The case has been closely watched by commentators and practitioners, and last week’s developments were covered in both Law360 and State Tax Notes. Even as late as last month, a State Tax Notes article by deputy editor Jennifer Carr with the apt title New York Can’t Ignore Wynne Forever observed that: “Wynne seriously undermined the key rationales of Tamagni, and applying Wynne to New York’s credit for statutory residents leaves little room for concluding anything other than that the statute is unconstitutional.”
The decisions are particularly surprising from a procedural standpoint. The appeals were taken both on “as of right” grounds (which allows an automatic appeal in a case that presented a substantial constitutional question) and also by way of motion for leave (or permission) to appeal. But the Court denied both bases for the appeals. The denial on the constitutional issue is most surprising. Though we don’t know for sure (because no written decision was issued), the Court’s view must have been that the question was not “substantial” because it had previously addressed the constitutional question in its 1998 Tamagni decision. But our argument—and one that has been put forth by many other commentators and practitioners—was that the Supreme Court’s 2015 decision in Wynne upended the Tamagni rationale and forced another look at the constitutional question. To deny these taxpayers the right to address this important constitutional question on the grounds that the Tamagni case still controls allows the Court to essentially decide the constitutional question on the merits without ever actually giving the taxpayers the right to appeal that the law guarantees in constitutional cases.
The next step, and only remaining step, is an appeal to the U.S, Supreme Court. In one of the articles last week, Professor Ruth Mason of the University of Virginia School of Law opined that “the U.S. Supreme Court would presumably want to correct the decisions.” We similarly believe that both Chamberlain and Edelman address important post-Wynne questions about the scope of the Commerce Clause and the internal consistency test, so we’re investigating whether a petition for certiorari to the Supreme Court is the right next step. Given all the support we’ve received from the legal and tax community, we’re encouraged to continue to seek justice on this important constitutional law issue.
