Oregon-Washington Plywood Co. v. State Tax Commission

Edward H. Howell, Judge.

Plaintiff’s corporate predecessor obtained loans at ten percent interest from Heller & Company. The money borrowed was later loaned to a third corporation without interest. The defendant State Tax Commission disallowed a deduction of the interest and plaintiff appealed to this court.

OES 317.260 generally allows a deduction of all interest paid on indebtedness during the taxable year.

The statute is broad and has no qualifications. However, the defendant State Tax Commission’s Eegulation 7.260 provides “* * * interest paid on money borrowed by a corporation and used for…