Department of Revenue v. Agilent TechnologiesAnnotate this Case
Agilent Technologies, Inc. was a Delaware corporation headquartered in California, and was the parent company of a worldwide family of affiliated corporations. Agilent maintains research and development and manufacturing sites in Colorado and is thus subject to Colorado corporate income tax. World Trade, Inc. is a Delaware corporation and a wholly owned subsidiary of Agilent, and existed solely as a holding company. World Trade earned substantial dividends on its shares in its noted subsidiaries, the tax treatment of dividends gave rise to the dispute before the Colorado Supreme Court. Specifically, the issues reduced to: (1) whether the Colorado Department of Revenue and Michael Hartman, in his official capacity as the Executive Director of the Department, could require Agilent to include its holding company, Agilent Technologies World Trade in its Colorado combined income tax returns for the tax years 2000–07; if not, then whether the Department could nevertheless allocate World Trade’s gross income to Agilent in order to avoid abuse and to clearly reflect income. The Colorado Court determined sections 39-22-303(11)–(12), C.R.S. (2018), did not authorize the Department to require Agilent to include World Trade in its combined tax returns for the tax years at issue because World Trade was not an includable C corporation within the meaning of those provisions. As to the second question, the Court likewise concluded the Department could not allocate World Trade’s income to Agilent under section 39-22-303(6) because: (1) that section has been superseded by section 39-22-303(11) as a vehicle for requiring combined reporting for affiliated C corporations; and (2) even if section 39-22-303(6) could apply, on the undisputed facts presented here, no allocation would be necessary to avoid abuse or clearly reflect income.