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Friday, May 25, 2012

Courts - Long Reuters article examines incleasing use of Tax Courts by the various states

Nanette Byrnes of Reuters reports in a lengthy survey article, here as published in the Chicago Tribune. A few quotes:

[Until recently] Georgia taxpayers challenging state tax authorities had to pay disputed taxes before appealing them. Their appeals would be heard by the same Department of Revenue that levied the tax in the first place. And further appeals could be overruled by the revenue commissioner or heard by a judge without tax expertise.

Under the new system, tax appeals will be heard by a tax expert who is independent of Georgia's Department of Revenue, and taxpayers will not have to pay disputed taxes before appeal.

Six U.S. states have established or considered establishing independent tax tribunals in the last two years, a trend supported by the business community, but one which also is stirring debate about the need for these new tribunals.

In addition to Georgia, Illinois approved a law last year to create a tax court by 2013. * * *

Eighteen other states have well-established tax courts, and another nine states and the District of Columbia offer independent tax courts or forums that do not have to be staffed by tax experts.

Twenty-one states, including Alabama, do not have independent tax courts at all, among them are three of the largest states - California, Texas and Florida. * * *

Of the 18 established state tax courts or tribunals, four have been created since 2003 - in West Virginia, Alaska, Kansas and Mississippi. Counterparts in Oregon, Wyoming, New Hampshire, New York and Indiana date to the 1990s and 1980s. Another nine have been around for more than 30 years.

Their structures vary from state to state, but generally these tribunals offer a place where taxpayers can challenge the decisions of tax authorities, from individual and corporate income taxes to sales and property taxes.

States without an independent court generally rely on administrative hearing systems within their revenue departments to adjudicate tax disputes, like the one Georgia had. Unhappy taxpayers in these systems often may appeal to state courts, but these lack specialized tax judges.

Proponents of the new tax courts include lawyers' groups and corporations. They say the courts handle appeals more quickly and in ways that are fairer to taxpayers than when the appeals are under the control of state revenue departments.

Posted by Marcia Oddi on May 25, 2012 10:12 AM
Posted to Indiana Courts