STATE OF WISCONSIN
TAX APPEALS COMMISSION
100 NE Adams Street
Peoria, IL 61629-4295,
WISCONSIN DEPARTMENT OF REVENUE
P.O. Box 8933
Madison, WI 53708-8933,
|Docket No. 97-I-191
DECISION AND ORDER
DON M. MILLIS, COMMISSIONER:
This matter comes before the Commission for a decision on stipulated facts. Both parties have submitted briefs in support of their respective positions. Petitioner is represented by Foley and Lardner, by Attorneys Timothy C. Frautschi and Maureen A. McGinnity. Respondent is represented by Attorney Lili Best Crane.
FINDINGS OF FACT
The Commission adopts as its findings of facts, the facts stipulated by the parties. The Commission has made non-substantive revisions to the Stipulation of Facts filed by the parties. These revisions were made for purposes of form, consistency, paragraph order, omission of references to exhibits, and inclusion of facts contained in exhibits.
1. In the 1920s, Caterpillar Tractor Co. was incorporated in California. In 1986, Caterpillar Tractor Co. changed its company name to remove the reference to a single product and better reflect the scope of the company's business operations.
2. To reflect the above changes, Caterpillar Tractor Co. first incorporated a new entity, Caterpillar Inc. ("petitioner") in Delaware as a wholly owned subsidiary of the exiting entity, Caterpillar Tractor Co. Caterpillar Tractor Co. then immediately merged into petitioner effective May 8, 1986.
3. The change in the state of incorporation to Delaware was made to obtain the benefits of Delaware corporate law, specifically with respect to anti-takeover provisions.
4. The corporate reorganization had no effect on the substance of the trade or business transacted by petitioner:
A. There was no change in ownership. All shares of Caterpillar Tractor Co. common stock were converted to shares of petitioner's common stock, with certificates representing shares of common stock of Caterpillar Tractor Co. deemed for all purposes to represent shares of petitioner's common stock;
B. The officers and directors of Caterpillar Tractor Co. continued as the officers and directors of petitioner;
C. The bylaws of Caterpillar Tractor Co. continued in effect as the bylaws of petitioner;
D. No distributions or other dispositions of any property were made by reason of the reorganization. All property of Caterpillar Tractor Co. became property of petitioner. Petitioner succeeded to all rights, privileges, powers, and property, including without limitation all rights, privileges, franchises, patents, trademarks, licenses, registrations, and other assets of every kind and description of Caterpillar Tractor Co. Petitioner assumed all the assets and liabilities of Caterpillar Tractor Co.;
E. There was no change to the product lines and operations of the business enterprise;
F. Petitioner continued to compare its operations and financial performance to Caterpillar Tractor Co.'s historical performance;
G. Petitioner maintained Caterpillar Tractor Co.'s federal identification number.
1. Petitioner is a Delaware corporation engaged in the business of designing, manufacturing, and marketing, in Wisconsin and elsewhere, earthmoving, construction, and materials-handling machinery and related parts and equipment, as well as engines for such machinery and other applications.
2. For federal income tax purposes, the above transaction constituted a non-taxable reorganization under IRC section 368(a)(1)(F), which is defined as a "mere change in identity, form, or place of organization, however effected."
3. For federal income tax purposes, petitioner succeeded to and took into account the tax attributes of Caterpillar Tractor Co. pursuant to IRC section 381.
4. Caterpillar Tractor Co. sustained Wisconsin net business losses in 1982, 1983, and 1984 in the total amount of $12,507,684 (as adjusted pursuant to respondent's office audit). For Wisconsin franchise tax purposes, Caterpillar Tractor Co. carried forward and used $1,771,409 of the net business loss in 1985 (pursuant to its 1985 amended return). Caterpillar Tractor Co. carried forward net business losses of $10,736,275 (as adjusted) to 1986.
