You are here: / / APPELLANTS IMPROPERLY DEDUCTED ROYALTY PAYMENTS RECEIVED FROM FOREIGN AFFILIATE...
,

APPELLANTS IMPROPERLY DEDUCTED ROYALTY PAYMENTS RECEIVED FROM FOREIGN AFFILIATE CORPORATIONS WHICH WERE NOT SUBJECT TO NEW YORK FRANCHISE TAXES (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Cannataro, over a two-judge concurrence, determined the appellant corporations improperly deducted royalty payments received from foreign affiliates not subject to New York’s franchise taxes:

Under a taxation scheme in effect from 2003 through 2013, New York allowed corporations that paid franchise taxes in New York to deduct income received as royalty payments from members of the same corporate group, or family, in calculating their taxable income. The deduction was allowed only if the royalty payment came from a related entity that had already paid a New York tax on the same income through operation of another provision in the Tax Law that required companies to add back royalty payments made to related entities for the purposes of calculating their own taxable income.

In these cases, the state Department of Taxation and Finance determined that appellants improperly deducted royalty payments they received from affiliates in foreign countries that were not subject to New York franchise taxes and, so, were not required to add those payments back on a New York tax return. Appellants challenge the Tribunal’s denial of the deduction as being contrary to the clear language of the statute and as violating the Commerce Clause’s prohibition on discrimination against foreign commerce. Because the Appellate Division correctly interpreted the statutes as permitting a tax deduction only where a related subsidiary was subject to the add back requirement, and because any burden on interstate or foreign commerce created by this tax scheme was incidental and did not violate the dormant Commerce Clause, we affirm. Matter of Matter of Walt Disney Co. & Consol. Subsidiaries v Tax Appeals Trib. of the State of New York, 2024 NY Slip Op 02127, CtApp 4-23-24

Practice Point: Corporations may not deduct royalties received from foreign affiliate corporations which are not subject to New York’s franchise taxes.

 

You might also like
A NUMBER OF GUILTY-PLEA CONVICTIONS REVERSED BECAUSE THE DEFENDANTS WERE TOLD THE WAIVER OF APPEAL WAS AN ABSOLUTE BAR TO APPEAL (CT APP).
EVIDENCE OF PRIOR BAD ACTS BY DEFENDANT PHYSICIAN SHOULD NOT HAVE BEEN ADMITTED IN THIS MEDICAL MALPRACTICE ACTION, PLAINTIFF’S VERDICT REVERSED.
Complaint Pursuant to the “Whistleblower” Statute Need Not Identify the Particular Statute or Regulation Alleged to Have Been Violated by the Employer
Speedy Trial Clock Starts On the Day the People’s Application for Leave to Appeal to the Court of Appeals Is Denied, Notwithstanding Adjournments Granted in the Lower Court
APPEAL FROM LOCAL CRIMINAL COURT NOT PROPERLY TAKEN, THE PROCEEDINGS WERE NOT TRANSCRIBED AND NO AFFIDAVIT OF ERRORS WAS SERVED OR FILED (CT APP).
Plaintiff, Who Fell Through an Open Manhole, Entitled to Summary Judgment on Labor Law 240 (1) Cause of Action—Failure to Set Up Guard Rails Was a Proximate Cause–Liability Imposed Regardless of Plaintiff’s Own Negligence and Regardless of Whether the Owner, Contractor or Agent Supervised or Controlled the Work
PLAINTIFF TRUSTEE’S RESIDENCE IS CALIFORNIA AND THE CAUSES OF ACTION IN THIS RESIDENTIAL-MORTGAGE-BACKED-SECURITIES BREACH OF CONTRACT ACTION THEREFORE ACCRUED IN CALIFORNIA; UNDER NEW YORK’S BORROWING STATUTE, CPLR 202, THE ACTIONS MUST BE DISMISSED BECAUSE THEY ARE UNTIMELY UNDER CALIFORNIA LAW (CT APP).
Tenured Teacher Subject to Discipline Is Entitled to a Hearing Pursuant to Education Law 3020-a Notwithstanding an Alternative Procedure in a Collective Bargaining Agreement

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

FOR-PROFIT NURSING HOMES’ CHALLENGE TO ADJUSTED MEDICAID REIMBURSEMENT... THE TRIAL JUDGE SHOULD HAVE HELD AN INDEPENDENT-SOURCE HEARING BEFORE ALLOWING...