The Delaware Supreme Court upheld a superior court denying a $ 1.7 million state corporation tax claim.
Verisign, which temporarily operated a facility in the New Castle area, reported losses on its 2015 and 2016 tax returns and claimed it had no Delaware tax liability.
Under a state policy, a corporate taxpayer filing federal tax returns with a consolidated group was prohibited from filing a Delaware net operating loss allowance in excess of the consolidated net operating loss allowance on the federal tax return.
Applying the policy, the state found that Verisign had not adequately reported its Delaware revenue and valued the company at $ 1.7 million in unpaid taxes and fees.
The Supreme Court ruling found the directive to be in violation of the state’s constitution.
The Supreme Court did not accept the constitutional argument and instead found that the Finance Director had exceeded the authority granted by the General Assembly.
The court rulings found that the policy was never part of any law.
The Supreme Court decision noted that the General Assembly recently passed a law containing some of the provisions of the Treasury Department’s policy.
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