On April 29, 2021, Georgia Senate Bill 185 was made effective and overturned decades of judicial deference. The bill gives the Georgia Tax Tribunal wider authority to interpret the state tax code.
Historically, taxpayers arguing against ambiguous or unclear statutes, were subjected to the Chevron deference which delegated the interpretation of ambiguous statutes to the tax agency. Chevron deference was a principle established by the Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. in 1984. The case questioned how federal courts should view a federal agency’s interpretation of a statute that Congress directed the agency to implement. The Court ultimately ruled that federal courts should defer to the agency’s interpretation unless the interpretation was “arbitrary, capricious, or manifestly contrary to the statute.”
Chevron deference is grounded in the belief that when regulations from an administrative agency are not explicit, a court may not provide its own interpretation of the statute in lieu of a reasonable interpretation made by the administrative agency. However, in recent years, Chevron deference has been more widely criticized for its inconsistent application across cases. Additionally, taxpayers had a significantly lower chance of success in tax court under Chevron deference.
For more information on the Georgia Senate Bill 185 or for other concerns, please contact Brian Sengson or Peter Stathopoulos by calling 770.396.2200.