More than twenty states now require courts to take a fresh look at ambiguous laws rather than deferring to state tax agencies’ regulations and guidance. From Arizona to Florida, Texas, and Wisconsin, this trend creates potential settlement leverage for practitioners in state tax disputes far beyond the courtroom. As Baker McKenzie Partner Niki Ford told Catalyst in a recent Checkpoint News interview, in many states, “including a deference argument in a petition inherently strengthens the taxpayer’s position. Reminding the agency that a reviewing court or tribunal is not required to defer to that agency’s position gives the taxpayer a leg up and they can come at settlement negotiations from a stronger position.” If a measure recently passed by the Georgia legislature becomes law, the state would join the many others requiring “de novo review.”

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