5. Petitioner filed Wisconsin corporate franchise tax returns for each of the tax years 1986 through 1990. In these returns, petitioner offset its Wisconsin net business income for each of the subject tax years with Wisconsin net business losses carried forward from tax years 1982 through 1984. The amounts of these offsets as adjusted pursuant to respondent's office audit adjustments are:
Tax Year Offsets per Return Offsets as Adjusted
1986 $ 556,616 $ 372,565
1987 993,079 1,089,409
1988 1,597,382 1,676,938
1989 565,257 767,762
1990 391,447 266,121
1. Respondent issued a notice of field audit action and attached field audit report to petitioner on November 16, 1992, assessing additional Wisconsin franchise tax and interest against petitioner for 1986 through 1990.
2. Among other things, respondent determined that for 1986 through 1990, the net business losses incurred by Caterpillar Tractor Co. could not be carried forward as offsets against the income of Caterpillar Inc. Thus, respondent disallowed petitioner the offsets for net business loss carry-forwards from tax years 1982 through 1984.
3. Respondent allowed $198,806 of the loss to be offset against Caterpillar Tractor Co.'s 1986 income for that portion of the tax year prior to the corporate reorganization. Respondent disallowed the carry over of the remaining Wisconsin net business loss of $10,537,469 by petitioner for all subsequent tax years because of the corporate reorganization in 1986.
4. Petitioner filed a timely petition for redetermination dated January 15, 1993, objecting to certain determinations made by respondent in its notice of field audit action and field audit report.
5. Respondent issued a determination dated March 19, 1997, granting in part and denying in part petitioner's petition for redetermination.
6. On May 8, 1997, petitioner filed a timely petition for review with the Commission.
7. Petitioner has conceded issues relating to foreign source interest and royalty income that had been raised in the petition for review.
8. There remain two issues for the Commission, one pertaining to 1986 and the other pertaining to 1987 through 1990:
A. Whether the Wisconsin net business losses for tax years 1982 through 1984 sustained by Caterpillar Tractor Co. prior to its merger into petitioner on May 8, 1986, may be carried forward to offset Wisconsin net business income for the tax year 1986 pursuant to section 71.06(1) of the 1985-86 Statutes.
B. Whether the Wisconsin net business losses for tax years 1982 through 1984 sustained by Caterpillar Tractor Co. prior to its merger into petitioner on May 8, 1986, may be carried forward to offset Wisconsin net business income for the tax years 1987 through 1990 pursuant to sections 71.26(3)(n) and (4) of the 1987-88 Statutes.
1. If the answers to both issues stated above are "yes," then the amount of the Wisconsin net business loss carryforward allowable to petitioner in each of the taxable years at issue is:
Wisconsin Net Business
Tax Year Loss Allowable
1986 $ 372,565
CONCLUSIONS OF LAW
1. Petitioner is not entitled to deduct losses incurred by Caterpillar Tractor Co. with respect to that portion of 1986 following the May 8, 1986, corporate reorganization, because petitioner is not the corporation that incurred the losses.
2. Petitioner may deduct losses incurred by Caterpillar Tractor Co. with respect to 1987 through 1990, because the federalization of IRC section 381 is not limited to corporate reorganizations occurring after January 1, 1987.
Tax Year 1986
The first issue involves tax year 1986, the year before the federalization of Wisconsin's corporate and franchise tax took effect. The Commission must decide if petitioner could carry forward and deduct losses incurred by Caterpillar Tractor Co. for that portion of 1986 following the corporate reorganization that occurred on May 8, 1986.
For more than 40 years, the Wisconsin courts and the Commission have debated the ability of one corporation to carry forward and deduct the losses of one or more prior corporations following a corporate reorganization. Our story begins with Fall River Canning Co. v. Dep't of Taxation, 3 Wis. 2d 632 (1958). In Fall River, five corporations were merged into a single corporation. Id. at 633. The resulting corporation took the name of Fall River Canning Co., the name of one of the predecessor corporations. Id. The year prior to the merger, each of the five predecessor corporations sustained a business loss. Id. Following the merger, the resulting corporation deducted losses carried forward from all five corporations. Id.
