Briefly Noted

Briefly Noted

May 05, 1999 | By Keith Martin in Washington, DC

The US Treasury received a letter from Irvin N. Gleim of Gleim Publications, Inc. in Gainesville, Florida recently enclosing copies of newspaper articles describing a LILO, or lease-inlease-out, arrangement that would produce $35 million in benefit to Gainesville Regional Utilities. Gleim condemned the arrangement as “nonsense.” . . . . The town council in Gorham, Maine voted in late March to create a special tax district for an 825-mw merchant power plant proposed by American National Power. The move will give the project about a 30% reduction in local property taxes . . . . The US appeals court for the 2d circuit held in early April that a US mining company, Texasgulf, can claim foreign tax credits in the United States for a mining tax the company paid in Ontario, Canada. The case is interesting because foreign tax credits can only be claimed for foreign taxes on net income. Ontario based its tax on the appraised value of minerals less a fixed percentage for processing costs and profit. The court said this was close enough to net income. US rules treat a tax as one on net income as long as the tax base starts with gross receipts and allows recovery of costs “under a method that is likely to . . . approximate[]” or exceed actual costs . . . . The US Tax Court held in April that a partnership realized capital gains when it sold rights to draw water from the Colorado River back to the federal government. The partnership owned farmland.