ILNews

Justices reverse Tax Court ruling favoring Caterpillar

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The Indiana Supreme Court Monday reversed a Tax Court ruling that favored Caterpillar Inc., holding the company could not deduct foreign-source dividend income when calculating its net operating losses for the years 2000 through 2003 for Indiana tax purposes.

The Indiana Department of Revenue rejected Caterpillar’s foreign-source dividend deduction and reduced its net operating loss by about $8.3 million. The company appealed to the Indiana Tax Court, where it prevailed. http://www.theindianalawyer.com/judge-rules-in-favor-of-caterpillar-in-tax-deduction-dispute/PARAMS/article/31095 The department then appealed.

“At its core, the resolution of this case is straightforward: The Indiana (net operating loss) statute does not reference or incorporate the  foreign source dividend deduction, and the Tax Court clearly erred in holding that it did,” Loretta Rush wrote in her first opinion as chief justice, Indiana Department of State Revenue v. Caterpillar, Inc., 49S10-1402-TA-79.

“The Department correctly recognized that the Indiana tax statutes did not authorize Caterpillar to include foreign source dividend income in its Indiana NOL calculation. We also conclude that Caterpillar has not met its burden to show the Indiana tax statutes unconstitutionally discriminate against foreign commerce,” Rush wrote for the unanimous court.

The case was remanded to the Tax Court with instructions that summary judgment be entered on behalf of the Department of Revenue and denied to Caterpillar.

The court in a footnote said the department argued that allowing the Tax Court ruling to stand would produce millions of dollars in lost revenue for the state. However, the court granted Caterpillar’s motion to strike an affidavit that confirmed the precise magnitude of the fiscal impact because it was not designated as evidence before the Tax Court. Therefore, the Supreme Court could not rely on it when reviewing the Tax Court’s decision.

"(W)e hold that the Tax Court clearly erred when it adopted a false symmetry between Indiana (adjusted gross income) and Indiana NOLs, and we decline Caterpillar’s effort to apply the foreign source dividend deduction to its NOL calculations," the court held.



 
 

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  1. Paul Ogden doing a fine job of remembering his peer Gary Welsh with the post below and a call for an Indy gettogether to celebrate Gary .... http://www.ogdenonpolitics.com/2016/05/indiana-loses-citizen-journalist-giant.html Castaways of Indiana, unite!

  2. It's unfortunate that someone has attempted to hijack the comments to promote his own business. This is not an article discussing the means of preserving the record; no matter how it's accomplished, ethics and impartiality are paramount concerns. When a party to litigation contracts directly with a reporting firm, it creates, at the very least, the appearance of a conflict of interest. Court reporters, attorneys and judges are officers of the court and must abide by court rules as well as state and federal laws. Parties to litigation have no such ethical responsibilities. Would we accept insurance companies contracting with judges? This practice effectively shifts costs to the party who can least afford it while reducing costs for the party with the most resources. The success of our justice system depends on equal access for all, not just for those who have the deepest pockets.

  3. As a licensed court reporter in California, I have to say that I'm sure that at some point we will be replaced by speech recognition. However, from what I've seen of it so far, it's a lot farther away than three years. It doesn't sound like Mr. Hubbard has ever sat in a courtroom or a deposition room where testimony is being given. Not all procedures are the same, and often they become quite heated with the ends of question and beginning of answers overlapping. The human mind can discern the words to a certain extent in those cases, but I doubt very much that a computer can yet. There is also the issue of very heavy accents and mumbling. People speak very fast nowadays, and in order to do that, they generally slur everything together, they drop or swallow words like "the" and "and." Voice recognition might be able to produce some form of a transcript, but I'd be very surprised if it produces an accurate or verbatim transcript, as is required in the legal world.

  4. Really enjoyed the profile. Congratulations to Craig on living the dream, and kudos to the pros who got involved to help him realize the vision.

  5. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

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