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                                                        ADVANCE SHEET HEADNOTE
                                                                      May 28, 2019

                                       2019 CO 41

No. 17SC840, Department of Revenue v. Agilent Technologies—Corporate Income
Tax—Taxation of Holding Companies.

      This case principally requires the supreme court to decide two questions. First,

the court must determine whether the Colorado Department of Revenue and its

Executive Director can require the parent company of a worldwide family of affiliated

corporations to include a holding company and wholly owned subsidiary of the parent

in its Colorado combined income tax returns for certain tax years at issue. If the answer

to that question is no, then court must consider whether the Department may

nevertheless allocate the holding company’s gross income to the parent in order to avoid

abuse and to clearly reflect income.

      As to the first question, the court concludes that sections 39-22-303(11)–(12), C.R.S.

(2018), do not authorize the Department to require the parent to include its holding

company in its combined tax returns for the tax years at issue because that holding

company is not an includable C corporation within the meaning of those provisions. As

to the second question, the court likewise concludes that the Department may not allocate

the holding company’s income to the parent under section 39-22-303(6) because (1) that
section has been superseded by section 39-22-303(11) as a vehicle for requiring combined

reporting for affiliated C corporations and (2) even if section 39-22-303(6) could apply, on

the undisputed facts of this case, no allocation would be necessary to avoid abuse or

clearly reflect income.

       Accordingly, the court concludes that the district court properly granted summary

judgment in the corporate parent’s favor and therefore affirms the judgment of the

division below.
                    The Supreme Court of the State of Colorado
                    2 East 14th Avenue • Denver, Colorado 80203

                                      2019 CO 41

                         Supreme Court Case No. 17SC840
                       Certiorari to the Colorado Court of Appeals
                        Court of Appeals Case No. 16CA849

                           Petitioners/Cross-Respondents:

 Department of Revenue of the State of Colorado; and Michael Hartman, in his official
   capacity as the Executive Director of the Department of Revenue of the State of
                                      Colorado,

                                           v.

                            Respondent/Cross-Petitioner:

                              Agilent Technologies, Inc.

                                 Judgment Affirmed
                                      en banc
                                    May 28, 2019


Attorneys for Petitioners/Cross-Respondents:
Philip J. Weiser, Attorney General
Terence C. Gill, First Assistant Attorney General
Noah C. Patterson, Senior Assistant Attorney General
       Denver, Colorado

Attorneys for Respondent/Cross-Petitioner:
Silverstein & Pomerantz LLP
Neil I. Pomerantz
        Denver, Colorado

Morrison & Foerster LLP
Craig B. Fields
Irwin M. Slomka
      New York, New York
Attorneys for Amicus Curiae Council on State Taxation:
Holland & Hart LLP
Christina F. Gomez
Jonathan S. Bender
       Denver, Colorado

Attorney for Amici Curiae Professors David Gamage, Hayes Holderness, and Darien
Shanske:
Isaac L. Lodico
       Denver, Colorado




JUSTICE GABRIEL delivered the Opinion of the Court.



                                        2
¶1       This case principally requires us to decide two questions. First, we must determine

whether the Colorado Department of Revenue and Michael Hartman, in his official

capacity as the Executive Director of the Department (the “Director” and collectively with

the Department, the “Department”), can require Agilent Technologies, Inc. (“Agilent”) to

include its holding company, Agilent Technologies World Trade, Inc. (“World Trade”),

in its Colorado combined income tax returns for the tax years 2000–07. Second, if the

answer to that question is no, then we must consider whether the Department may

nevertheless allocate World Trade’s gross income to Agilent in order to avoid abuse and

to clearly reflect income.1




1   Specifically, we granted certiorari to review the following issues:
      1. Whether a holding company that has no foreign property, payroll, or
         operations is exempt from Colorado taxation under the “Water’s Edge”
         exemption (C.R.S. § 39-22-303(8), (12)(c), 2017).
      2. Whether section 39-22-303(6) authorizes the Department to allocate a
         domestic holding company’s income to its corporate parent to “clearly
         reflect” the parent’s income and “avoid abuse.”
      3. Whether the principles of federal conformity require that the federal
         “check-the-box” elections made by World Trade’s subsidiaries be followed
         for Colorado income tax purposes, resulting in World Trade being excluded
         from Agilent’s Colorado combined returns under Section 303(8) because, as
         a result of those elections, more than 80% of World Trade’s property and
         payroll is located outside the United States.
      4. Whether World Trade [should] be excluded from Agilent’s combined
         returns because at least three of the six factors required for combination
         under Section 303(11)(a) are not satisfied.



