The U.S. Supreme Court agreed to decide whether three energy companies are entitled to more than $500 million in tax credits for payments their subsidiaries made to the U.K. government during the 1990s.
The justices today said they will hear an appeal from PPL Corp., which took a $39 million charge after a federal appeals court ruled against the company. Entergy Corp. is claiming a $234 million credit in a similar legal fight, winning a ruling from a different appeals court.
American Electric Power Co. has yet to go to court in its fight over $285 million it paid in U.K. taxes. The company is seeking less than that in U.S. tax credits, said Kevin Kenworthy, an attorney for AEP.
The issue stems from a windfall tax paid in 1997 and 1998 by utilities in the U.K. that had recently become private companies. The question is whether those payments qualify under a U.S. provision that lets companies take a credit for income taxes they pay abroad.
The Obama administration joined Allentown, Pennsylvania-based PPL in urging the Supreme Court to resolve the disagreement between the appeals courts.
The case is PPL v. Commissioner of Internal Revenue Service, 12-43.
Bloomberg News
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