Overnite Transportation Co. v. Commissioner of Revenue

We conclude, in agreement with the Appellate Tax Board, that the appellant corporation, the taxpayer, did not sustain its burden of proving, for purposes of the corporate excise tax, that a promissory note it declared as a dividend in favor of its parent corporation was true indebtedness. The Appellate Tax Board held correctly that the appellant’s claimed “interest” expenses could not be treated as deductions from gross income in respect to the net income measure of the appellant’s tax, nor could the note figure as a liability in calculating the net worth measure.

Narrative. 1. In 1985,…