B. F. Goodrich Co. v. Sullivan

• Decision Date: 20 October 1966
• Docket Number: No. 133030,133030
• Citation: 26 Conn.Supp. 373,224 A.2d 754
• Court: Connecticut Superior Court
• Parties: The B. F. GOODRICH COMPANY v. John L. SULLIVAN, Tax Commissioner.

Page 754

224 A.2d 754

26 Conn.Supp. 373

The B. F. GOODRICH COMPANY v. John L. SULLIVAN, Tax Commissioner.

No. 133030.

Superior Court of Connecticut, Hartford County.

Oct. 20, 1966.

Shepherd, Murtha & Merritt, Hartford, for plaintiff.

Harold M. Mulvey, Atty. Gen., and Walter T. Faulkner and Ralph G. Murphy, Asst. Atty. Gen., for defendant.

PALMER, Judge.

This action is an appeal from a determination of the defendant with respect to the plaintiff's tax liability to the state of Connecticut for the years 1958, 1959 and 1960. On January 25, 1963, the defendant issued to the plaintiff a statement of the amount due on plaintiff's corporation business taxes for the years 1958, 1959 and 1960 which showed a balance due of $29,060.54. The revised computation and statement of balance due resulted from the defendant's refusal to recognize the plaintiff's right to file on a separate accounting basis for its 'Sponge Products Division,' which is located in the town of Shelton. It is from this determination by the defendant that this appeal is taken.

The plaintiff, a foreign corporation qualified to do business and doing business in this state, is subject to the tax imposed by § 12-214 of the General Statutes, which provides that 'such tax (is) to be measured by the entire net income as herein defined received by such corporation * * * from business transacted within the state during the income year.' The plaintiff maintained a permanent place of business in this state during the years in question and was therefore subject to the tax prescribed, in accordance with the provisions of § 12-218, which states that 'the business tax shall be imposed on a base which reasonably represents the proportion of the trade or business carried on within the state.' The statute goes on to state the allocation of the base of the tax measured by net income.

In a special defense, the defendant alleged that the plaintiff has not alleged that it complied with the provisions of § 12-221 for the administrative remedy provided by that section. In its amended reply, the plaintiff alleges that the defendant waived the right to assert the defense that the plaintiff allegedly failed to avail itself of administrative remedies. This claim in the amended reply cannot be sustained. 'Regardless of the action of the administrator * * *, he cannot waive the rights of the state, nor can he, by any act of his, estop the state from asserting its rights or prevent the performance of his statutory duties.' McGowan v. Administrator, 153 Conn. 691, 694, 220 A.2d 284, 286. It is therefore necessary to pass on the special defense that the plaintiff failed to exhaust the administrative remedy set forth in § 12-221.

Section 12-221 provides in part as follows: 'If an officer of any company believes that the method of allocation and apportionment prescribed in sections 12-218 and 12-220, as administered by the tax commissioner and applied to its business, has operated or will so operate as to subject it to taxation on a greater portion of its business than is reasonably attributable to this state, such officer may file, with his return to the commissioner, a statement of his objections and such alternative method of allocation and apportionment as he believes to be proper under the circumstances, with such detail and proof and within such time as the commissioner may reasonably prescribe.' (Italics supplied.) At the time the plaintiff filed its return for the calendar year 1958, it incorporated in the return a statement that it believed 'that the method of allocation and apportionment prescribed by Sections 12-218 and 12-220 as administered by he Tax Commissioner and applied to its business has operated or will so operate as to subject it to taxation on a greater portion of its business than is reasonably attributable to the State of Connecticut. Therefore, by virtue of the authority granted in Section 12-221 the attached return has...