The Department of Taxation--respondent's predecessor--disallowed the losses to the extent they represented losses carried forward from four of the predecessor corporations. The Department permitted the losses carried forward from the Fall River Canning Co. The predecessor of the Commission, the Board of Tax Appeals, sustained the Department's action, as did the Dane County Circuit Court. The Supreme Court affirmed the Circuit Court's decision, holding that the four corporations (other than Fall River Canning Co.) ceased to exist when the merger occurred, and that there was no statute that afforded the resulting corporation the right to deduct losses sustained by the four predecessor corporations. Id. at 637-38. This rule has been called the "identical taxpayer" rule because the only taxpayer that may deduct a loss is the taxpayer that incurred it.
The Commission next revisited this issue in Clark Chevrolet, Inc. v. Dep't of Revenue, 8 WTAC 52 (1969). In Clark Chevrolet, a Delaware corporation was reorganized into a Wisconsin corporation and the name changed. Id. at 52. All assets of the predecessor corporation were transferred to the successor corporation. Id. The predecessor corporation sustained business losses in the year before the merger, which the successor corporation sought to deduct in the year following the merger. Id. at 53. The Commission affirmed respondent's denial of the deduction by the successor corporation. Id. The Commission, relying on Fall River, held that because the successor corporation was a legal entity distinct from the predecessor corporation, the successor could not deduct losses sustained by the predecessor. Id. The Commission reiterated the Fall River "identical taxpayer" holding: there is no statutory authority to permit a corporation to deduct a loss sustained by another. Id.
In McHenry Sand and Gravel Co., Inc, v. Dep't of Revenue, Wis. Tax Rptr. (CCH) ¶ 202-667 (1986), the Commission apparently had second thoughts about Clark Chevrolet and the "identical taxpayer" rule. In McHenry, an Illinois corporation formed a subsidiary organized under the laws of Delaware. Id. at p. 12,813. The Illinois corporation then merged into the Delaware subsidiary. Id. The resulting corporation had the same name as the predecessor corporation. The only difference was that the new corporation was organized under the laws of Delaware. Id. at 12,813-12,814. The Commission held that for purposes of the business loss carry forward provisions of section 71.06, the Delaware corporation was the same corporation as the Illinois corporation. Id. at 12,814. While the Commission's decision did not expressly overrule its decision in Clark Chevrolet, Commissioner Junceau, in a concurring opinion, argued that the Commission was in fact overruling Clark Chevrolet. Id. at pp. 12,814-12,816.
The Dane County Circuit Court reversed the Commission's decision in McHenry. Department of Revenue v. McHenry Sand and Gravel Co., Wis. Tax Rptr. (CCH) ¶ 202-769 (1986). The Circuit Court rejected the taxpayer's attempt to distinguish this case from Fall River. The taxpayer pointed out that Fall River involved five corporations merging into one corporation and this case involved only one corporation merging into another corporation. The taxpayer claimed this distinction should work in its favor. Id. at p. 13,091. The Circuit Court rejected this argument holding that the Commission lacked the authority to treat the merger of single corporations differently than the merger of multiple corporations without clear legislative direction. Id. at pp. 13,091-13,092.
The Commission next dealt with this issue in United States Shoe Corp. v. Dep't of Revenue, Wis. Tax Rptr. (CCH) ¶ 202-921 (1987). In U.S. Shoe, the taxpayer had a wholly owned subsidiary incorporated in Delaware. The taxpayer formed a wholly owned subsidiary in Ohio and merged the Delaware subsidiary into the Ohio subsidiary. The resulting corporate subsidiary was an Ohio corporation with the same name and business as the predecessor Delaware corporation. Id. at p. 13,647.
The Commission once again held that the successor corporation could deduct the losses of the predecessor corporation. Id. at pp. 13,648-13,649. The Commission reasoned that the statute involved had changed to permit such a deduction. At the time of Fall River, the relevant statute, section 71.06 of the 1949 Statutes, provided:
If a taxpayer ... sustains a net business loss, such loss ... may be offset against the net business income of the subsequent year and, if not completely offset by the net business income of such year, the remainder of such net business loss may be offset against the net business income of the following year. For purposes of this section, net business income shall consist of all the income attributable to the operation of a trade or business regularly carried on the by the taxpayer.... [Emphasis supplied.]
