TAXATION - BUSINESS SITUS OF INTANGIBLES - ASSETS

Authors

Donald H. Larmee, University of Michigan Law SchoolFollow

Abstract

Defendant holding company, a Delaware corporation, was engaged in a chain banking business in the northwest. It held the stocks of its subsidiaries, the banks, at its business headquarters, which was located in Minnesota. The holding company protested the payment of the Minnesota money and credits tax on stocks of six Montana and two North Dakota subsidiary banks. The holding company argued that it had already paid a tax on the stock to the states in which the banks were incorporated, and that the Minnesota tax thus resulted in double taxation and was contrary to the due process clause of the Fourteenth Amendment. The court held that the tax was valid. The stocks held by the holding company were intangible assets that had acquired a business situs in Minnesota because, by holding these stocks and thus controlling the banks, the holding company had amalgamated a super banking structure. While the court frowned upon the taxation by the domiciliary states of the banks, it pointed out that their action could not deprive Minnesota of her right to tax. State v. First Bank Stock Corp., 197 Minn. 544,267 N. W. 519 (1936).

Recommended Citation

Donald H. Larmee, TAXATION - BUSINESS SITUS OF INTANGIBLES - ASSETS, 35 Mich. L. Rev. 1398 (1937).
Available at: https://repository.law.umich.edu/mlr/vol35/iss8/25