Louisiana can tax income earned by non-resident corporation

Last June, we reported that the Louisiana Supreme Court granted writs in Bridges v. Autozone Properties, Inc. Today, the Court handed down its decision.

The case concerns Autozone's attempt to use a pass-through corporate entity to shield rental income paid by a subsidiary to the pass-through, which in turn paid the income, in the form of dividends, to a non-resident corporation. The issue: does Louisiana have taxing jurisdiction over the non-resident beneficiary corporation, which received benefits from corporate affiliates doing business in Louisiana? The Supreme Court answers "yes." "Since the taxing jurisdiction, Louisiana, has helped to create the income, it should not be prevented from assessing a constitutionally permissible share of those gains in the form of income taxes for the support of the government." Slip op. at 36.

Posted by RPW at March 24, 2005 05:47 PM