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Alabama Revenue Commissioner Julie Magee

Posted on December 16, 2015 by Doug Sheppard

Some state tax officials prefer to keep a low profile. And then there's Alabama Revenue Commissioner Julie Magee.

In both her day job and during her tenure as chair of the Multistate Tax Commission, the feisty Alabaman harkened back to the days of such firebrands as former Connecticut Commissioner of Revenue Services Gene Gavin and others who were not afraid to speak their minds in the face of private sector pressure. The business world -- Magee's stomping ground for 20 years before joining the Alabama Department of Revenue in 2011 -- is known for its competitiveness and might also be one source of her strength.

"Thank you, dear young man, for the free advice," Magee told one persistent state tax attorney on Twitter in September. "Now I suggest you get back to your paying clients and I to my public service."

The dispute was over one of Alabama's more controversial measures, Regulation 810-6-2-.90.03, which takes effect January 1, 2016. The regulation essentially codifies economic nexus, a standard that industry has been fighting for years; the regulation requires a retailer to collect and remit sales tax if its sales in Alabama exceed $250,000 in the previous calendar year. Business representatives argued that it violates the spirit of Quill 's physical presence standard, but Magee sees it differently.

"Why would we continue to work under an antiquated court ruling? Look how old Quill was," Magee told Tax Analysts in September, echoing an argument state representatives have been making about physical presence for at least the last 15 years. "Times change, and things were once constitutional and they're not constitutional anymore. It is time for some sort of paradigm shift, and we can't continue to remain under the Quill ruling."

It wasn't the only time Magee opined on the remote sales taxation issue, let alone nexus. In June she testified before the U.S. House Judiciary Committee in both her MTC capacity and as secretary of the board of the Federation of Tax Administrators on federal legislation regarding mobile workforce taxation (H.R. 2315), taxation of digital goods (H.R. 1643), and business activity tax nexus (unnumbered at press time). Citing state sovereignty concerns, Magee spoke out against federal preemption of state tax authority, arguing that it would be unnecessary because states are already constitutionally barred from discriminating against interstate commerce.

AlabamaRevenueCommissioner Julie Magee"The competition for jobs and investment helps to keep overall state taxes low," Magee told the committee. "But to be responsive to these pressures, states must retain the choice over what to tax."

On behalf of the MTC, Magee had already written to Congress on April 8 to express concerns about H.R. 1643 and its Senate counterpart, S. 851. And before that, she did the same to U.S. House Judiciary Committee Chair Bob Goodlatte, R-Va., addressing issues with his draft of the Online Sales Simplification Act of 2015, such as its provisions on federal court jurisdiction on sales tax disputes and treatment of remote versus tangible retailers.

Speaking of letters, Magee's DOR got one of its own in March from Stephen P. Kranz of McDermott Will & Emery, who outlined the opposition to a proposal to amend an administrative rule (Regulation 810-6-5-.09) and expand, for tax purposes, the state's definition of tangible personal property to include streaming audio, video, and similar digital content available for public consumption.

Facing additional pressure from both business and Alabama state lawmakers, Magee withdrew the amendment on July 7 -- noting in her letter to Sen. Paul Sanford (R), the Alabama Legislative Council chair who had requested its withdrawal, that the DOR had been open in its process and given businesses adequate notice. The letter also seemed to indicate that the issue is not quite settled in Alabama.

"Please be advised that, although I am withdrawing the rule, we will continue to move forward with enforcing the laws for which we are charged to administer," Magee wrote. "As a result, the prospective protections afforded by the amended rule will not be available to businesses."

Whatever the case, the state and local taxation arena clearly hasn't heard the last of Julie Magee. In addition to her duties with the DOR, FTA, and MTC, she's also been involved in the IRS Security Summit and Authentication work groups.

Honorable mentions



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