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Show COPPER CO. ASKS FOR TAXREFUND Kennecott Copper Corp., parent par-ent of Utah Copper company, Tuilay filed suit in federal district dis-trict court seeking a $37,814.22 judgment against the Utah state tax commission. Kennecott charged charg-ed the commission with collecting collect-ing the money by illegally taxing a federal mine subsidy paid to Kennecott for production during 1943. The tax commission, Kennecott contended in its suit, "erroneously "erroneous-ly added" a $3,781,421.55 federal subsidy to actual copper sales of $77,762,913.44 in levying a 1 per cent occupational tax on gross sales of metal ores in Utah. Outcome of the suit will affect all mines in Utah where federal subsidies are paid for ore production, pro-duction, and likely will bring a bearing on similar tax problems facing other western states with taxes such as Utah levies on mine operations. Kennecott Copper originally protested the tax on subsidy payments pay-ments in a hearing before the tax commission May 27. The commission, commis-sion, on a ruling by Atty. Gen. Grover A. Giles, denied the company's com-pany's protest. Kennecott paid under protest the full 1 per cent occupation tax of $815,433.35, figured on actual cooper sales plus the federal subsidy. sub-sidy. Thus the federal suit is the second action Kennecott has taken tak-en to avoid payment of an occupational occu-pational tax on the federal subsidy. sub-sidy. In its suit, the copper company, a New York corporation which owns Utah Copper mine and other mining properties in Bingham, Bing-ham, and reduction mills 'in Salt Lake county near Magna, contended: con-tended: In taxing federal subsidies which are "allowances, not income, in-come, for the purpose of excess profits tax under the federal revenue re-venue act", the Utah tax commission com-mission is usurping the power of the national government and interfering in-terfering with prosecution of the war. Since by constitution only the federal government may wage war and states are denied this prerogative, the state of Utah has no right to "confiscate" moneys paid by the federal government to further the war, Kennecott's suit asserted, adding that the commission clearly exceeded its legal authority. On August 12, 1941, price of copper in the Utah area was set at 12 cents a pound by office of price administration. On February Febru-ary 1, 1942, Metals Reserve company, com-pany, an agency of the federal government, began payment of a 5c a pound copper subsidy over certain production quotas to encourage en-courage mine owners to increase copper output. Subsequently, a second 5c a pound subsidy was added to the original subsidy. Atty. Gen. Giles said that, in handing down his ruling he was "not seeking to take unfair advantage ad-vantage of a taxpayer. But where such a large sum of money is involved, in-volved, this is a matter that should be finally determined by the courts, not by personal opinions." |