Gore Enter. Holdings, Inc. v. Comptroller of Treasury

In 2006, the Comptroller of Maryland issued assessments of tax and interest against Petitioners, two out-of-state subsidiary corporations, based on Petitioners’ relationship with their Maryland parent, Petitioners’ substance as corporations, and all of the entities’ activity in Maryland. The tax court affirmed. Petitioners appealed, arguing, among other things, that Maryland did not have the authority to tax Petitioners because they did not have a sufficient nexus with Maryland for the Comptroller’s assessment of taxes to be constitutional. The court of special appeals upheld the Comptroller’s assessments. The Supreme Court affirmed, holding that the tax court did not err in (1) concluding that the Comptroller had authority to tax Petitioners under the Court’s holding in Comptroller of the Treasury v. SYL, Inc., which allows the Comptroller and tax court to find nexus when a subsidiary lacks economic substance, because Petitioners did not have economic substance as separate business entities; and (2) upholding the apportionment formula used by the Comptroller in its assessment of Petitioners. View "Gore Enter. Holdings, Inc. v. Comptroller of Treasury" on Justia Law