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1975 - February DOT Ord. & Dec. [1] (February, 1975)

handle is hein.usfed/dotod0701 and id is 1 raw text is: UNITED STATES OF AMERICA CIVIL AERONAUTICS BOARD WASHINGTON, D.C. THE FLYING TIGER LINE INC. CONTROL RELATIONSHIPS: INTERCOMPANY TAX ALLOCATION DOCKET 21223 Order 75-2-1 Adopted by the Civil Aeronautics Board at its office in Washington, D.C. on the 3rd day of February, 1975 Application of The Flying Tiger Line Inc. and Tiger International, Inc. (formerly The Fly- ing Tiger Corporation), for approval of a tax allocation agreement under paragraph 3 of order 70-6-119, as amended ORDER DENYING PETITION FOR RECONSIDERATION By order 73-12-106, December 26, 1973, the Board approved, subject to various conditions and modifications, a tax allocation agreement among The Flying Tiger Line Inc. (FTL), The Flying Tiger Corporation (FTC), now known as Tiger International, Inc. (TI), and their affiliates, ,filed pursuant to paragraph 3 of order 70-6-119, dated May 5, 1970, as amended.' The proposed agreement2 was approved subject, inter alia, to a condition modifying the proposed utilization of tax savings resulting from the filing of a consolidated tax return by the TI system of affiliated companies.' I Order 70-6-119, amended by order 71-7-6, July 1, 1971 and order 72-2-6, Feb. 2. 1972, inter alia, prohibited intercompany transactions within the TI system of subsidiaries and affiliated companies which amount in the aggregate to $100,000 or more in any calendar year without prior Board approval. Subsequent to its decision in this proceeding, the Board by order 74-5-90, May 17, 1974 increased the dollar limitation to $1 million. 2 The agreement treated the air carrier, FTL, for tax purposes as if it were otherwise un- affiliated. It provided that the air carrier would pay to TI, the holding company, any tax that would have been due were it filing returns as an independent company, and would receive a refund were it entitled to one as a separate company. It further provided that un- der circumstances where net operating losses, investment tax credits, or other tax credits generated by FTL's operations are applied in computing payment of taxes otherwise due from operations of the TI group, FTL would immediately receive in cash the value of the taxes saved. Under comparable circumstances, other subsidiaries of TI would be entitled to receive redeemable credits from TI. 1 The Board stated that contributions by the air carrier to the group's consolidated tax liability should be no more than the sum of (a) an amount proportionate to the air carrier's independent tax liability in relation to the independent tax liability of all members of the group showing a taxable income, and (b) an amount required to redeem credits given by the air carrier to other subsidiaries in prior years, and ordered that. sub- ject to these conditions, FTL shall retain the use of its sheltered income. DOCKET 21223 ORDER 75-2-1

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