Tax Analysts Blog

25 Years of State Tax Notes

Posted on Sep 8, 2016

This month State Tax Notes  turns 25 years old. It’s quite the accomplishment. There were some rocky times, but the magazine has emerged as a place where state and local tax ideas are floated, the debates are spirited, and discussion is informed. The magazine is better than ever, and we’re excited for what the future may hold.

The History

No other publication has been as influential in the state and local tax field as State Tax Notes, and that might not have been so if not for Carol Douglas, the magazine’s founding editor. Carol began by writing a column on state taxes for Tax Notes, but after a few years, Tax Analysts decided that a full magazine was warranted.

Carol said that when  asked to start a full magazine, she thought, “That’s such a big task.” We’re all thankful that she took it. Tax Analysts proposed a monthly publication, but Carol didn't think the topic could be adequately covered any less often than weekly. “I hated to say it because it was going to be so much more work,” she said, but told her editors, “It really needs to be weekly because so much is happening.”

Almost immediately, the pages of State Tax Notes were filled with the very best commentary, analysis, and news about the biggest state and local tax issues of the day. “I think we covered every major controversy in depth and published every point of view on them. I’m very proud of that,” Carol said.

The Present

Carol’s legacy at State Tax Notes lives on in today’s magazine staff. They work hard to present unbiased news and columnists with a variety of different viewpoints. The magazine's goal is to combine the best in current awareness with analysis of state tax issues.

Some of the best exchanges happen when two columnists are willing to engage in a point-counterpoint series on an issue. Years ago, professor Richard Pomp and Robert Strauss differed on the disclosure of corporate taxpayer information. They argued well-researched positions ,and readers not only enjoyed the debate, they came away more informed. ( See Strauss, "State Disclosure of Tax Return Information: Taxpayer Privacy vs. the Public's Right to Know," State Tax Notes, July 5, 1993, p. 24; Pomp, "Corporate Tax Policy and the Right to Know: Enhancing Legislative and Public Access," State Tax Notes, Mar. 7, 1994, p. 603; Strauss, "The Political Economy of Business Tax Return Policy," State Tax Notes, Feb. 27, 1995, p. 873; Pomp, "The Political Economy of Tax Return Privacy -- Revisited," State Tax Notes, June 12, 1995, p. 2389.)

The pages of State Tax Notes have also detailed Tax Analysts' efforts to improve the transparency of state tax departments. Tax Analysts has always believed that a productive debate requires access to information -- information that tax authorities don’t always want disclosed. Tax Analysts has fought to obtain access to key documents in federal and state tax policy and administration, and it will continue to do so.

In the pages of State Tax Notes, Tax Analysts undertook a project to show how state tax departments use their discretionary power and how states provide guidance to taxpayers. The project has also examined how each state issues and makes available private letter rulings and audit manuals.  Reporters and editors quickly discovered just how much of a mess this area of law can be -- states vary widely in how and even whether they disclose the operations of their tax administration.

Twice now, Tax Analysts has been involved in litigation to force states to release guidance -- once in Kentucky and once in California. We expect to be involved in more litigation in the future. Tax Analysts doesn’t shy away from the fight to obtain documents that, in the words of Franklin Circuit Court Judge Philip Shepherd, have “real and significant consequences for the taxpayer the public.”

Shepherd’s discussion of taxpayer confidentiality in Tax Analysts v. Kentucky was particularly well reasoned. He recognized the importance of taxpayer confidentiality laws, but correctly noted that a taxpayer’s right to privacy is not absolute. There is necessarily a balancing test between the taxpayer’s right to privacy and the public’s interest in the fair administration of a tax system.

Shepherd wrote, “Without public disclosure of the final rulings, there is no way for the public to know whether the Department has been fair and consistent or whether it has displayed political favoritism to some taxpayers over others. These considerations outweigh any privacy interest that may exist for taxpayers, especially when the names and identifying indicators have been redacted.”

Despite an initial win at the trial court, the Kentucky Department of Revenue has since appealed. We’re disappointed about the appeal, but are ready to take the case to the court of appeals and argue again. And of course, coverage of the Kentucky case and any other case we’re involved in will be detailed in State Tax Notes.

The Future

As state and local taxation becomes more complex, compliance will become more important for our readers. More states are diverging from federal conformity, which increases the amount of law that state and local tax departments must master in order to serve their clients. State Tax Notes will be essential for tracking these developments along with keeping readers informed about states’ never-ending quest for revenue.

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