During 2020, the São Paulo State Government issued Decrees No. 65,254 and 65,255, through which several tax benefits related to the ICMS exemption or the reduction of the calculation basis for said tax were revoked.
Many sectors were affected, such as pharmaceuticals, hospitals, used vehicle sales (which affected the insurance sector, due to the sale of salvage vehicles) and agribusiness.
The revocation of the benefits implied a real increase in the tax burden through a simple Decree from the head of the São Paulo Executive, which reestablished normal taxation to sectors that, due to their strategic importance, enjoyed exemption or a reduction in the calculation base that made the effective rate much lower.
When analyzing the issue, the Court of Justice of the State of São Paulo (TJ-SP) understood that the benefits provided for in an interstate agreement, to be valid in a given member state, must be validated by means of a Decree of the Executive Branch of that same member state, so that the same benefits may also be revoked by Executive Decree.
Now, we just have to wait for the Supreme Federal Court (STF) to analyze the issue through ADI 6691.
