Nov. 4, 2019, 9:35 AM
The Supreme Court won’t hear a case on the extent of a state’s power to levy taxes on the income of an interstate business.
Staples Inc. and Staples the Office Superstore Inc. sought Supreme Court review after losing in court when challenging a tax bill from the state of Maryland. Neither conduct meaningful business in Maryland, but the state imposed taxes based “entirely on the operations of their affiliates,” they said in the petition for high court consideration.
The Maryland comptroller assessed a nearly $14 million tax bill for Staples Inc. and a $498,000 tax bill for the Superstore for the tax years 1994 through 2004, according to court documents. The Court of Special Appeals of Maryland upheld a state Tax Court ruling that affirmed the assessment.
The companies argued the comptroller’s assessment was based on a distorted calculation that violates the due process and commerce clauses of the U.S. Constitution, according to court documents.
“The present case illustrates the distortions that this sort of overreach produces,” the petition said.
Counsel for Staples didn’t immediately return a request for comment.
The case is Staples v. Comptroller, U.S., No. 19-119, 11/4/19.