107 T.C. No. 5
UNITED STATES TAX COURT
TEXASGULF INC. AND SUBSIDIARIES, AS
SUCCESSOR IN INTEREST TO TEXASGULF INC.
AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15528-89. Filed September 9, 1996.
Under the Ontario Mining Tax (OMT), mine operators
are generally liable for a tax on gross receipts less
deductions for several expenses and a processing
allowance. P paid the OMT and claimed a foreign tax
credit under sec. 901, I.R.C.
P and R agree that sec. 1.901-2, Income Tax Regs.,
applies to the years at issue. R concedes that the OMT
is a tax and that it meets realization and gross income
requirements imposed by those regulations but contends
that the OMT does not meet the net income requirement.
Sec. 1.901-2(b)(4), Income Tax Regs.
A foreign tax meets the net income requirement if
it meets any one of three tests. Under one of those
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