A Pennsylvania paper company’s pulpwood supplier has lost its bid to avoid corporate tax liability on a multimillion-dollar sale of thousands of acres of timberland holdings the supplier had owned in Delaware.
The state Supreme Court’s five-justice majority largely rendered its opinion based on changes the state General Assembly made in 2001 to the state’s Tax Reform Code of 1971, namely the ostensible broadening of what classifies as "business income." The pulpwood supplier, Glatfelter Pulpwood Co., also failed to persuade the court that the sale of its Delaware timberland was unrelated to its regular business in Pennsylvania and that imposing Pennsylvania taxation of the net gain of the sale would be duplicative and unconstitutional.
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