How Do You Interpret the Last-in-Time Rule?
Boring tax case, interesting international law issue. That’s how I would summarize Jamieson v. CIR. The issue in Jamieson is what happens if a treaty says one thing, a subsequent statute conflicts with that treaty, and then there is a subsequent treaty change to the conflicting treaty provision, but that amendment does not remove the conflict. Under the last-in-time rule which provision prevails? Here is what the U.S. Tax Court ruled:
In 1986, while the U.S.-Canada Convention was in force, Congress amended the AMT imposed on noncorporate taxpayers by section 55 and added section 59 to the Code…. [Thereafter] the U.S.-Canada Convention was amended…. The revised Protocol Amending the Convention… made changes to Article XXIV affecting credits for Social Security tax, corporate tax exemptions, and the tax treatment of dividends, interest, and royalties,… but did not alter the general rule found in article XXIV, paragraph 1. Neither the Third nor the Fourth Protocol references section 59 [the earlier conflicting statutory provision].
It is well established that, where a statute and a treaty pertain to the same subject matter, they must be read so as to give effect to both if at all possible…. If, however, the statute and the treaty conflict, the last-in-time rule requires that “the last expression of the sovereign will … [controls].”…
Applying the last-in-time rule, we hold that section 59(a)(2) is the last expression of the sovereign will and that it takes precedence over the U.S.-Canada Convention to the extent there is a conflict between them. [The statute] makes it very clear that Congress intended the limitation of section 59(a)(2) to supersede existing treaty provisions prohibiting double taxation. The U.S.-Canada Convention was one of those treaties. Neither the Third nor the Fourth Protocol contains any provision clearly indicating that Congress’s intention to ensure that taxpayers with sufficient means should contribute a minimum amount of tax to the United States had been superseded.
So a treaty provision conflicts with a statute, and then that treaty provision is amended without fixing the conflict. Under the last-in-time rule, although the amended treaty provision came later, the failure to address the conflict means that the earlier conflicting statute controls? That logic seems more than a little curious to me. I wonder what others think.