Dept. of Revenue Rulings ‘Secretly Twisting the Tax Code?’

News Sentinel Editor Jack McElroy offers some thoughts on the secrecy surrounding Amazon’s dealings with the state on tax collections and the Department of Revenue’s private letter ruling policy.
An excerpt:
In fact, a legal agreement apparently does exist between the state and Amazon, a document called a “private letter ruling,” which was issued to the retailer by the state Department of Revenue.
What it says, though, we citizens don’t know. Details of private letter rulings — such as who’s involved — are secret.
There’s a reason for that. Private letter rulings are confidential communications between taxing authorities and individual taxpayers about their tax liability. As the name says, they are private, just as tax returns are.
Often such rulings occur at the federal level. A taxpayer can request a private letter ruling to find out how the IRS will treat a particular transaction. The IRS website explains:
“A private letter ruling, or PLR, is a written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer’s specific set of facts.”
The key word there is “laws.” A PLR interprets and applies the laws; it doesn’t rewrite or bend them to make special deals go through.
Stop and think. How it would be if the IRS based its interpretation of the tax code on handshake deals the president made with individual companies?
Yet that, apparently, is what has happened in Tennessee. One governor, Bredesen, promised Amazon a favorable tax ruling, and the revenue commissioner delivered. Now another governor, Haslam, wants to renegotiate that ruling, perhaps by limiting it to a few years
But how can the law be open to such negotiations?
…Secretly twisting the tax code to benefit one company is a bad approach to business recruiting, and one that ultimately will prove destructive.

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