Opinion ID: 2520907
Heading Depth: 1
Heading Rank: 7

Heading: violation of the kansas and united states constitutions

Text: CIG argued that BOTA's allocation of its unit value violated the Kansas and United State Constitutions. CIG cites the United States Constitution Commerce Clause and Norfolk & W. R. Co. v. Missouri Tax Comm'n, 390 U.S. 317, 19 L. Ed. 2d 1201, 88 S. Ct. 995 (1968). Norfolk considered due process and the Commerce Clause challenges to state taxation of an interstate enterprise. The Court recognized that states could tax the fair share of an interstate transportation enterprise which is permanently or habitually employed in the state, including a portion of the intangible, or `going-concern,' value of the enterprise. 390 U.S. at 323-34. Norfolk recognized that the process of valuating the going-concern value is an elusive concept not susceptible of exact measurement. 390 U.S. at 324. As a consequence, the States have been permitted considerable latitude in devising formulas to measure the value of tangible property located within their borders. [Citation omitted.] Such formulas usually involve a determination of the percentage of the taxpayer's tangible assets situated in the taxing State and the application of this percentage to a figure representing the total going-concern value of the enterprise. 390 U.S. at 324. CIG's basis for the constitutional argument is that BOTA's adoption of the original cost method overstated the fair market value of CIG's Kansas properties by 200%. However, this conclusion assumes that CIG's valuations are correct and that BOTA's conclusions actually overstated CIG's value. Our conclusions above suggest substantial evidence supports BOTA's decision. Further, the record contains evidence that allocation by original cost is a reasonable allocation method reflecting the fair market value of CIG's properties in Kansas. Under these circumstances, we are unable to conclude that CIG's constitutional rights were violated.