                                               3
¶2    As to the first question, we now conclude that sections 39-22-303(11)–(12), C.R.S.

(2018), do not authorize the Department to require Agilent to include World Trade in its

combined tax returns for the tax years at issue because World Trade is not an includable

C corporation within the meaning of those provisions. As to the second question, we

likewise conclude that the Department may not allocate World Trade’s income to Agilent

under section 39-22-303(6) because (1) that section has been superseded by section

39-22-303(11) as a vehicle for requiring combined reporting for affiliated C corporations

and (2) even if section 39-22-303(6) could apply, on the undisputed facts presented here,

no allocation would be necessary to avoid abuse or clearly reflect income.

¶3    Accordingly, we conclude that the district court properly granted summary

judgment in Agilent’s favor, and we therefore affirm the judgment of the division below.2

                           I. Facts and Procedural History

¶4    Agilent is a Delaware corporation headquartered in California, and it is the parent

company of a worldwide family of affiliated corporations that develops and

manufactures bio-analytic and electro-analytic devices. Agilent maintains research and

development and manufacturing sites in Colorado and is thus subject to Colorado

corporate income tax.


2 In reaching this conclusion, we acknowledge that toward the end of the recently
concluded legislative session, and after we heard oral argument in this case, the General
Assembly passed Senate Bill 19-233, which had been introduced the week before our oral
argument. If this bill is eventually signed by the Governor, it would amend section
39-22-303 to enact into law the interpretation of that statute that the Department has
asked us to read into the current statute. Because this bill, if enacted, would not become
effective until August 2, 2019, and because its text makes clear that the amendments
change prior law, the bill has no bearing on our analysis here.

                                            4
¶5     World Trade is a Delaware corporation and a wholly owned subsidiary of Agilent.

During the time period at issue, World Trade did not own any real or tangible personal

property and did not have any employees or payroll of its own. Rather, World Trade

served as a holding company, and, as pertinent here, it owned the stock of four foreign

subsidiaries that operated exclusively outside of the United States. World Trade earned

substantial dividends on its shares in the above-noted subsidiaries, and it is the tax

treatment of these dividends that has given rise to the dispute that is now before us.

¶6     For the tax periods beginning June 3, 2000, and ending October 31, 2007, Agilent

filed separate company Colorado corporate income tax returns and did not include

World Trade in its Colorado corporate tax returns for those periods, notwithstanding the

fact that, for federal income tax purposes, each of the above-noted foreign subsidiaries of

World Trade made so-called “check-the-box” elections to be treated as disregarded

entities (and therefore as divisions of World Trade) for federal income tax purposes.

¶7     The Department subsequently audited Agilent’s corporate tax returns and in

August 2010 issued notices of tax deficiencies for the periods at issue. As pertinent here,

these notices required Agilent to file Colorado combined corporate income tax returns

for the periods at issue and to include World Trade in those returns. These notices also

advised Agilent that the Department had assessed tax, interest, and penalties against it

totaling $13,345,601.

¶8     Agilent protested this assessment, but the Director upheld it, and in 2014, the

Department issued a “Notice of Final Determination and Assessment and Demand for

Payment,” which included additional interest and brought the assessment to $13,720,507.

                                            5
¶9     Agilent then filed a proceeding in the Denver district court challenging the

Department’s determination.       The parties subsequently cross-moved for summary

judgment, and the court ultimately granted summary judgment in favor of Agilent and

against the Department.

¶10    As pertinent here, the court rejected Agilent’s contentions that (1) the Department

was required to respect the foreign subsidiaries’ check-the-box elections and similarly

treat World Trade and the four subsidiaries as a single C corporation for Colorado income

tax purposes and, therefore, (2) more than 80% of World Trade’s property and payroll

fell outside of the United States, thus precluding the Department, under section

39-22-303(8), from requiring World Trade’s inclusion in Agilent’s combined return. The

court further rejected Agilent’s contention that World Trade did not satisfy at least three

of the six factors set forth in section 39-22-303(11)(a), as required to mandate inclusion in

a Colorado combined return.

