, but not for Delaware income tax, highlights conflicting interpretations of the U.S. Supreme Court's 2015 Comptroller v. Wynne ruling. In Wynne, the justices found that Maryland violated the dormant commerce clause by not crediting other state taxes paid against a county tax.

"The dispute raises the question of whether Wynne truly determined that state and local income taxes must be considered as one unit when examining if they operate within the bounds of the commerce clause. Is that what Wynne called for? That would be good to see a court address," Rich said.

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