Kentuky Tax Commission v. American Tobacco Co.

CULLEN, Commissioner.

The circuit court held invalid a formula prescribed by the Department of Revenue for the allocation between Kentucky and other states, for income tax purposes, of the business income of The American Tobacco Company and other similar tobacco companies. The Kentucky Tax Commission has appealed.

In 1962 the controlling statutes were amended. We are concerned here with years prior to 1962, and our references to *591statutes will be to their provisions prior to the 1962 amendments.

Under KRS 141.120(4) (b) a three-factor formula was prescribed for allocation of business income of a…