ILNews

Justices reverse Tax Court ruling favoring Caterpillar

Back to TopCommentsE-mailPrintBookmark and Share

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.



 
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

ADVERTISEMENT