October Term 2012 · Docket 12-43
Does a one-time UK windfall tax qualify as an income tax for credit purposes?
PPL Corp. argues the UK windfall tax is a value tax. The IRS claims it is an income tax.
Verified source milestones
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
Paul Clement argued the UK privatized utilities to allow efficiency gains.
He stated the government planned to keep prices constant.
He claimed the tax targeted the resulting value increase.
Justice Sotomayor noted the tax has two components: floatation value and time.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 10, lines 25-33 — Transcript, file page 10, lines 25-33
- Official Supreme Court Transcript — file page 11, lines 25-31 — Transcript, file page 11, lines 25-31
- Official Supreme Court Transcript — file page 11, lines 35-37 — Transcript, file page 11, lines 35-37
- Official Supreme Court Transcript — file page 12, lines 43-47 — Transcript, file page 12, lines 43-47
- Official Supreme Court Transcript — file page 12, lines 9-15 — Transcript, file page 12, lines 9-15
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 4, lines 17-47 — Transcript, file page 4, lines 17-47
- Official Supreme Court Transcript — file page 5, lines 5-17 — Transcript, file page 5, lines 5-17
- Official Supreme Court Transcript — file page 7, lines 15-23 — Transcript, file page 7, lines 15-23
- Official Supreme Court Transcript — file page 7, lines 45-49 — Transcript, file page 7, lines 45-49
- Official Supreme Court Transcript — file page 8, lines 51-9 — Transcript, file page 8, lines 51-9
- Official Supreme Court Transcript — file page 9, lines 37-49 — Transcript, file page 9, lines 37-49
A citizen's guide to the whole case
What this case is about
PPL Corp. seeks a foreign tax credit for a UK windfall tax. The IRS denies the credit. The dispute centers on the tax's legal classification.
Official sources for this section
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
How the case got here
The Supreme Court heard oral argument in this case on February 20, 2013.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
What each side wants
PPL Corp. wants a foreign tax credit for the UK windfall tax.
The IRS wants to deny the foreign tax credit for the UK windfall tax.
Official sources for this section
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
What each side says
PPL Corp. argues the tax targets company value, not income.
The IRS argues the tax targets excess profits, not company value.
Official sources for this section
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
What the justices asked
Justice Kennedy asked if a one-time tax on income remains an excess profits tax.
Justice Sotomayor asked why the tax does not simply use actual profits instead of estimates.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 25-33 — Transcript, file page 10, lines 25-33
- Official Supreme Court Transcript — file page 11, lines 25-31 — Transcript, file page 11, lines 25-31
- Official Supreme Court Transcript — file page 11, lines 35-37 — Transcript, file page 11, lines 35-37
- Official Supreme Court Transcript — file page 12, lines 43-47 — Transcript, file page 12, lines 43-47
- Official Supreme Court Transcript — file page 12, lines 9-15 — Transcript, file page 12, lines 9-15
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 4, lines 17-47 — Transcript, file page 4, lines 17-47
- Official Supreme Court Transcript — file page 5, lines 5-17 — Transcript, file page 5, lines 5-17
- Official Supreme Court Transcript — file page 7, lines 15-23 — Transcript, file page 7, lines 15-23
- Official Supreme Court Transcript — file page 7, lines 45-49 — Transcript, file page 7, lines 45-49
- Official Supreme Court Transcript — file page 8, lines 51-9 — Transcript, file page 8, lines 51-9
- Official Supreme Court Transcript — file page 9, lines 37-49 — Transcript, file page 9, lines 37-49
Why it matters
The outcome determines how taxpayers classify foreign windfall taxes. It affects the calculation of foreign tax credits. It shapes the definition of income tax in international law.
Official sources for this section
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 25-33 — Transcript, file page 10, lines 25-33
- Official Supreme Court Transcript — file page 11, lines 25-31 — Transcript, file page 11, lines 25-31
- Official Supreme Court Transcript — file page 11, lines 35-37 — Transcript, file page 11, lines 35-37
- Official Supreme Court Transcript — file page 12, lines 43-47 — Transcript, file page 12, lines 43-47
- Official Supreme Court Transcript — file page 12, lines 9-15 — Transcript, file page 12, lines 9-15
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 4, lines 17-47 — Transcript, file page 4, lines 17-47
- Official Supreme Court Transcript — file page 5, lines 5-17 — Transcript, file page 5, lines 5-17
- Official Supreme Court Transcript — file page 7, lines 15-23 — Transcript, file page 7, lines 15-23
- Official Supreme Court Transcript — file page 7, lines 45-49 — Transcript, file page 7, lines 45-49
- Official Supreme Court Transcript — file page 8, lines 51-9 — Transcript, file page 8, lines 51-9
- Official Supreme Court Transcript — file page 9, lines 37-49 — Transcript, file page 9, lines 37-49
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
- Official Supreme Court Transcript — file page 27, lines 49-15 — Transcript, file page 27, lines 49-15
- Official Supreme Court Transcript — file page 3, lines 19-15 — Transcript, file page 3, lines 19-15
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.