The New York State Tax Appeals Tribunal affirmed the determination of an Administrative Law Judge that IT USA, Inc. and a sister corporation properly filed combined Corporation Franchise Tax returns with their common parent. The Tribunal concluded that the common parent and the subsidiaries were unitary as functionally integrated wholesalers of clothing that operated with centralized management. The Tribunal further concluded that the "provision of management, corporate, administrative, and logistical services ... at cost resulted in distortion" that supported combination, even though there was no claim of substantial intercorporate transactions among the companies.
The Tribunal's decision is not appealable by the State and, therefore, is final.
Additional details about the decision will be provided in the next issue of New York Tax Insights.
Click here to read the Tribunal's April 16, 2014, decision.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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