States Warn Top Court That Ruling Against Tax May ‘Sow Chaos’

The US Supreme Court should uphold a 2017 tax provision to avoid destabilizing state tax systems and inciting years of refunds, Democratic attorneys general said in an amicus brief filed Monday.

Attorneys general from 16 states and the District of Columbia responded directly to a brief filed by GOP officials last month, which argues that the foreign earnings tax harms their economies and undermines traditional state tax powers. The Democratic officials said the opposite, arguing the law’s only effect is to preclude permanent tax avoidance.

“Analysts across the ideological spectrum have nonetheless expressed concern that this Court could inadvertently ...