§ 105-264. Effect of Secretary's interpretation of revenue laws.
§ 105‑264. Effect ofSecretary's interpretation of revenue laws.
(a) Interpretation. Itis the duty of the Secretary to interpret all laws administered by theSecretary. The Secretary's interpretation of these laws shall be consistentwith the applicable rules. An interpretation by the Secretary is prima faciecorrect. When the Secretary interprets a law by adopting a rule or publishing abulletin or directive on the law, the interpretation is a protection to theofficers and taxpayers affected by the interpretation, and taxpayers areentitled to rely upon the interpretation. If the Secretary changes aninterpretation, a taxpayer who relied on it before it was changed is not liablefor any penalty or additional assessment on any tax that accrued before theinterpretation was changed and was not paid by reason of reliance upon theinterpretation.
(b) Advice. If ataxpayer requests specific advice from the Department and receives erroneousadvice in response, the taxpayer is not liable for any penalty or additionalassessment attributable to the erroneous advice furnished by the Department tothe extent that the following conditions are all satisfied:
(1) The advice wasreasonably relied upon by the taxpayer.
(2) The penalty oradditional assessment did not result from the taxpayer's failure to provideadequate or accurate information.
(3) The Departmentprovided the advice in writing or the Department's records establish that theDepartment provided erroneous verbal advice.
(c) RevisedInterpretations. This section does not prevent the Secretary from changing aninterpretation and it does not prevent a change in an interpretation fromapplying on and after the effective date of the change. (1939, c. 158, s. 933; 1955,c. 1350, s. 4; 1957, c. 1340, s. 14; 1973, c. 476, s. 193; 1991, c. 45, s. 29;1993, c. 532, s. 9; 1998‑98, s. 21; 2008‑107, s. 28.16(e).)