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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
headquarters.
8It is not necessary for us to determine in this case
whether a taxpayer must have international affiliates to have a
(continued...)
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Last modified: May 25, 2011