Printable Format79-32,141. Allocation of income and deductions. The director may allocate gross income, deductions, credits, or allowances between two or more organizations, trades or businesses (whether or not incorporated, or organized in the United States or affiliated) owned or controlled directly or indirectly by the same interests, if the director determines such allocation is necessary to prevent evasion of taxes or to clearly reflect income of the organizations, trades or businesses.
History: L. 1967, ch. 497, ยง 34; May 12.
Law Review and Bar Journal References:
Similarity to I.R.C. sec. 482 discussed in "The Kansas Conformity Income Tax Act: Part II," Donald L. Cordes, 17 K.L.R. 289, 308, 309 (1969).
CASE ANNOTATIONS
1. Absence in UDITPA of reference to combined report method does not preclude use for unitary business. Pioneer Container Corp. v. Beshears, 235 Kan. 745, 755, 684 P.2d 396 (1984).
2. Filing of consolidated federal income tax return by bank and holding company as not necessitating consolidated state return examined. First Nat'l Bank of Manhattan v. Kansas Dept. of Revenue, 13 Kan. App. 2d 706, 711, 779 P.2d 457 (1989).
3. Order whether multi-state business is unitary for tax purposes examined. In re Tax Appeal of A.M. Castle & Co., 245 Kan. 739, 740, 783 P.2d 1286 (1989).
4. Domestic combination method of calculation not contrary to section. In re Tax Appeal of Morton Thiokol, Inc., 254 Kan. 23, 39, 864 P.2d 1175 (1993).
5. More than 50% ownership is not necessary to demonstrate control in a unitary business relationship. In re Tax Appeal of Panhandle Eastern Pipe Line Co., 272 Kan. 1211, 39 P.3d 21 (2002).
6. BOTA's determination that company's operations are not unitary affirmed; BOTA is paramount taxing authority of state and need not defer to department of revenue's interpretation of a statute. In re Tax Appeal of Nat'l Cooperative Refinery Ass'n, 273 Kan. 500, 44 P.3d 398 (2002).