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. (PPL:US), which took a $39 million charge after a federal appeals court ruled against the company. Entergy Corp. (ETR:US) is claiming a $234 million credit in a similar legal fight, winning a ruling from a different appeals court.
American Electric Power Co. (AEP:US) 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.
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