The Commission argued that the reference to "taxpayer" at the end of the quoted language made it clear that the only losses that could be deducted were those incurred by the taxpayer. U.S. Shoe, at p. 13,650. The Commission also noted that § 71.06 of the 1965 Statutes--the law applicable in Clark Chevrolet--contained similar language. U.S. Shoe, at p. 13,650. But, the Commission argued, 71.06 had been repealed and recreated in the 1975 legislative session. The resulting version of 71.06 of the 1977-78 Statutes provided in part:
... a corporation may offset against its Wisconsin net business income any Wisconsin net business loss sustained ... [which] net business income or loss shall consist of all the income attributable to the operation of a trade or business in this state. [Emphasis supplied.]
The Commission noted that the new statute omitted any reference to the corporation or taxpayer at the end of the quoted language that describes the income or loss at issue. The Commission read this omission to mean that the successor corporation could deduct the losses of the predecessor corporation because the successor continued the business or trade of the predecessor. U.S. Shoe, at p. 13,652. This test is referred to as the "continuity of business enterprise" rule.
The Dane County Circuit Court again reversed the Commission. Dep't of Revenue v. United States Shoe Corp., Wis. Tax Rptr. (CCH) ¶ 203-039 (1989). The Circuit Court found nothing in the language or history of the changes to section 71.06 to justify a departure from the holding of Fall River. Id. at p. 14,180.
The Court of Appeals went further in rejecting the Commission's reasoning. Dept. of Revenue v. U.S. Shoe Corp., 158 Wis. 2d 123 (Ct. App. 1990). The Court of Appeals conceded that section 71.06 was ambiguous, and investigated the legislature's intent in the repeal and recreation of this section. The Court of Appeals concluded that there was no legislative intent to alter the "identical taxpayer" rule enunciated in Fall River. Id. at 136. The Court of Appeals went on to reject the "continuity of business enterprise" rule the Commission applied in U.S. Shoe:
However, if the Fall River "identical taxpayer" rule is to be abandoned or modified, the supreme court or the legislature must act. Neither has done so.
Id. at 137.
Notwithstanding the fact that the Commission's decisions in both McHenry and U.S. Shoe were reversed, petitioner urges the Commission to follow the reasoning of these two cases. Petitioner argues that the Commission was correct in concluding that the 1975 amendments to section 71.06 changed the "identical taxpayer" standard enunciated in Fall River to the "continuity of business enterprise" test that has been adopted by federal courts.
In coming to this conclusion, petitioner argues that the Commission may ignore the Court of Appeals' rejection of the "continuity of business enterprise" rule in U.S. Shoe because, petitioner claims, this portion of the Court of Appeals decision was dictum. How petitioner can reach this conclusion is a mystery. The Commission's decision in U.S. Shoe was based on the premise that the 1975 revisions to section 71.06 evinced the legislature's intent to adopt the "continuity of business enterprise" rule. U.S. Shoe, ¶ 202-921, at p. 13,651. The Court of Appeals held exactly the opposite. Since this issue was central to the Commission's decision in U.S. Shoe, the Court of Appeals' holding to the contrary cannot be dictum.
Petitioner goes on to argue that it matters not whether the instant case is governed by the "identical taxpayer" rule or the "continuity of business enterprise" rule because petitioner is identical to Caterpillar Tractor Co. Petitioner notes that in every respect, except name and state of incorporation, petitioner and Caterpillar Tractor Co. are the same. The Commission will not engage in such verbal gymnastics to sidestep 40 years of case law recited in the foregoing pages. When Caterpillar Tractor Co. merged into petitioner, the result was a new and different corporate entity. To hold otherwise would be to depart from the "identical taxpayer" rule of Fall River. As the Court of Appeals concluded in U.S. Shoe, the Commission may not depart from the "identical taxpayer" rule until the legislature or Supreme Court indicate otherwise. Therefore, we conclude that petitioner is not entitled to deduct losses incurred by Caterpillar Tractor Co. during that portion of 1986 following the May 8, 1986, merger.
