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New tax-court system overruled

The Utah Supreme Court has killed the state's new tax-court system.

In a 5-0 ruling Tuesday, the court held that the law creating the six-judge system, launched just last April, is unconstitutional.The decision means taxpayers no longer can appeal a Tax Commission ruling to state district court and receive a new trial.

Instead, the only recourse for appeal is directly to the state Supreme Court.

"That isn't fair for taxpayers to only have that (Supreme Court appeal) option," said the law's sponsor, Sen. Howard Stephenson, R-Draper, and president of the business-backed Utah Taxpayers Association.

He said his legislation was prompted by "poor rulings by the Tax Commission and a rubber stamp by the Supreme Court."

The justices said the Legislature cannot strip power constitutionally reserved for the Tax Commission and transfer it to courts.

That attempt "evidences an obvious desire on the part of the Legislature to remove certain core functions from the (tax) commission and place them in what must be seen as a more sympathetic forum - the courts," Chief Justice Michael Zimmerman wrote.

"Whatever the merits of substituting generalist judges for the expertise of the commission, if any such wholesale change in the allocation of responsibility for administering this state's tax system is to be made, it must be made by a constitutional amendment passed by the people, not by an act of the Legislature," Zimmerman said.

Stephenson on Wednesday opened a file in the Office of Legislative Research and General Counsel for a proposed constitutional amendment.

Zimmerman was a key player in setting up the tax-court system that now is swept away.

He dissuaded reform proponents from creating tax courts by statute, and helped guide their creation through judicial rule.

"He was very instrumental in setting it up," said tax attorney Mark Buchi, who worked on the tax-court system for three years.

Zimmerman's role is "interesting, but not necessarily inconsistent," Buchi said. "It's a legal question vs. a practical question."