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income tax exemption instead of a credit), “were enacted to
stimulate the creation of jobs and investment in U.S.
possessions, and to provide a tax benefit to taxpayers that
created such jobs and investment.” They urge us to “construe
section 936 in favor of [such] taxpayers” and to “construe
narrowly any limitations on the intended benefits”. Petitioners
further contend that the functions performed by the lease
employees “are properly considered, as a matter of law, to be
functions performed by EAPR in Puerto Rico for purposes of
applying the active trade or business test.” Finally,
petitioners contend that “There are no facts upon which
Petitioners rely that are reasonably in dispute.” Petitioners
further maintain that, even if we were to agree with respondent’s
contentions that certain factual matters are in dispute, these
matters “are not material to a holding by the Court on this issue
[i.e., that EAPR derived income from the active conduct of a
trade or business in Puerto Rico].”
2. Summary of Conclusions
We agree with several of petitioners’ contentions and with
petitioners’ conclusion that their motion for partial summary
judgment on the active-conduct-of-a-trade-or-business issue
should be granted.
The Code does not appear to include a definition of the term
“active conduct of a trade or business” as that term is used in
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