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Corporate Business Tax Appeal

SLI International Corp.

Represented the plaintiff taxpayer in appeal from a decision of the Superior Court affirming the Commissioner of Revenue's disallowance of certain deductions on its corporate business tax return on the grounds that they related to dividends. The plaintiff had paid commissions to a sister corporation, organized as a "foreign sales corporation" (FSC) under federal tax law, in exchange for the international sale of its products. The FSC declared dividends to the parent corporation. Holding that the FSC complied with federal tax law and that the transaction was not a sham, the Connecticut Supreme Court reversed the trial court and directed judgment for the plaintiff; SLI International Corp. v. Crystal, Connecticut Supreme Court, 236 Conn. 156 (1996).


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