Northern States Power Co. v. Commissioner
United States Tax Court
1. Excess Profits -- Abnormal Deductions in Base Period -- Section 711 (b) (1) (J) -- Interest on Late Tax Payments. -- Statutory interest on late tax payments deducted by a public utility in its base period is of a different class of deductions for purposes of section 711 (b) (1) (J) from interest paid and deducted by the utility on its borrowed capital but is not different in class from interest deducted on account of other past due state and Federal tax payments with the…
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1. Excess Profits -- Abnormal Deductions in Base Period -- Section 711 (b) (1) (J) -- Interest on Late Tax Payments. -- Statutory interest on late tax payments deducted by a public utility in its base period is of a different class of deductions for purposes of section 711 (b) (1) (J) from interest paid and deducted by the utility on its borrowed capital but is not different in class from interest deducted on account of other past due state and Federal tax payments with the result that the deduction is not disallowable because abnormal as to class within the meaning of section 711 (b) (1) (J)…
1Opinion of the Court
OPINION.
MuRDOck, Judge:
These petitioners, like most other public utilities, obtained a large part of their working capital by borrowing money for long terms at low rates of interest. These loans are rather permanent investments. It was normal for the petitioners to have large deductions for interest on such borrowings, but in the base year 1938 they had another large interest deduction which was unusual. Tax liabilities for the years 1924 through 1933 were settled and paid, as was interest on those liabilities in the amount of $560,211.09. Thus, they paid an extraordinarily large amount of…
2Cases cited1 opinion
- Walter Motor Truck Co. v. CommissionerUnited States Tax Court · 1951
3Cited by1 opinion
- Northern States Power Co. v. CommissionerUnited States Tax Court · 1952