Brief of Tax Law Professors as Amici Curiae in Support of the Department of Revenue of the State of Colorado in Department of Revenue of the State of Colorado v. Agilent Technologies, Inc.

34 Pages Posted: 26 Sep 2018 Last revised: 20 Feb 2019

See all articles by Hayes Holderness

Hayes Holderness

University of Richmond - School of Law

Darien Shanske

University of California, Davis - School of Law

David Gamage

Indiana University Maurer School of Law

Date Written: August 13, 2018

Abstract

Amici write to address specific matters of tax policy and history raised by this case. In particular, amici address 1) the history and justification for water’s edge combined reporting (the “water’s edge method”) and 2) the history and justification for the remedial provisions that are uniformly part of state corporate income taxes.

As to the first issue, amici emphasize that the water’s edge method represents a deviation from sound tax policy arrived at as a political compromise between states, the federal government, and foreign entities. As such, the method should reflect the terms of that compromise and not be expanded to exclude a U.S.-based entity with no foreign activities — such as the subsidiary at issue in this case — from its unitary business’ combined reporting group.

As to the second issue, amici write to explain that state remedial provisions, as a matter of policy, exist to ensure that deviations from sound tax policy required to make a tax system administrable are not permitted to significantly harm the state tax base. In this case, the taxpayer relies on a technical reading of Colorado’s tax laws to exclude a domestic member of its unitary business from its Colorado combined group. That reading, if correct, would visit substantial harm on the Colorado corporate income tax base, making this case a strong candidate for application of the state’s remedial provisions.

Keywords: Amicus Brief, Colorado Supreme Court, Worldwide Combined Reporting, Water’s Edge Election, Department v. Agilent Technologies, Inc.

JEL Classification: K34

Suggested Citation

Holderness, Hayes and Shanske, Darien and Gamage, David, Brief of Tax Law Professors as Amici Curiae in Support of the Department of Revenue of the State of Colorado in Department of Revenue of the State of Colorado v. Agilent Technologies, Inc. (August 13, 2018). Available at SSRN: https://ssrn.com/abstract=3244660 or http://dx.doi.org/10.2139/ssrn.3244660

Hayes Holderness (Contact Author)

University of Richmond - School of Law ( email )

28 Westhampton Way
Richmond, VA 23173
United States

Darien Shanske

University of California, Davis - School of Law ( email )

400 Mrak Hall Dr
Davis, CA CA 95616-5201

David Gamage

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

HOME PAGE: http://www.law.indiana.edu/about/people/bio.php?name=gamage-david

Register to save articles to
your library

Register

Paper statistics

Downloads
49
Abstract Views
416
PlumX Metrics