A divided state Supreme Court sided with the Oklahoma Tax Commission in a dispute over a company’s attempt to claim a capital gains tax deduction.
CDR Systems Corp, which sold all of its assets for about $49.8 million in 2008, had its bid for the tax deduction denied in August 2009 because it was not based in Oklahoma for three years prior to the sale, as required by state law. The deduction would have excluded more than $3.5 million from state taxation.
The Oklahoma Court of Civil Appeals reversed that finding before being overruled Tuesday by the Supreme Court in a narrow 5-4 decision.
CDR Systems’ attorney did not return a call seeking comment on Tuesday, but the tax commission welcomed the ruling.
“We feel the court reached a correct and just result in the case,” spokeswoman Paula Ross said. “We trust this puts an end to the controversy and are happy the decision eliminates any adverse budget results.”
CDR Systems, which manufactured polymer concrete and fiberglass handholds and pads for utility companies, was incorporated in California in 1970, according to court papers.
It was sold to Hubbell Lenoir City Inc. in a stock purchase agreement that was treated as an asset sale under the tax code.
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