¶11    The court proceeded to determine, however, that World Trade did not meet the

definition of an includable C corporation for purposes of section 39-22-303(12)(c). The

court based this conclusion on the facts that (1) World Trade was a holding company with

no property or payroll of its own in the United States and (2) the Department’s own

regulation, Colo. Code Regs. section 201-2:39-22-303.12(c) (2019), provided that such a

corporation could not be included in a combined return. The court further rejected the

Department’s alternative argument that the inclusion of World Trade’s income in

Agilent’s combined return was warranted under section 39-22-303(6). In reaching this

conclusion, the court again turned to the Department’s regulations, this time Colo. Code

                                             6
Regs. section 201-2:39-22-303.6 (2019), which provides, in substance, that section

39-22-303(6) is not a vehicle for combining income of affiliated corporations and cannot

be used to circumvent the combined reporting requirements set forth in

sections 39-22-303(8)–(12).

¶12    The Department appealed, Agilent cross-appealed, and in a unanimous, published

opinion, a division of the court of appeals affirmed. Agilent Techs., Inc. v. Dep’t of Revenue,

2017 COA 137, __ P.3d __. As pertinent here, the division agreed with the district court

that the foreign subsidiaries’ check-the-box elections did not preclude the Department

from requiring World Trade’s inclusion in Agilent’s Colorado combined returns. Id. at

¶¶ 27–31. Like the district court, however, the division further concluded that World

Trade, as an entity without property or payroll of its own in the United States, was not

an “includable C corporation” under section 39-22-303(12)(c) and the applicable

regulation. Id. at ¶¶ 18–26. And the division concluded that section 39-22-303(6) did not

provide the Department with an alternative basis for taxing World Trade’s income

because, on the undisputed facts presented, Agilent’s formation of World Trade did not

constitute “abuse” within the meaning of that provision. Id. at ¶¶ 33–38. In light of these

determinations, the division affirmed the district court’s judgment and declined to reach

Agilent’s contention that that court had erred in holding that World Trade satisfied at

least three of the six factors set forth in section 39-22-303(11)(a). Id. at ¶¶ 44–46.

¶13    The Department petitioned this court for certiorari review, and Agilent

cross-petitioned, requesting that we review those of its arguments that the division had

rejected. We granted both parties’ petitions.

                                               7
                                        II. Analysis

¶14    The Department principally contends that under sections 39-22-303(11)–(12), the

Department can require Agilent to include World Trade in its Colorado combined tax

returns. The Department further contends that even if it may not do so under those

provisions, pursuant to section 39-22-303(6), it may nevertheless allocate World Trade’s

gross income to Agilent in order to avoid abuse and to clearly reflect income. We begin

by setting forth our standard of review and the pertinent principles of statutory

construction. We then address the Department’s various statutory and policy arguments,

and we reject each of those arguments in turn. As a result, we need not consider the two

issues that Agilent raised in its cross-petition.

        A. Standard of Review and Principles of Statutory Construction

¶15    This case requires us to review the district court’s entry of summary judgment in

Agilent’s favor. We review a grant of summary judgment de novo. Hardegger v. Clark,

2017 CO 96, ¶ 13, 403 P.3d 176, 180. When, as here, the material facts are undisputed,

summary judgment is proper only when the pleadings and supporting documents show

that there is no genuine issue of material fact and that the moving party is entitled to

judgment as a matter of law. Id.; C.R.C.P. 56(c). In considering whether summary

judgment is proper, a court grants the nonmoving party the benefit of all favorable

inferences that may reasonably be drawn from the undisputed facts and resolves all

doubts against the moving party. Hardegger, ¶ 13, 403 P.3d at 180. In responding to a

properly supported summary judgment motion, however, the nonmoving party may not



                                               8
rest on mere allegations or demands in its pleadings but rather must provide specific facts

demonstrating a genuine issue for trial. Id.

¶16      We also review questions of statutory interpretation de novo. UMB Bank, N.A. v.

Landmark Towers Ass’n, 2017 CO 107, ¶ 22, 408 P.3d 836, 840. In construing a statute, our

goal is to effectuate the legislature’s intent. Oakwood Holdings, LLC v. Mortg. Invs. Enter.

LLC, 2018 CO 12, ¶ 12, 410 P.3d 1249, 1252. In seeking to do so, “we look to the entire

statutory scheme in order to give consistent, harmonious, and sensible effect to all of its

parts, and we apply words and phrases in accordance with their plain and ordinary

meanings.” UMB Bank, ¶ 22, 408 P.3d at 840. We must avoid constructions that would

render any words or phrases superfluous or that would lead to illogical or absurd results.

