Court Opinion

ID: 9548548
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:05:14.102824+00
Date Added: 2024-06-11T15:19:06.947247
License: Public Domain

JOHNSON, Justice,
dissenting.
I respectfully dissent. In my view, the Court’s opinion incorrectly applies Futura and should have applied Kopp.
Futura does not dictate that the interest income the Richards received from IFI was income derived from sources within Idaho. Futura dealt with dividend income received by one corporation from another corporation. Dividends are the result of earnings of a corporation. Futura says this when it states that “ ‘sources’ when used in statutes dealing with ... dividend income from the non-qualifying corporation — has reference ... to the location of the business activities wherein these earnings were derived.” 92 Idaho at 290, 442 P.2d at 176 (emphasis added). When dividends are concerned, the location of the business activities where the earnings represented by the dividends were derived is the appropriate means to determine source. That is the holding of Futura. In the present case, the origin of the funds by which IFI paid interest to the Richards does not determine the “source” of the payment. The Court’s logic in the present case would make the result depend on whether the corporation had earnings, or whether the interest was *482paid out of other funds the corporation borrowed or from other funds resulting from the sale of assets at a loss.
In Kopp, the Court said:
The doctrine of mobilia sequuntur personam generally applies, for purposes of taxation, to intangible personal property. Such personal property ordinarily follows the person and has its taxable situs at the domicile of the owner. Only when such personal property has acquired a “business situs” foreign to the owner’s domicile, by becoming an integral part of a business of the owner there carried on, does it assume a taxable situs in the foreign jurisdiction.
79 Idaho at 164, 313 P.2d at 326 (citations omitted). The fact that the Court in Kopp did adopt the mobilia sequuntur personam doctrine is verified by the decision of the Court in John Hancock Mutual Life Insurance Co. v. Neill, 79 Idaho 385, 319 P.2d 195 (1957), issued less than six months following Kopp. Justices Smith, Taylor, and McQuade, who formed the majority in Kopp, were also in the majority in John Hancock, where the Court said: “Kopp v. Baird ... involved an excise tax levied upon income of an individual, not a corporate franchise tax. For that reason we held the doctrine [of mobilia sequuntur personam ] applicable in the Kopp case.” John Hancock, 79 Idaho at 404, 319 P.2d at 205.
In my view, TTX does not undermine the ruling in Kopp applying mobilia sequuntur personam. TTX focused on the “business situs” aspect of Kopp, not mobilia sequuntur personam.
TROUT, C.J., concurs.