In re the Appeal of Lee Apparel Co.

Green, J.:

This appeal arises out of the audit conducted by the Kansas Department of Revenue (the Department) on Lee Apparel Company, Inc. (Lee), Troutman Industries, Inc. (Troutman), and Blue Bell, Inc. (Blue Bell), collectively referred to as the taxpayers, for calendar years 1988 through 1990. As a result of its audit, the Department determined that the taxpayers, together with their parent company VF Corporation (VF), and VF’s numerous other subsidiaries, were engaged in a unitary business and should have determined their Kansas income tax liabilities using the combined report method. The…