Hercules Inc. v. Pledger

Tom Glaze, Justice.

Appellant Hercules Inc. is a Delaware corporation doing business in Arkansas, and reports its business income which is subject to the Arkansas Uniform Distribution of Income for Tax Purposes Act (UDITPA) on a calendar year basis. In 1988, appellee Department of Finance & Administration (DF&A) notified Hercules that its 1987 state income tax return was subject to a “desk audit.” On December 7, 1988, Hercules was notified of a proposed deficiency assessment of $346,515 in taxes, $17,326 in penalties, and $14,432 in interest.

Hercules filed a written protest and followed the…