Court Opinion

ID: 9584496
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:48:54.5266+00
Date Added: 2024-06-11T15:08:00.764606
License: Public Domain

PRATT, Chief Justice
(concurring in part).
In view of previous decisions of this court and the Federal decision cited in the prevailing opinion, upon the sub*159ject of including subsidies as part of the tax base, I concur with the prevailing opinion’s disposal of that alleged error. I also believe that the New Park Mining Company-case (cited) disposes of the federal tax issue.
Upon the issues of allocation of income to the state, and depletion, I submit the following:
The legislature of this state has established a formula for allocation of net income to this state where the corporation does business outside of this state. Section 80— 13 — 21, U. C. A. 1943. Paragraph 8 of that section provides that if, in the judgment of the Commission, the application of this formula “does not” allocate to this state the proportion of net income fairly and equitably attributable to this state, the Commission may make such allocation as will be fairly calculated to assign to this state a part of net income reasonably attributable to business done in this state. We have decided that the Commission “should” follow the legislative formula, unless it fails to accomplish the purpose of the formula. (See quotations from California Packing Company v. State Tax Commission, cited in the prevailing opinion.)
With such a foundation upon which to act, neither the Commission nor this court should reject the formula because of the laborious task possibly attendant upon its application. Paragraph 8 of Section 80 — 13—21, U. C. A. 1943, does not say that the Commission may select its own method of procedure, if by reason of the size of the company or the ramifications of its business the task of applying the formula “may” or “might be” insurmountable. To attack the application of the formula upon possibilities of complications in that application is, in effect, to attack the formula for its inherent deficiencies, and the remedy for that lies with the legislature, not with the Commission, nor with the court. Paragraph 8 says the Commission may act on its own formula if the legislative form*160ula “does not" allocate properly, not because under possible future contingencies it “might not” make a proper allocation. This distinction becomes important upon a review such as this for this reason:
If we measure the Commission’s action only by possibilities, then the review becomes almost useless, as many very logical future possibilities may be imagined. On the other hand, if their action is measured by actual results, then, upon review the court may have something specific to look at to see if there is a reasonable foundation for the Commission to conclude that the application of the formula “does not” make a proper allocation — and incidently, if it be the fact, the mere increase in the amount of tax the state may collect, would not be sufficient foundation for the Commission to reject the legislative formula.
Under Section 80 — 13—47, this court in reviewing the decision of the Commission, may consider both law and fact. In the present case, to uphold the Commission on the theory propounded by paragraph 8 of Section 80 — 13 —21, the court shall be able to find in the record facts that are probative of the inefficacy of applying the formula to this corporation. It is only by measuring the Commission’s action in the light of those facts that we may determine whether or not their action was an abuse of discretion. I am having difficulty putting my finger on those facts in view of the weight given to abstract principles in the arguments.
As to the company having made a selection of the method of estimating depletion under Section 80 — 13—8, U. C. A. 1943, I have only this to say: what the parties have agreed to in settlement of previous controversies should not bind one party if it did not the other. The rejection by the Commission of its previous stand in the matter should throw the door open to the company making a selection as contemplated by the section of the code involved.