Tax Law

Johnson Controls v. Miller, 2010 U.S. LEXIS 4206 (U.S., May 24, 2010)

The U.S. Supreme Court denied the petition for certiorari by Johnson Controls, Inc., pursuant to the 2009 decision of the Kentucky Supreme Court, upholding the constitutionality, and retroactive application, of the state's statutory prohibition against filing unitary returns.  Johnson Controls, Inc. v. Miller, 2010 U.S. LEXIS 4206 (U.S. May 24, 2010). The following recounts background events.


Corporations had originally filed separate state tax returns. After a ruling that related corporations could file a combined tax return under the unitary business concept, the corporations substituted combined returns. Because they owed less tax under this approach and would be entitled to tax refunds and because the adoption of this practice by a multitude of related corporations would result in significant revenue loss to the state, the legislature amended Ky. Rev. Stat. Ann. §§ 141.120 and 141.200 to bar combined returns and to deny refunds for amended combined returns. The corporations challenged the amendments, arguing that they were deprived of a vested property interest in the tax refunds. On review, the court held that, because the amendments made to the Kentucky tax code were made to clarify the law regarding combined returns under the unitary business plan and to exercise the legislature's revenue raising power, the amendments furthered a legitimate government interests and were rationally related to that purpose. As such, the corporations' due process rights were not affected by the amendments' retroactive application, and they were not entitled to refunds. subscribers can access the enhanced version of Miller v. Johnson Controls, Inc., 2009 Ky. LEXIS 196 (Ky. Aug. 27, 2009).

Non-subscribers can access Federal Case Law, Codes, Shepard’s®, Citations, Administrative, Legislative, and Secondary Sources using LexisONE's Research Value Package. subscribers cna view further discussion at 1-3 Bender's State Taxation: Principles and Practice § 3.05 and 1-3 Bender's State Taxation: Principles and Practice § 3.12.

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View commentary by Erica Horn of Stites & Harbison PLLC on Broken Promises - The Decision of the Kentucky Supreme Court in Miller v. Johnson Controls.