SCOTUS Follows White House's Advice, Won't Hear New Hampshire-Massachusetts Tax Tussle

The U.S. Supreme Court on Monday rejected New Hampshire's attempt to sue Massachusetts over an income tax dispute that New Hampshire Governor Chris Sununu called an "unconstitutional attack on our sovereignty" after the Biden administration advised the justices to stay out of the dispute.

The dispute involved over 80,000 New Hampshire residents who are employed by Massachusetts companies but have been working from home because of the coronavirus pandemic. Massachusetts continued to collect an income tax of just over 5 percent from New Hampshire residents employed in Massachusetts, which Sununu said was unconstitutional.

"Massachusetts cannot balance its budget on the backs of our citizens, punish our workers for making the decision to work from home and keep themselves and their families and those around them safe. New Hampshire has no choice but to seek relief in our nation's highest court," Sununu said during a press conference last October.

For more reporting from the Associated Press, see below:

The justices rejected New Hampshire's complaint without comment.

Sununu said Monday that the court was "setting a costly precedent."

"This decision will have lasting ramifications for thousands of Granite State residents," he said in a statement.

The issue is especially sensitive in New Hampshire, which lacks a state income tax. 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.

Justices Samuel Alito and Clarence Thomas said they would have allowed the lawsuit to go forward.

Members of New Hampshire's Democratic congressional delegation also criticized the decision. Senators Jeanne Shaheen and Maggie Hassan, who last month introduced legislation to address the issue, said they would continue to pursue solutions to prevent workers from being penalized for putting the safety of their families and communities first.

"This decision is particularly brutal for those who fought to keep their heads above water amid the financial fallout of the pandemic. Every action should be taken to make things easier for our working families as we recover from COVID-19, not harder," said Shaheen.

Hassan said declining to hear the case was disappointing and shortsighted.

"What is happening to New Hampshire residents goes beyond New England and has a far-reaching impact on citizens across this country who are being forced to pay taxes for a state where they don't even work or live," she said.