Tax Attorneys Examine Remedies for Challenges to Constitutionality of Discriminatory Tax Exemptions

April 13, 2020
Journal of Multistate Taxation & Incentives

Bass, Berry & Sims attorneys Mike Sontag, Steve Jasper, and Michael Cottone authored an article for the Journal of Multistate Taxation & Incentives that examined the appropriate remedy when a taxpayer successfully challenges the constitutionality of a discriminatory tax exemption. Following successful challenges, states have often attempted to eliminate an unconstitutional exemption instead of providing a refund. The authors argue that courts should generally not allow states to retroactively eliminate an unconstitutional tax exemption in response to a successful challenge. Instead, in the vast majority of cases, the correct result is “to provide the taxpayer a refund for the amounts that would not have been paid had it received the same exemption.”

The full article, “What to Do with an Unconstitutional Exemption?,” was published in the May 2020 issue of the Journal of Multistate Taxation & Incentives and is available here.

What to Do with an Unconstitutional Exemption?, Michael Sontag, Stephen Jasper & Michael Cottone, Journal of Multistate Taxation & Incentives, Vol. 30, No. 2, Copyright 2020, Thompson Reuters/Tax & Accounting.