Northern Natural Gas Co. v. Commissioner of Revenue

Todd, Justice.

Northern Natural Gas Company (Northern) filed a consolidated Federal income tax return for the tax years in question. Northern and each of its subsidiaries prepared their own separate tax returns. The subsidiaries forwarded their returns to Northern, together with a check payable to Northern in, an amount equal to the tax due if the subsidiary had filed separately. Some of the subsidiaries incurred losses which had the effect of reducing the overall tax liability on the consolidated tax return. Therefore, the payments received by Northern from its subsidiaries, when added…