3 Or. Tax 360 | Or. T.C. | 1969
Decision for plaintiff rendered January 29, 1969.
Affirmed 90 Adv Sh 223, ___ P.2d ___ (1970). *361
The defendant disallowed a personal property tax offset against corporate excise taxes claimed by plaintiff in 1964 under the provisions of ORS
The defendant demurred to plaintiff's complaint on the ground that it did not state a cause of suit.
The complaint alleges that Irrigation Equipment Company, Inc. was an Oregon corporation and wholly-owned by the plaintiff, a Delaware corporation. On September 25, 1964, a certificate of merger was issued by the Oregon Corporation Commissioner whereby Irrigation Equipment Company, Inc. was merged into plaintiff. In November, 1964, plaintiff, as the surviving corporation, paid the personal property taxes which had been assessed against Irrigation Equipment Company, Inc. and claimed the amount paid as an offset against its 1964 corporate excise taxes, which claim was disallowed by the defendant commission.
1. ORS
The commission has adopted Reg
*362"* * * In order to qualify for the offset, the corporation must show that it was the legal owner of the personal property and that the taxes were assessed to and paid by it. The offset will be disallowed where the legal entity assessed and the legal entity paying the taxes are different, or where either of these is different from the legal entity claiming the offset." (Emphasis supplied.)
The commission disallowed the claim for the offset for the reason that the plaintiff, who paid the taxes, and Irrigation Equipment Company, Inc., against whom the taxes were assessed, were not the same entity.
The plaintiff contends that the statutory merger of Irrigation Equipment Company, Inc. with the plaintiff resulted in the two entities becoming in effect the same entity. Consequently the taxes were assessed to and paid by "it" as required by ORS
"(4) Such surviving or new corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, as well of a public as of a private nature, of each of the merging or consolidating corporations; * * *
"(5) Such surviving or new corporation shall thenceforth be responsible and liable for all the liabilities and obligations of each of the corporations so merged or consolidated; and any claim existing or action or proceeding pending by or against any of such corporations may be prosecuted as if such merger or consolidation had not taken place, or such surviving or new corporation may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such corporation shall be impaired by such merger or consolidation."
The commission contends that plaintiff's right to claim the offset has been foreclosed by the decision of this court and the Oregon Supreme Court in Bumble *363 Bee Seafoods v. Tax Com.,
2, 3. The distinction between the two cases is that a statutory merger occurred here and did not in Bumble Bee.2
Moreover, the applicability of ORS *364
4. In a case such as this involving a statutory merger the general corporation law, ORS
Prior to the decision in Bumble Bee the tax commission had taken the position that a statutory merger under the general corporation law, ORS
The decision in Bumble Bee cannot be used to deny the offset in this case. Bumble Bee did not involve a statutory merger under ORS
The order of the tax commission is set aside.
*366"* * * It has been established, I think, by the admissions in the pleadings that at this point when Bumble Bee Seafoods purchased the assets of Columbia River Packers by exchanging stock for them, it was not a merger of Columbia River Packers and Bumble Bee Seafoods because, as the complaint and answer show, the Columbia River Packers were subsequently merged in Castle and Cooke, which is a third corporation. If there had of been a merger and the resulting corporation would have been the same corporation, in effect, we wouldn't have this case before the Court. This is a simple case of the purchase of the assets of one corporation by exchange of its stocks by another corporation. It's a different taxable entity under the statute. I think the statute is clear and unambiguous." (Emphasis supplied.)