During oral arguments in King v. Burwell, Solicitor General Verrilli made an oblique reference to a “learned treatise” concerning a statutory canon concerning how courts should read tax deductions:
Your Honor raised this point about the need for clarity in in a tax deduction and IRS in the statutory reading of tax deductions, there is a learned treatise that describes that as a false notion.
Who are the authors of that “learned treatise”? Why, Justice Scalia and Bryan Garner. The 63rd principle listed makes this exact point:
63. The false notion that tax exemptions— or any other exemptions for that matter— should be strictly construed. …
United States Supreme Court cases often set forth a requirement of a higher-than-normal level of clarity to support an exemption from taxation. This is variously expressed as a rule that “exemptions from taxation are to be construed narrowly,”1 that they must be “unambiguously proved,”2 that they “are not to be implied,”3 and that doubts regarding them “must be resolved against the taxpayer.”4 Yet many Supreme Court cases denying an exemption make no mention of this rule,5 and even some cases granting an exemption ignore it.6
But whatever the worthy or unworthy origins of the rule that exemptions from taxation are to be strictly construed, we agree with the Supreme Court opinions ignoring it.18 Like any other governmental intrusion on property or personal freedom, a tax statute should be given its fair meaning, and this includes a fair interpretation of any exceptions it contains. So when one statutory provision imposes a categorical tax, any exception assertedly imported by another provision must be clear. But it can be clearly implied no less than clearly expressed, and the terms of the exception ought to be reasonably, rather than strictly, construed.
Scalia, Antonin; Garner, Bryan A. (2012-07-05). Scalia and Garner’s Reading Law: The Interpretation of Legal Texts (Kindle Locations 5055-5059). Thomson West. Kindle Edition.
Well played SG, well played.