Tax Law

Much Ado About Nothing! Colorado Supreme Court Holds that Holding Companies with No Property or Employees are Not Includable in a Combined Group

The Colorado Supreme Court issued two decisions simultaneously holding that neither Oracle Corporation nor Agilent Technologies, Inc. were required to include in their combined income tax returns holding companies that did not meet the statutory definition of an “includable C corporation.” To be included in a combined return in Colorado, an affiliate must have more than twenty percent property and payroll in the United States. Because neither holding company owned property nor had employees, the holding companies were not includable in the combined returns of their affiliates. Further, the court held that an allocation of the holding companies’ income to the respective combined returns of Oracle and Agilent was not necessary to avoid abuse.

Dep’t of Rev. v. Agilent Technologies, No. 2019 CO 41 (Colo. 2019)