Am. Fam. Mut. Ins. Co. v. Barriga, 2018 CO 42, ¶ 8, 418 P.3d 1181, 1183. In addition, we

must respect the legislature’s choice of language, and we will not add words to a statute

or subtract words from it. Oakwood Holdings, ¶ 12, 410 P.3d at 1252. If the statutory

language is clear, we apply it as written and need not resort to other rules of statutory

construction. Id. In addition, we may consider an agency’s interpretation of a statute,

but we are not bound by the agency’s interpretation, and we will not defer to that

interpretation if it is contrary to the statute’s plain language. BP Am. Prod. Co. v. Colo.

Dep’t of Revenue, 2016 CO 23, ¶ 15, 369 P.3d 281, 285.

                             B. Sections 39-22-303(11)–(12)

¶17      Section 39-22-303(11)(a) delineates what has come to be known as the “three-of-six

test”:



                                               9
       In the case of an affiliated group of C corporations, the executive director may
       require, or the taxpayer may file, a combined report, but such report shall
       only include those members of an affiliated group of C corporations as to
       which any three of [a list of six enumerated] facts have been in existence in
       the tax year and the two preceding tax years[.]

(Emphasis added.)

¶18    Section 39-22-303(12)(a) defines “affiliated group” to mean “one or more chains of

includable C corporations connected through stock ownership with a common parent

C corporation which is an includable C corporation if [certain stock ownership

requirements are satisfied].” (Emphasis added.)

¶19    And section 39-22-303(12)(c), in turn, defines “includable C corporations” as “any

C corporation which has more than twenty percent of the C corporation’s property and

payroll as determined by factoring pursuant to section 24-60-1301, C.R.S., assigned to

locations inside the United States.”3

¶20    Read together, these provisions allow the Director to require a Colorado combined

return of “an affiliated group of C corporations,” and in such circumstances, chains of

includable corporations that meet the three-of-six test must be included in the combined

return.

¶21    The first question that we must decide, then, is whether World Trade is an

includable C corporation such that, subject to satisfaction of the three-of-six test, the


3  Section 24-60-1301, art. IV, C.R.S. (2018), sets forth certain factoring formulas for
apportioning business income. The property factor is a fraction, the numerator of which
is the average value of the taxpayer’s real and tangible personal property owned or rented
and used in Colorado during the pertinent tax period and the denominator of which is
the average value of all of the taxpayer’s real and tangible personal property owned or
rented and used during the tax period. § 24-60-1301, art. IV, § 10.

                                             10
Director may require that any chain of which it is a part be included in a combined return.

We conclude that it is not such a corporation.

¶22    As noted above, an includable C corporation is a C corporation that has more than

twenty percent of its property and payroll as determined by factoring pursuant to section

24-60-1301 assigned to locations inside the United States.

¶23    Here, World Trade has no property or payroll as determined by the requisite

factoring inside the United States. Accordingly, World Trade is not part of a chain of

includable corporations, whether or not it meets the three-of-six test, and therefore the

director may not require that it be included in Agilent’s combined return under

39-22-303(11)(a).

¶24    Our conclusion in this regard is supported by Colo. Code Regs. section

201-2:39-22-303.12(c), entitled “Corporations without property and payroll factors,”

which the Department promulgated in 1994. That regulation provides, in pertinent part,

“Since corporations that have no property or payroll factors of their own cannot have

twenty percent or more of their factors assigned to locations in the United States, such

corporations, by definition, cannot be included in a combined report.” In our view, this

regulation is directly on point because it unambiguously provides that if a corporation

has no property or payroll of its own, then it may not be included in a combined return.

World Trade does not have any property or payroll of its own. Accordingly, the

regulation prohibits the inclusion of World Trade in Agilent’s return. See Rags Over the

Ark. River, Inc. v. Colo. Parks & Wildlife Bd., 2015 COA 11M, ¶ 25, 360 P.3d 186, 191 (noting

that an administrative agency is bound by the regulations that it enacts).

                                             11
¶25    In so concluding, we are unpersuaded by the Department’s assertion that the

aforementioned regulation is inapplicable because it was intended to apply solely to

foreign sales corporations. The regulation does not express any such limitation, and

when the language of a regulation is clear and unambiguous, we must apply it as written.

See Dawson v. Exec. Dir. of Colo. Dep’t of Corrs., 2014 COA 69, ¶ 8, 345 P.3d 969, 970 (noting

that courts construe administrative rules and regulations in the same manner as statutes

and that when the language of a regulation is clear and unambiguous, courts do not resort

to rules of construction).

