DEPARTMENT OF REVENUE of the State of Colorado; and Michael Hartman, in his official capacity as the Executive Director of the Department of Revenue of the State of Colorado, Petitioners,
v.
ORACLE CORPORATION and subsidiaries, Respondent.
Certiorari to the Colorado Court of Appeals, Court of Appeals
Case No. 16CA1316
Attorneys
for Petitioners: Philip J. Weiser, Attorney General, Terence
C. Gill, First Assistant Attorney General, Noah C. Patterson,
Senior Assistant Attorney General, Denver, Colorado
Attorneys
for Respondent: Silverstein & Pomerantz LLP, Neil I.
Pomerantz, Mark E. Medina, Michelle Bush, Denver, Colorado
Attorneys
for Amicus Curiae Colorado Association of Commerce and
Industry: The Poe Law Office LLC, Alan Poe, Rachel Poe,
Centennial, Colorado
Attorneys
for Amicus Curiae Council on State Taxation: Holland & Hart
LLP, Christina F. Gomez, Jonathan S. Bender, Denver, Colorado
Attorneys
for Amicus Curiae Multistate Tax Commission: Ruegsegger
Simons Smith & Stern, LLC, Anthony E. Derwinski, Jeffrey C.
Staudenmayer, Denver, Colorado, Bruce Fort, Washington,
District of Columbia
Attorney
for Amici Curiae Professors David Gamage, Hayes Holderness,
and Darien Shanske: Isaac L. Lodico, Denver, Colorado
OPINION
GABRIEL,
JUSTICE
Page 1022
[¶1]
This case, like Department of Revenue v. Agilent
Technologies, Inc., 2019 CO 41, 441 P.3d 1012, which we
are also announcing today, principally requires us to decide
two questions. First, we must determine whether the Colorado
Department of Revenue and Michael Hartman, in his official
capacity as the Executive Director of the Department (the
"Director" and collectively with the Department,
the "Department"), can require Oracle Corporation
("Oracle") to include its holding company, Oracle
Japan Holding, Inc. ("OJH"), in its Colorado
combined income tax return for the tax year ending May 31,
2000. Second, if the answer to that question is no, then we
must consider whether the Department may nevertheless
allocate OJHs gain from the sale of shares that it held in
Oracle Corporation Japan ("Oracle Japan") to Oracle
in order to avoid abuse and to clearly reflect
income.[1]
[¶2]
For the reasons set forth in Agilent Technologies,
we conclude that the pertinent statutory provisions and
regulations do not permit the Department either to require
Oracle to include OJH in its combined tax return for the tax
year at issue or to allocate OJHs capital gains income to
Oracle. Accordingly, we conclude that the district court
properly granted summary judgment in Oracles favor, and we
therefore affirm the judgment of the division
below.[2]
I. Facts and Procedural History
[¶3]
Oracle is a Delaware corporation headquartered in California,
and it is the parent of a worldwide group of affiliated
corporations.
[¶4]
OJH is a Delaware corporation and a wholly-owned subsidiary
of Oracle. Oracle formed OJH in 1991, pursuant to the terms
of a loan secured by Oracle from Nippon Steel, an
unaffiliated Japanese entity. During the time period at
issue, OJH owned no real or tangible personal property, had
no payroll, and ...