In Re Appeal of the Kroger Co.

The opinion of the court was delivered by

LOCKETT, J:

Multistate taxpayer appeals the Board of Tax Appeals’ (BOTA) order disallowing as an apportionable business expense an interest expense incurred to fight a hostile takeover. BOTA classified the expense as a nonbusiness expense, which was allocated to the taxpayer s state of commercial domicile. Taxpayer appealed, claiming its interest expense was a business expense, apportionable to Kansas.

The taxpayer, The Kroger Co. (Kroger), and the Department of Revenue (KDR) stipulated that late in 1988, Kroger, an Ohio corporation operating retail food…