Daily Tax Update - June 26, 2017: Supreme Court Declines to Hear FTC Generator, Excise Tax Cases

Supreme Court Declines to Hear FTC Generator, Excise Tax Cases:  Today the US Supreme Court denied review of two tax cases. The first, Bombardier Aerospace Corp. v. United States (U.S. No. 16-1010), involved Bombadier’s challenge to a ruling from the US Court of Appeals for the Fifth Circuit. Bombadier argued that because it is not engaged in “commercial aviation,” it did not owe Section 4261 excise taxes on the monthly management fees collected from participants in its Flexjet program (a fractional-aircraft-ownership program).

The second, Santander Holdings USA, Inc. v. United States (U.S. No. 16-1130), involved an appeal of a decision from the US Court of Appeals for the First Circuit, which held that Santander Holdings’ STARS transaction had no reasonable opportunity of a pre-tax profit and therefore lacked economic substance; consequently Santander was not entitled to $234 million in foreign tax credits for taxes Santander paid to the UK.