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Union Pacific Railroad v. State Tax Commission

68 P.2d 1, 145 Kan. 715, 1937 Kan. LEXIS 211
CourtSupreme Court of Kansas
DecidedMay 8, 1937
DocketNo. 32,963
StatusPublished
Cited by21 cases

This text of 68 P.2d 1 (Union Pacific Railroad v. State Tax Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Pacific Railroad v. State Tax Commission, 68 P.2d 1, 145 Kan. 715, 1937 Kan. LEXIS 211 (kan 1937).

Opinion

The opinion of the court was delivered by

Thiele, J.:

This appeal arises under the income tax law as ap[716]*716plied to a corporation whose gross income is derived from property-located and business transacted in part within and in part without the state of Kansas.

The income tax law was enacted in 1933 and the return in question was the first to be made under the act by the appellee, which will be referred to hereafter as the company.

Some time prior to April 25, 1934, the company proposed a method of computing its return under what now appears as G. S. 1935, 79-3219. The proposed computation was based on accounts as kept in accordance with regulations of the interstate commerce commission. The proposal, at least in part, did not meet the approval of the state tax commission, hereafter referred to as the commission, and on April 25, 1934, it sent the company a corrected statement concerning the method of allocation to be used by it in making its return. We need not notice the details of the methods suggested, further than to state they provided for direct allocation of many items of revenue and of cost of operation. On July 13, 1934, the company made a return which the commission did not approve for the asserted reason the prescribed allocation method had been disregarded. On August 4, 1934, the company made a return on the prescribed method, but protesting, in part, its correctness. The return as made, however, showed no tax due. The commission, using the same return of information, allocated to the company in Kansas a greater amount of income and a lesser amount of deductions, and found the tax due, without interest, to be $45,-964.'29. Thereafter, the company requested a hearing on the tax thus determined, and as a result the commission made its order of April 19, 1935, in which it concluded the original return did not truly reflect income justly allocable to Kansas for the reason it allocated no portion of its taxable interest and dividend income, while it did allocate a part, of the total interest paid by it, and that in its opinion related items of income and expense must be allocated on the same basis in order to truly reflect Kansas net income. These items will be referred to later. After stating the company conceded its Kansas income could not be directly allocated on its books in accordance with G. S. 1935, 79-3217, it was stated the formula prescribed in G. S. 1935, 79-3218, or in the alternative in 79-3219, must be followed. The order then continues:

“In the opinion of this commission, the taxpayer’s income should be allocated in accordance with the provisions of section 79-3218 of the Revised Statutes, 1933 Supplement, as follows:

[717]*717

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Bluebook (online)
68 P.2d 1, 145 Kan. 715, 1937 Kan. LEXIS 211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-pacific-railroad-v-state-tax-commission-kan-1937.