Georgia approval of state tax court is big news

Interesting, eventful stories are often obscured by larger narratives.   

While most indirect tax leaders, along with the rest of the world, watched the results of the U.S. presidential and congressional elections in early November, a momentous, tax-related ballot initiative quietly received voter approval in Georgia on Election Day.

Amendment 2 on the Georgia ballot establishes the Georgia Tax Court as a specialized judicial body with statewide jurisdiction and authority equal to superior courts with the state’s judicial branch concerning tax matters. This authority is crucial in that it distinguishes the Georgia Tax Court from the Georgia tax tribunal (which operates in the state’s executive branch) that it replaces.   

According to the amendment, Georgia Tax Court judges will be appointed by the state’s governor (subject to approval by the state’s Senate and House Judiciary Committees) to fulfill four-year terms. Judges will have the flexibility to conduct pretrial proceedings in any county, and the tax court will be part of Georgia's constitutional court system alongside other specialized courts like the state-wide business court.

As of 2020, 35 states had a tax tribunal. However, 29 of those tribunals are part of their state’s executive branch while only six are part of the state’s judicial branch. (These figures are likely sourced from the AICPA, which tracks state tax tribunals and the extent to which they allow CPAs to represent taxpayers in all tax matters before an independent tax forum.)

Georgia’s ballot initiative began as a legislative proposal to amend Georgia’s constitution so that the state tax court could be created. The proposal attracted broad bipartisan support; it received only a single dissenting vote during its passage by Georgia’s legislature. The Metro Atlanta Chamber strongly advocated for the amendment, which it helped draft. 

In a pre-election article for Law.com, legal reporter Thomas Spigolon highlighted several benefits promoted by the amendment's supporters. These included improved access and efficiency with hearings near plaintiffs’ offices, the tax court’s jurisdiction over constitutional issues, and Georgia gaining a competitive edge in attracting employers. Opponents of the proposal pointed to implementation costs and also questioned whether the previous tribunal systems needed to be replaced. 

Georgia’s electorate sided with the proponents. This makes for a great story with positive implications on companies that operate in states that have yet to create a dedicated tax court -- as I explain here.