The Supreme Court is holding oral arguments today in Tetra Tech Inc. v. Wisconsin Department of Revenue (DOR). The case provides an opportunity for the Wisconsin Supreme Court to address the deference Wisconsin courts afford regulatory agencies when interpreting statutory provisions that ultimately define agencies’ own power and reach.
The Supreme Court specifically requested parties brief the constitutionality of courts providing deference to agencies on questions of law. Great Lakes Legal Foundation filed an amicus brief in the case on behalf of 11 Wisconsin associations, arguing that Wisconsin courts afford regulatory agencies too much deference to interpret statues that define agencies’ own power and reach.
In 2007, the Environmental Protection Agency (EPA) required several paper companies to remediate the environmental impact of harmful chemicals into the Fox River. The collective group of paper companies formed Fox River Remediation, which hired Tetra Tech to perform the remediation. Tetra Tech subsequently hired Stuyvesant Dredging, Inc. (SDI) as a subcontractor. DOR audited the entities and found that Tetra Tech owed sales tax on the portion of its sale for services to Fox River Remediation on SDI’s activities, and Fox River Remediation owed use tax on the purchase of remediation services from Tetra Tech on SDI’s activities. The entities filed petitions for redetermination with DOR, then with the Tax Appeals Commission. A Wisconsin circuit court, then appeals court upheld the commission’s ruling, giving great weight deference to DOR’s interpretation of tax statutes. The case is now being appealed again at the Wisconsin Supreme Court.