Davis Polk counsel Chris Baratta discussed the decision in Varian Medical Systems v. Commissioner and its impact with Bloomberg Tax.

In Varian, the first case to consider the validity of a Treasury regulation after Loper Bright (in which the U.S. Supreme Court rejected the longstanding Chevron doctrine), the Tax Court invalidated the regulation in question and ruled that the taxpayer was entitled to the favorable tax treatment provided by a statutory mismatch in effective dates between the new Section 245A and a corresponding change to Section 78.

The article notes that more companies are starting to see significant benefits from the ruling and are taking similar deductions. How much each company benefits from the Varian ruling can differ, depending on factors such as each company’s tax structure and how much in foreign dividends it received from its affiliates. That’s “sort of exactly what we were anticipating,” Chris explained.

“Cisco, Booking Get Big Tax Benefits From Varian Court Ruling,” Bloomberg Tax (December 2, 2024) (subscription required)

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