State Courts Shift Away from Chevron Deference in Anticipation of Key Supreme Court Decision

The U.S. Supreme Court’s 1984 decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. established a significant level of deference that federal judges could extend to administrative agencies when interpreting ambiguous laws. However, over the decades, this approach has faced criticism and scrutiny, particularly in the realm of tax legislation. Recently, states have progressively distanced themselves from Chevron-type deference, particularly in state tax administration. This deviation is occurring ahead of the forthcoming Supreme Court decision in Loper Bright, which could potentially reshape the judicial approach to interpreting tax laws. This shift suggests a growing trend of courts playing a more proactive role in tax law interpretation, according to legal experts at Eversheds Sutherland. The trajectory of this movement is likely to continue accelerating, potentially prompting a reevaluation of longstanding administrative assumptions.