¶26    Moreover, we deem as significant the fact that when the Department adopted a

regulation that mirrored the argument that it is making before us, the legislature rejected

the Department’s position. Specifically, in 1990, the Department promulgated a prior

version of Colo. Code Regs. section 201-2:39-22-303.12(c) (1990), that provided, in

pertinent part, “A corporation without property and payroll, which functions through

the use of personnel services and/or property of an includible corporation, shall also be

considered an includible corporation.” The Office of Legislative Legal Services (“OLLS”),

however, reviewed this regulation and determined that it

       conflict[ed] with the definition of “includible corporations” as set forth in
       section 39-22-303(12)(c), C.R.S. The regulation[] allow[ed] corporations
       with no property or personnel to be considered includible corporations
       even though such corporations [did] not satisfy the statutory requirements
       of having more than twenty percent of its property and payroll located
       within the United States.




                                             12
Memorandum from Sharon L. Eubanks, OLLS, to the General Assembly’s Committee on

Legal Services 2 (Nov. 7, 1990). The General Assembly accepted the OLLS’s conclusion

and voted against extending the regulation, thus allowing it to expire on June 1, 1991.

¶27    Notwithstanding the foregoing, the Department contends, based on its view of the

available legislative history, that section 39-22-303(11) was never intended to apply to

wholly domestic corporations.       Regardless of what the Department believes the

legislature may or must have intended, however, in our view, the statutory language and

the Department’s regulations are clear and unambiguous, and we must therefore follow

them without the need to resort to other tools of statutory construction. See, e.g., Oakwood

Holdings, ¶ 12, 410 P.3d at 1252 (noting that if the statutory language is clear, then the

court must apply it as written and need not resort to other rules of statutory construction);

UMB Bank, ¶ 22, 408 P.3d at 840 (explaining that, in construing a statute “we apply words

and phrases in accordance with their plain and ordinary meanings”).

¶28    We likewise are unpersuaded by the Department’s assertion that section

39-22-303(12)(a) applies and requires the inclusion of World Trade in Agilent’s Colorado

combined returns because World Trade, in fact, had domestic property (because it used

tangible property of Agilent, including computers, printers, and other equipment). As

noted above, a corporation’s property and payroll are determined under factoring

formulas for apportioning business income, including a formula for apportioning the

property factor. Like the division below, however, Dep’t of Revenue, ¶ 25, we conclude

that the record does not show how, if at all, World Trade came to use this property.



                                             13
Accordingly, we discern no error in the district court’s determination that World Trade

had no property factors.

¶29   For these reasons, we conclude that sections 39-22-303(11)–(12) do not authorize

the Department to require Agilent to file a combined report that includes World Trade,

and we need not consider whether World Trade may also be excluded under the test set

forth in section 39-22-303(8). We thus proceed to consider the Department’s alternative

argument under section 39-22-303(6).

                              C. Section 39-22-303(6)

¶30   As noted above, the Department alternatively argues that under section

39-22-303(6), it may allocate World Trade’s income to Agilent to avoid abuse and to

clearly reflect income. Again, we are not persuaded.

¶31   As an initial matter, we note that the Department’s own regulations again

undermine its argument.      Specifically, Colo. Code Regs. section 201-2:39-22-303.6

provides, “Even though subsection 39-22-303(6), C.R.S. has been superseded by

subsection 39-22-303(11), C.R.S., as a vehicle for requiring combined reporting for

affiliated C corporations, subsection 39-22-303(6) is still available for use by the

Department of Revenue or by the taxpayer for determining Colorado taxable income by

use of [described methodologies].”

¶32   Accordingly, although section 39-22-303(6) retains some vitality, section

39-22-303(11), not section 39-22-303(6), is the provision that determines when combined

reporting may be required. To conclude otherwise would render section 39-22-303(11)

meaningless because the Department could always override the result dictated by the

                                          14
objective tests set forth therein merely by making a subjective determination that such an

override is necessary to avoid abuse and to clearly reflect income.            We cannot

countenance such a result. See Am. Fam. Mut. Ins. Co., ¶ 8, 418 P.3d at 1183 (requiring that

we avoid constructions that would render any words or phrases superfluous or that

would lead to illogical or absurd results).

¶33    Even if section 39-22-303(6) could apply, however, we conclude that it is

inapplicable on the undisputed facts now before us.

