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April 1, 2001
Georgia Attorney General Refuses to Disclose Terms of Special Corporate Tax Agreements
The State of Georgia has refused to disclose the terms of special agreements that determine how some Georgia companies are taxed. These agreements are intended to encourage the economic development of Georgia. In exchange for setting up new facilities in Georgia, some companies can renegotiate the rules that determine how their income will be taxed under Georgia laws. But neither the Georgia Department of Revenue nor the Georgia Attorney General are willing to disclose the terms of those agreements to the public. In other words, the government of Georgia basically is saying to its citizens, "Trust me on this one."

But there already are so many special tax breaks for businesses in Georgia that fewer than half of Georgia businesses pay income taxes. And tax experts at Tax Analysts, a non-profit with a history of working for public disclosure of federal and state tax rules, think that there is a better way of conducting the public's business: release the contents of the special agreements and let the public see what is in them. Afterall, says David Brunori, a tax law professor and an editor at Tax Analysts, the other taxpayers in Georgia have to make up any revenue lost under the special agreements, so they are entitled to see the terms of those agreements.

Tax Analysts first sought disclosure of the special agreements (rules for the "special allocation and apportionment of income") from the Georgia Department of Revenue and was turned down. Then the organization appealed to the Attorney General -- and lost again. But Tax Analysts publisher has taken similar cases against the federal Internal Revenue Service all the way to the Supreme Court -- and won. "The response of the Georgia Attorney General's Office clearly fails to serve the legitimate needs of the Georgia taxpayers," said Tom Field, founder and President of Tax Analysts.

Georgia government officials have argued that they are bound by law to protect trade secrets and confidential taxpayer information. But, according to Field, this should not prevent the Georgia government, acting under the authority of the Open Records Act, from making public the names of its favored corporate applicants, the tax benefit given to each, and the legal reason used to justify Georgia officials' decisions to grant special tax rules to some of the companies but not to others.

"Similar disclosure challenges have been resolved by the U.S. Internal Revenue Service in disclosing hundreds of thousands of rulings to the public," said Field. "And in each case, the IRS simply deleted confidential financial information while retaining the substance of its decision and the legal reasoning supporting it. Georgia should do likewise." Tax Analysts intends to continue pressing for disclosure of this information through the efforts of State Tax Notes, its publication covering state tax law and policy.

About Tax Analysts

Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.

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