The Charles Schwab Corporation and Subsidiaries - Page 15

                                       - 15 -                                         
          23042(a) (West 2004).  In that regard, petitioner did business in           
          California and was obligated for and paid franchise taxes for all           
          periods under consideration.  Clearly, section 461(d) was not               
          intended to deny a taxpayer a deduction for any period in which             
          it was obligated for and paid a deductible State tax.                       
               Because we have held that section 461(d) was triggered by              
          the 1972 law, it follows that taxpayers would not be entitled to            
          accelerate the franchise tax accrual by treating the taxable year           
          and the measuring year as one and the same.  It also follows that           
          the year of the imposition of the tax remains the same (in this             
          case 1989) and the amount of tax is based on the preceding or               
          measuring year (in this case 1988).                                         
               Accordingly, we agree that respondent’s trial and briefing             
          position that petitioner was not entitled to $932,979 for 1989              
          was in error.  The allowance of a $932,979 deduction for the                
          short year 1988 by this Court in Schwab I did not preclude a                
          deduction for 1989 Federal income tax purposes in that same                 
               Upon reflection and considering the parties’ positions, we             
          hold that petitioner is entitled to a $932,979 California                   
          franchise tax deduction for its 1989 Federal tax year.  To the              
          extent that our Opinion in Schwab II holds otherwise, it is                 

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011