¶34    Section 39-22-303(6) provides:

       In the case of two or more C corporations, whether domestic or foreign,
       owned or controlled directly or indirectly by the same interests, the
       executive director may, to avoid abuse, on a fair and impartial basis,
       distribute or allocate the gross income and deductions between or among
       such C corporations in order to clearly reflect income.

¶35    By its plain terms, this provision allows the Director to distribute or allocate

income only if doing so is necessary to avoid abuse and to clearly reflect income.

¶36    Although the phrase “to avoid abuse” is not defined, the Department contends

that in the tax context, “abuse” is a broad concept and exists whenever a taxpayer reduces

its tax liability by ordering its affairs so as to comply with the text of the statute while

contradicting the statute’s intent. The Department further contends that “[s]ubsection (6)

does not require the taxpayer itself to engage in abuse, but empowers the Department ‘to

avoid abuse’ generally.” In the Department’s view, then, a corporate structure may

constitute abuse even if that structure serves a legitimate business purpose. We are not

persuaded.



                                              15
¶37    Here, the Department’s own evidence showed that Agilent formed World Trade

for legitimate non-tax-related purposes and that Agilent’s doing so did not constitute

abuse. For example, Sarah Roberts, an expert designated by the Department, testified

that she had no evidence that World Trade was not set up for legitimate business

purposes. Similarly, when asked if World Trade was a sham, Benjamin F. Miller, another

expert designated by the Department, testified, “It’s not a sham. It is certainly a normal

and traditional way to do things to isolate ownership interest.”

¶38    Thus, the Department’s own evidence precludes a finding that an allocation of

income to Agilent is necessary to avoid abuse.

¶39    Finally, even were we to accept the Department’s broad definition of “abuse,” no

evidence presented in this case supports the Department’s suggestion that Agilent and

World Trade ordered their affairs so as to comply with the text of the pertinent statutes

while contradicting the legislative intent behind those statutes. To the contrary, we

perceive the Department’s construction of the statutes and regulations at issue to be

inconsistent with the clear and unambiguous language of those provisions, and for the

reasons set forth above, we cannot adopt such a construction. See Am. Fam. Mut. Ins. Co.,

¶ 8, 418 P.3d at 1183.

¶40    Accordingly, we conclude that section 39-22-303(6) does not provide the

Department with an alternative method of requiring Agilent to file a combined report

that includes World Trade.




                                           16
                      D. The Department’s Policy Arguments

¶41   Notwithstanding the plain language of the pertinent statutes and of its own

regulations, the Department contends that construing the provisions at issue as we have

done will lead to absurd results and a parade of horribles because a taxpayer could

always shield income from Colorado taxation simply by creating a holding company. For

several reasons, we are not persuaded.

¶42   First, to the extent that the Department disagrees with the plain language of the

pertinent statutes, its remedy is with the legislature and not this court because we must

apply statutory language as written. Oakwood Holdings, ¶ 12, 410 P.3d at 1252.

¶43   Second, as the Department’s own expert witness recognized, the formation of a

holding company is a “normal and traditional way to do things,” and we therefore do

not agree with the Department’s apparent premise that the creation of a holding

company, in and of itself and with no evidence that the company was created to avoid

Colorado taxation, constitutes “abuse” within the meaning of the pertinent provision.

¶44   Third, although the Department posits that a parade of horribles will follow the

statutory interpretation that we have adopted today, it has offered no evidence to support

such dire predictions, and we have seen none.

¶45   Accordingly, we conclude, on the undisputed facts of this case, that

sections 39-22-303(11)–(12) do not authorize the Department to require Agilent to include

World Trade in its Colorado combined returns for the tax years at issue and that

section 39-22-303(6) does not afford the Department an alternative means of allocating

World Trade’s income to Agilent.

                                           17
                                      E. Other Issues

¶46    For the foregoing reasons, we conclude that the district court properly granted

summary judgment in favor of Agilent and against the Department, and we need not

address the issues concerning World Trade’s check-the-box election and the three-of-six

test that Agilent raised in its cross-petition.

                                      III. Conclusion

¶47    Because the plain and unambiguous language of the pertinent statutory provisions

and associated regulations demonstrate that the Department may not compel Agilent to

include World Trade in its combined return or otherwise to include World Trade’s

income in that return, we conclude that the district court properly granted summary

judgment in Agilent’s favor and against the Department.

¶48    Accordingly, we affirm the judgment of the division below.




                                                  18
