Should out-of-state trusts be taxed?

The following excerpt is from Out-of-State Trusts Shouldn’t Be Taxed: Bloink & Byrnes Go Thumb to Thumb, thinkadvisor.com, May 8, 2019, in which Professors Robert Bloink and William Byrnes, give their opposing  opinions as to what the SCOTUS should decide:

The US Supreme Court in April agreed to resolve a conflict stemming from a case involving whether a state can constitutionally tax a trust when a trust beneficiary resided within the state, but did not receive any income from the trust.  In the case of North Carolina Department of Revenue v. Kimberly Rice Kaestner, the North Carolina Supreme Court ruled for the beneficiary in that case, finding that the North Carolina state-level tax on the New York-based trust was unconstitutional because it violated the due process clause of the U.S. constitution.

Currently, 11 states tax trusts based on the residency of trust beneficiaries—although nearly all states tax trust income once the beneficiary actually receives that income.  Courts in various states have disagreed over whether the residency-based tax is constitutional.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.