Payless Cashways, Inc. and Its Subsidiaries - Page 13

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          manufacturer or vendor or through foreign independent purchasing            
          agents in these relative quantities is a strong indicator of                
          substantial international operations.7  Nor do we find the fact             
          that lending institutions with international operations                     
          participated in Payless’ corporate borrowing program supports a             
          finding that Payless had international operations.                          
               Finally, while the words of the transition rule “such                  
          buildings are to serve as world headquarters”, are prospective,             
          we find nothing in the provision itself or the legislative                  
          history that would indicate that those words should be read so              
          that they include a building becoming a “world headquarters” at             
          some indeterminate time in the future.  Assuming without deciding           
          that the Mexican joint venture would have justified a                       
          classification of Two Pershing Square as Payless’ world                     
          headquarters in 1993-95, we find the joint venture in 1993-95 to            
          be too remote in time to be relevant to the tax year in question.           
          We are of the opinion that the words “are to serve”, while                  
          prospective, more naturally describe the intended function of the           
          building when first occupied by the original lessee or sometime             
          shortly thereafter.8                                                        

               7The fact that certain Payless employees sometimes traveled            
          outside the United States to facilitate these purchases, when               
          viewed alone or with the other facts petitioner relies on, is not           
          sufficient to transform Two Pershing Square into a world                    
               8It is not necessary for us to determine in this case                  
          whether a taxpayer must have international affiliates to have a             

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Last modified: May 25, 2011