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Yet Mr. Evans and Mr. Catania co-authored the Tax Clarity Act of 2000 to remove the exemption.

Mr. Gandhi reversed course in 2007 with a policy decision based on a private letter case — a taxpayer’s request for guidance — that taxed only the additional amount.

“Why did it take us so long to figure this out?” Mr. Evans said, noting it took about six years. “If it were a month, no one would have cared.”

Mr. Catania called the 2007 policy change a “frolic and detour” that caused confusion, noting the council and some members of the real estate industry did not know about the changes.

He also aired frustrations with an opinion by Mr. Nathan, which said Mr. Gandhi was entitled to latitude as an agency head.

Mr. Catania said that kind of breathing room is “utterly ridiculous” in light of the “plain meaning” of the law passed in 2001.

“What happened thereafter is just a colossal comedy of errors,” Mr. Catania said. “And I don’t blame the real estate industry being down here opposed to the broader tax.”