A taxpayer's corporate acquisition triggered an IRC Sec. 382 limitation of the acquired company's net operating loss carryovers equal to approximately $30 million. The Minnesota Department of Revenue apportioned that limitation using the apportionment ratio of the income years, which reduced the amount of available loss to approximately $120,000. The Minnesota Tax Court found that, despite Department guidance to the contrary, there was no statutory authority for the Department's position to apportion the section 382 limitation.
Additionally, the Tax Court found that the taxpayer was not unitary with one of its LLC subsidiaries because the facts did not support a flow of value, nor was there sufficient control over the subsidiary. [Express Scripts, Inc. v. Commissioner of Revenue, Minnesota Tax Court, Ramsey County, Docket No. 8272R (8/20/12)]