State tax legislation confers numerous discretions on the Commissioners, the exercise of which may determine whether any tax liability arises. An understanding of the scope of discretionary powers and the avenues for challenging the exercise of discretions will often be critical for both revenue officers and for practitioners advising clients affected by the exercise of discretionary powers. This paper covers:
- what types of discretions exist in State tax legislation?
- how do you identify a discretion - when does ‘may' mean ‘may' and not ‘shall'?
- what constraints apply to Commissioners when exercising a discretion?
- what protections exist for taxpayers before, during and after the exercise of a discretion?
- avenues for challenging the exercise of a discretion
- practical considerations for taxpayers and the Commissioner when dealing with discretions
- should the use of discretions be encouraged?