Whether a state's tax statute that uses a nonresident's out-of-state income to offset a net operating loss deduction violates the Due Process and Commerce Clauses of the U.S. Constitution

No question identified. : 2. In the decision below, the Montana Supreme Court reversed a determination by the First Judicial District Court of Montana that the use of a nonresident’s out-of-state income to offset a net operating loss (“NOL”) deduction violates the Due Process and Commerce Clauses of the U.S. Constitution and is contrary to the U.S. Supreme Court’s decision in Hunt-Wesson, Inc. v. Franchise Tax Bd., 528 U.S. 458 (2000). See App. 24a. In doing so, the Montana Supreme Court acknowledged “that inclusion of Tiegs’s out-of-state income” in the NOL statute “decreases their eligibility for a Montana NOL deduction and carryforward.” Id. But the Montana Supreme Court erroneously concluded that the resulting tax on the Tiegs’s out-of-state income does not violate the Due Process and Commerce Clauses because the NOL deduction is the same for both residents and non-residents (i.e., “the NOL statute is neutral regarding the source and character of income”). Id. As this Court has made clear, “as to residents, a State ‘may, and does, exert its taxing power over their income from all sources’; as to nonresidents, ‘the tax is only on such income as is derived from . . . sources [within the State].” Okla. Tax. Comm’n v. Chicksaw Nation, 515 U.S. 450, 463 n.11 (1995) (quoting Shaffer v. Carter, 252 U.S. 37, 57 (1920)). Thus, Applicants respectfully submit that this case warrants the Court’s attention. 3. This is Applicants’ first request for an extension of time to file a petition for a writ of certiorari. Good cause exists for the requested extension for the following reasons: a. Eric R. Henkel, counsel of record for Applicants, was first retained on November 7, 2023, and a substantial amount of work remains to be done in order to submit an adequate petition for writ of certiorari. b. Due to the complexity of the case, Applicants are also seeking to retain additional appellate counsel to assist with this case. c. This request is made in good faith and for the reasons set forth above, and not for purposes of delay. 4, Respondent does not object to this application. On November 7, 2023, counsel for Applicants emailed counsel for Respondent, Katherine Talley, who stated that Respondent does not oppose this request. CONCLUSION For the foregoing reasons, Applicants Franklin S. Tiegs, Janet L. Tiegs, and Baker Produce, Inc., a subchapter S. corporation wholly owned by Franklin Tiegs, respectfully request that an order be entered extending the time to file a petition for a writ of certiorari by 60 days, up to and including February 2, 2024. Dated: November 16, 2023 Sean Morrison MORRISON LAW FIRM PLLC 111 N. Last Chance Gulch Helena, MT 59601 Respectfully submitted, /s/ Eric R. Henkel Eric R. Henkel Counsel of Record CHRISTIAN, SAMSON & BASKETT, PLLC 310 W. Spruce Street Missoula, MT 59808 406-721-7772 Counsel for Applicants RULE 29.6 NOTATION Baker Produce, Inc., has no parent, and there is no publicly held companies that hold any stock in Baker Produce, Inc.