Tax Years 1987-90
In the 1987-89 budget act--1987 Wisconsin Act 27 ("Act 27")--the legislature federalized Wisconsin corporate income and franchise tax. As a result of Act 27, Wisconsin's corporate income and franchise tax adopted most of the provisions of IRC section 381. Wis. Stat. § 71.26(3)(n) (1987-88).(1) Section 381 provides that successor corporations take into account, among other things, net operating loss carryovers of a predecessor. The federalization of the corporate income and franchise tax took effect with tax year 1987.
Respondent concedes that, had the corporate reorganization at issue in this case occurred on or after January 1, 1987, petitioner would be able to deduct losses of Caterpillar Tractor Co. However, respondent relies on the language from Act 27 governing the initial applicability of the adoption of IRC section 381:
The treatment of sections ... 71.02(1) ... (bg) ... of the statutes and the repeal of section 71.04 of the statutes first apply to taxable year 1987.
Act 27, § 3203(47)(y). Respondent argues that this language clearly and unambiguously limits the availability of section 381 to mergers occurring in tax year 1987 or thereafter. Respondent further argues that, even if the quoted language were ambiguous, the familiar rules of statutory construction mandating the strict construction of deduction statutes prevent the Commission from allowing petitioner to deduct the losses of Caterpillar Tractor Co.
We conclude that the language of section 3203(47)(y) is ambiguous since it does not completely address the initial applicability of the federalization of IRC section 381. Specifically, the language of section 3203(47)(y) does not tell us whether the federal treatment is limited to corporate reorganizations in 1987 or thereafter. Because the language could be understood in two different senses by reasonably well-informed persons, section 3203(47)(y) is ambiguous. See Wagner Mobil, Inc. v. City of Madison, 190 Wis. 2d 585, 592 (1995).
Ordinarily, to the extent there is any ambiguity in the statute that grants a deduction, it is to be strictly construed against granting the deduction. Department of Revenue v. Greiling, 112 Wis. 2d 602, 605 (1983). However, the interpretation of the statute need not be the narrowest possible or unreasonable. Id.
Reviewing other portions of section 3203(47) casts doubt on the reasonableness of construing section 3203(47)(y) to apply only to mergers occurring after January 1, 1987. Several provisions in section 3203(47) provide that tax changes in Act 27 take effect upon specific events and not simply apply in a particular year.(2) This strongly suggests that had the legislature wanted to limit the treatment of IRC section 381 to corporate reorganizations occurring after January 1, 1987, it would have done so.
This conclusion is buttressed by the Supreme Court's decision in Lincoln Savings Bank, S.A. v. Dep't of Revenue, 215 Wis. 2d 430 (1998). In Lincoln Savings, the Supreme Court construed another transition provision that related to the federalization of the corporate income and franchise tax in Act 27. In Lincoln Savings, the issue was whether section 3047(1)(a) of Act 27 permitted the taxpayer to make federalized adjustments to its bad debt reserve going back only to 1962 (respondent's position) or prior to 1962 (taxpayer's position). Id. at 440. The majority opinion held that the transition rule was unambiguous in permitting the taxpayer the relief it sought. Id. at 449-50.
The most important feature of the Lincoln Savings decision was that four justices--a majority of the Court--joined in a concurring opinion that would have held the transition rule was ambiguous but, nevertheless, was to be construed in the taxpayer's favor. Id. at 450-55. The concurring justices concluded that even though the transition rule could reasonably be read to favor either respondent or the taxpayer, the rule should be read to favor the taxpayer because of the legislature's ultimate goals of federalizing Wisconsin corporate income and franchise tax and ameliorating the impact of changing to the post-1986 system of computing Wisconsin taxable income. Id. at 454.(3)
Both Lincoln Savings and the instant case are identical in that they both involve the treatment of deductions created by the federalization of the corporate income and franchise tax by Act 27. The concurring justices could have relied on rules mandating the strict construction of deduction statutes. They did not, because of the legislature's goal in federalizing corporate income and franchise taxes. Respondent's construction of section 3203(47)(y) would perpetuate for years the disparate state and federal tax treatment of petitioner's losses.
