Jim Hudson

Summary

The court affirmed summary judgment allowing Murphy to amend its Arkansas tax returns and claim a refund for interest expenses incurred to finance a one-time corporate spin-off. It held that the spin-off was extraordinary and nonrecurring, so the related expenses were allocable to nonbusiness income under the UDITPA, and that the Arkansas deduction prohibition applies only to expenses allocable to income Arkansas cannot tax. The court also declined to deny the refund based on potential tax consequences in other states.