US SUPREME COURT DECISIONS

The New Hampshire Commuters Income Tax imposes a tax on nonresidents' New Hampshire-derived income above $2,000 at a 4% rate, except that, if the nonresident's State of residence would impose a lesser tax had the income been earned in that State, the New Hampshire tax is reduced to that amount. The Commuters Income Tax contains provisions that, in practical effect exempt from tax income earned by New Hampshire residents outside the State, and New Hampshire imposes no tax on its residents' domestic earned income.

Held: Under the rule requiring substantial equality of treatment for the citizens of the taxing State and nonresident taxpayers, the New Hampshire Commuters Income Tax violates the Privileges and Immunities Clause, since the tax falls exclusively on nonresidents' incomes and is not offset even approximately by other taxes imposed upon residents alone. Pp. 420 U. S. 665-668.

(a) The State's contention that the tax's ultimate burden is not in effect more onerous on nonresidents because their total tax liability is unchanged once the tax credit received from their State of residence is taken into account cannot be squared with the underlying policy of comity that the Privileges and Immunities Clause requires. Pp. 420 U. S. 665-666.

(b) The possibility that, in this case, Maine, the appellant taxpayers' State of residence, could shield its residents from the New Hampshire tax by amending its credit provisions does not cure, but, in fact, compounds, the constitutional defect of the discrimination in the New Hampshire tax, since New Hampshire in effect invites appellants to induce their representatives to retaliate against such discrimination. The constitutionality of one State's statutes affecting nonresidents cannot depend upon the present configuration of another State's statutes. Pp. 420 U. S. 666-668.

114 N.H. 137, 316 A.2d 165, reversed.

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, STEWART, WHITE, POWELL, and REHNQUIST, JJ., joined. BLACKMUN, J., filed a dissenting opinion, post, p. 420 U. S. 668. DOUGLAS, J., took no part in the consideration or decision of the case. chanrobles.com-red

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