BLUE BELL CREAMERIES, L.P. v. LOREN CHUMLEY, COMMISSIONER DEPARTMENT OF REVENUE, STATE OF TENNESSEE (Tenn. Ct. App. September 30, 2009)
The Tennessee Department of Revenue assessed an excise tax on a nondomiciliary subsidiary corporation which conducted business in the state based on income earned outside the state as a result of the parent corporation's redemption of outstanding stock held by the subsidiary. The Department's tax assessment was based on a determination that the income was taxable as "business earnings" under the Tennessee Excise Tax Law. The trial court found that the subsidiary and its parent corporation were not part of a unitary business relationship and, consequently, that the tax assessment was unconstitutional. Finding that the entities were not part of a unitary business relationship, the judgment of the trial court is affirmed.
Opinion may be found at: