Amerada Hess Corp. v. Fong
Tioga Gas Plant, Inc.; Solar
Gas, Inc.; and AH 1980 Program,
Inc., Appellants
v.
State of North Dakota, by and
through its Tax Commissioner,
Cory Fong, Appellee
Judge Donald L. Jorgensen
| Appellant: | Fleck, Mather & Strutz | |
| Appellant: | Lawyer not licensed in N.D. | |
| Appellee: | Robert W. Wirtz , Spec. Asst. Atty. Gen. | |
| Appellee: | Donnita Ann Wald , Spec. Asst. Atty. Gen. |
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1. Whether the Tax Commissioner incorrectly concluded that an amount (commonly referred to as a " 78 dividend" or 78 gross up") which is treated under 78 of the Internal Revenue Code as "a dividend received by [a] domestic corporation from [a] foreign corporation" may be treated as a dividend and included in North Dakota apportionable income but may not be treated as a dividend and partially excluded under the provisions of Section 57-38.4-02(2) of the North Dakota Century Code.
2. Whether the Tax Commissioner incorrectly concluded that a taxpayer which has made a water's edge election must include both the income of an 80/20 subsidiary corporation and dividends distributed from that income in its North Dakota apportionable income notwithstanding the fact that such inclusion results in double taxation.
Appellee's Statement of the Issues:
1. Whether Internal Revenue Code 78 "gross-up" required for federal income tax purposes must be included in the Appellants' ("AHC") taxable income.
2. Whether the dividends from AHOC Abu Dhabi ("AHOC"), an 80/20 corporation, must be included in AHC's taxable income.
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