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passive holding companies

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The Idaho Supreme Court recently affirmed a District Court’s judgment that the gain from the sale of a 78.54% membership interest in a limited liability company did not constitute ā€œbusiness incomeā€ under Idaho Code section 63-3027.Ā  In Noell Indus. Inc. v. Idaho State Tax Comm’n, Docket No. 46941 (Idaho 2020), the court determined that ā€œthis type of gain does not meet the definition of ā€˜business income’ under either the transactional test or functional test (including the unitary business test),ā€ and was therefore not apportionable income.