Things Are Getting Gore-y: Maryland Decision Blurs Boundaries Between Constitutional Nexus and the Unitary Business Principle

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

In this article, Andrew Grace of KPMG LLP, discusses a recent Maryland Court of Special Appeals decision in which the court upheld the Comptroller's assertion of nexus over two out-of-state subsidiaries using the unitary business principle. Mr. Grace contends that the court incorrectly blurred the lines between separate state tax doctrines when, based on the in-state presence of the subsidiaries' parent, the court looked to the unitary business relationship of the parent and the subsidiaries as a justification for asserting nexus.