Quantcast

LEGAL NEWSLINE

Thursday, March 28, 2024

Liquidations not taxable as business income: SC

Justice Ronnie White

JEFFERSON CITY -- Returns from the sale and liquidation of a company are not considered "business income" and therefore not subject to business income taxation, the Missouri Supreme Court ruled today. In the case of ABB C-E Nuclear Power, Inc. vs. Missouri Director of Revenue (# SC87811), the Court upheld a decision by the Administrative Hearing Commission (AHC) that proceeds of the sale of ABB are not business income. That decision overturned an earlier ruling by the Director of Revenue, which had also assessed ABB a tax-deficiency notice of $1.8 million. The director subsequently appealed to the Supreme Court. The Supreme Court based its decision on what defines "business income" in the state, ruling that proceeds from the sale failed two key tests. These are that the proceeds must derive either from the taxpayer's regular business transactions or regular integral business activity. "The AHC correctly determined that the proceeds of the sale of ABB do not constitute business income under either test," wrote Justice Ronnie L. White in the Supreme Court's unanimous opinion.

ORGANIZATIONS IN THIS STORY

More News