Entergy Corporation and Affiliated Subsidiaries, Petitioner

T .C . Memo . 2010-197

UNITED STATES TAX COURT

ENTERGY CORPORATION & AFFILIATED SUBSIDIARIES, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 251.32-06 . Filed September 9, 2010 .

Stephen D . Gardner and William H : O'Brien , for petitioner .

Michael C . Prindible .and Melissa D . Arndt , for respondent .

MEMORANDUM OPINIO N

HALPERN, Judge : Entergy Corp . (petitioner) is the common parent of an affiliated group of . corporations (the group) making a consolidated return of income . By notice of deficiency respondent determined deficiencies of $17,341,254 and $61,729 .,798 in the group's Federal income tax for its 1997-and 1998 taxabl e (calendar) years, respectively . The only issue remaining fo r SER

SEP 9 20.10

ii f/ decision is . whether respondent properly denied a foreign tax credit for the United Kingdom (U .K .) windfall tax paid by petitioner's indirect U .K . subsidiary .' That issue is identical to the issue in PPL Corp . & Subs . v . Commissioner , 135 T .C .

(2010), which we also decide today . Moreover, the material facts with respect to that issue are identical to the corresponding facts in PPL .

Unless otherwise stated, all section references are to the Internal Revenue Code in effect for 1997 and 1998 .

The parties have stipulated that, in 1997, petitioner's indirect U .K . subsidiary, London Electricity plc, became liable for the U .K . windfall tax, a "one-off" (i .e ., one-time) tax of £139,962,622, which it timely paid in two equal installments on December 2, 1997 and 1998 . The sole issue is whether the U .K .

windfall tax constituted an income or excess profits tax under section 901(b)(1), thereby entitling petitioner to a foreign tax credit under section 901(a) for London Electricity's payment of that tax . In PPL , we answer that question in the affirmative .

Respondent makes no argument that leads us to believe we hav e 'We decided a separate issue in Entergy Corp . v .

Commissioner , T .C . Memo . 2010-166 .

u erred in PPL . We rely on PPL in holding for petitioner on th e windfall tax issue .

An appropriate order and decision will be issued .