The Georgia Chemistry Council, Inc. “GCC”, a trade association representing 22 companies in the bio-tech industry, filed a declaratory judgment action against the Georgia Department of Revenue “GDOR” to challenge the validity of a regulation1 which interprets the research tax credit codified in OCGA § 48-7-40.12 “the statute”. The statute allows a tax credit of 10 percent of the amount by which a qualified taxpayer’s research expenditures exceed a “base amount,” which is defined as “the product of a business enterprise’s Georgia taxable net income in the current taxable year and the average of the ratios of its aggregate qualified research expenses to Georgia taxable net income for the preceding three taxable years or 0.300, whichever is less.”2 The regulation requires that, in order to be eligible for the tax credit, a business enterprise must have had positive Georgia taxable net income for each of the preceding three years. Ruling on cross-motions for summary judgment, the trial court declared the regulation invalid on the ground that it exceeded the scope of the authority of the statute upon which it was predicated.3 GDOR appeals. We reverse for the reasons set forth below. “The test of the validity of an administrative rule is twofold: whether it is authorized by statute and whether it is reasonable.”4 To determine whether the regulation at issue is authorized by the statute upon which it is predicated necessitates an understanding of the statute. We apply the appropriate rules of statutory construction to assist in this process. The cardinal rule of statutory construction is to ascertain the legislative intent and purpose in enacting the law and to construe the statute to effectuate that intent. Further, where statutory provisions are ambiguous, courts should give great weight to the interpretation adopted by the administrative agency charged with enforcing the statute. Although this Court is “not bound to blindly follow” an agency’s interpretation, we defer to an agency’s interpretation when it reflects the meaning of the statute and comports with legislative intent.5 The Revenue Commissioner has explicit authority to promulgate regulations “for the enforcement of the Public Revenue Code and the collection of revenues thereunder.”6
All duly enacted regulations carry a presumption of validity. Courts should defer to the agency in matters involving the interpretation of the statutes which it is empowered to enforce. The courts give great deference to executive agencies’ policy decisions, because executive agencies provide a “high level of expertise and an opportunity for specialization unavailable in the judicial or legislative branches” that enables such agencies to “make rules and enforce them in fashioning solutions to very complex problems.”7 The regulation interprets the statute as follows:
