Northwest Engineering Corp. v. Department of Taxation

The question presented on this appeal is whether there is any evidence that the taxpayer made any transfer of earnings, profits, property, or assets to a customer, of such a character as to be a dividend. It is true that the customer was the owner of the stock in the taxpayer, but this in and of itself does not change gains of the customer made by buying and selling the product of the taxpayer into dividends. There was an adjustment between the taxpayer and the Department of Taxation under which the proper income was accounted for and duly taxed as income.

The department now contends that this…