Monday, February 10, 2014

Supreme Court Grants Transfer on Tax Court's Caterpillar Decision

49S10-1402-TA-79     49T10-0812-TA-70
Caterpillar, Inc. v. Indiana Department of State Revenue
Transfer Granted.
Wentworth, J.

The Tax Court decision at issue addressed the following issues:

The parties dispute whether the deduction of FSDs under the FSD Statute applies when calculating Indiana NOLs under the NOL Statute. The Department claims that Caterpillar was not entitled to deduct its FSDs in calculating its Indiana NOLs because the NOL Statute neither expressly incorporates the FSD Statute nor specifically references deducting FSDs as a modification in Indiana Code § 6-3-1-3.5. (See, e.g., Resp’t Br. Supp. Cross-Mot. Summ. J. at 7-8, 17.) Caterpillar contends,
however, that the method of calculating Indiana NOLs necessarily triggered the statutory deduction of FSDs because its FSD income was included in its adjusted gross income in calculating its Indiana NOL for each of the Loss Years. (See, e.g., Pet’r Br. at 17-19.) To determine whether Caterpillar is entitled to deduct its FSD income in calculating its Indiana NOLs, the Court must answer two questions: 1) is “adjusted gross income” a component of the Indiana NOL Statute and, if so, 2) is Caterpillar’s FSD income included in that adjusted gross income.

The Tax Court decision may be found here: