Opinion ID: 578700
Heading Depth: 2
Heading Rank: 4

Heading: TLTG's Integral Part Argument

Text: 27 TLTG argues alternatively that it should be classified as a political subdivision because it is an integral part of its member school districts, which, as the Government concedes, are political subdivisions. TLTG cites several cases in which courts have held that a division of a larger entity was entitled to share the tax-exempt status of the larger entity because the division was an integral part of the larger entity. It is true that an integral part of a larger entity is entitled to share in the larger entity's tax-exempt status. See, Hospital Bureau of Standards and Supplies v. United States, 158 F.Supp. 560, 141 Ct.Cl. 91 (1958); Estate of Philip R. Thayer v. Commissioner, 24 T.C. 384 (1955); Squire v. Students Book Corp., 191 F.2d 1018 (9th Cir.1951). It is not true, however, that TLTG is an integral part of a political subdivision. The most that can be said for TLTG in this connection is that it may be integrally related to several political subdivisions. Such a relationship does not automatically entitle the integrally related entity to be classified as a political subdivision. 28 The courts have consistently recognized that political subdivision status requires a delegation of sovereign authority. See, Shamberg, 144 F.2d 998; White, 144 F.2d 1019; Seagrave, 38 T.C. 247. To apply the integral part cases in this context would completely circumvent the requirement of sovereign authority for political subdivision status. To bestow political subdivision status on an entity, merely because it is an integral part of a political subdivision, would bypass the requirement that a political subdivision must be authorized to exercise some sovereign power. We refuse to throw out the sovereign power requirement for political subdivision status. Therefore, we find the integral part cases inapplicable to a determination of political subdivision status.