The Supreme Court on Monday refused to allow New Hampshire to sue neighboring Massachusetts over an income tax dispute involving people who have been working from home during the coronavirus pandemic.
The justices rejected New Hampshire’s complaint without comment. The state objects to Massachusetts’ collection of income tax from roughly 80,000 New Hampshire residents who are employed by Massachusetts companies, but who have been working remotely.
New Hampshire wanted the justices to declare Massachusetts’ collections unconstitutional and order a refund to people who are paying taxes of just over 5%.
The issue is especially sensitive in New Hampshire, which lacks a state income tax. But New Hampshire also drew support from New Jersey and Connecticut, among others.
Residents of those states who are employed by New York businesses also generally pay state income tax to New York.
The Biden administration recommended the justices stay out of the dispute. Justices Samuel Alito and Clarence Thomas said they would have allowed the lawsuit to go forward.