We conclude that to read section 3203(47)(y) to limit the treatment of IRC section 381 only to mergers occurring after January 1, 1987, is an unreasonably narrow reading of this provision and a reading that is at odds with the legislature's goal in federalizing the corporate income and franchise tax.
IT IS ORDERED
That respondent's action on the petition for redetermination is modified to permit petitioner to deduct losses carried forward from Caterpillar Tractor Co. for 1987 through 1990 and, as modified, is affirmed.
Dated at Madison, Wisconsin, this 25th day of March, 1999.
WISCONSIN TAX APPEALS COMMISSION
Mark E. Musolf, Chairperson
Don M. Millis, Commissioner
(Concurs in part and dissents in part)
Thomas M. Boykoff, Commissioner
ATTACHMENT: "NOTICE OF APPEAL INFORMATION"
COMMISSIONER BOYKOFF, DISSENTING IN PART:
I agree with Conclusion of Law 1. However, I dissent from Conclusion of Law 2 for the reasons stated below.
The applicability provision of 1987 Wisconsin Act 27, Section 3203(47)(y) is not ambiguous. It states: "The treatment of section ... 71.02(1) ... (bg) ... of the statutes first appl[ies] to taxable year 1987." How much clearer and direct can the statement be?
The majority's opinion (page 14) states: "Respondent argues that this language clearly and unambiguously limits the availability of section 381 to mergers occurring in the tax year 1987 or thereafter." This, too, is a clear and unambiguous restatement of the above statutory language.
The majority then concludes (page 15) that the above quoted Budget Act language is ambiguous since it does not "completely" address the initial applicability of the adopted version of section 381. I disagree. The language plainly states that the statute, as affected in the Act, shall "first apply to taxable year 1987." Where is the ambiguity? Certainly not in the phrase "taxable year 1987". And how can the language be more "completely" stated? The statutory sentence is simple, complete, clear, and unambiguous.
Ironically, petitioner's brief contains a paragraph reading as follows (pages 15-16):
"Contrary to Respondent's position, nothing in sec. 71.26(3)(n) restricts its application to taxpayers whose mergers occurred in or after 1987. Rather, the provision of the 1987 Act which addresses its effective date states that '[t]he treatment [of the federalized statutes] first appl[ies] to taxable year 1987.' 1987 Wis. Act 27 § 3203(47)(y). If the legislature had intended to restrict the application of I.R.C. § 381 to mergers that occurred in 1987 or later, it easily could have done so through express statutory language. In the absence of such language, there is no basis for Respondent to deny Petitioner the benefit of Caterpillar Tractor's net loss carryforwards, at least beginning with taxable year 1987."
Petitioner is correct that nothing in § 71.26(3)(n) restricts its application to mergers which occurred during or after taxable year 1987. (See the majority's Footnote 1 on page 14). Petitioner is also correct that the applicability (or effective date) language is located, not in § 71.26(3)(n), but in 1987 Wis. Act 27, section 3203(47)(y). Petitioner then states that, if the legislature (and governor) intended to restrict the application of I.R.C. § 381 to mergers occurring in (tax years) 1987 or later, it could have done so through express statutory language. But the legislature has done so with the express statutory language which petitioner has quoted.
Concluding that the statute is ambiguous allows the majority to review extrinsic aids. One such aid is a case in which another applicability (effective date) provision is applied, Lincoln Savings Bank, S.A. v. DOR, 215 Wis. 2d 430 (1998). That case's analysis does not apply here. It is distinguishable from the current case on its facts: (1) because during the period examined, Lincoln did not change its corporate structure as Caterpillar Tractor Co. had; and (2) because the uniqueness of bad debt reserves required for savings and loan associations and other financial institutions is not the same as the proposed loss carry forward of the two consecutive corporations here.
The majority also seems to cite (page 15) one of respondent's arguments that the federalization (and its loss carry forward provisions) applies only to mergers occurring on and after January 1, 1987. This statement would be correct if petitioner's tax year is a calendar year (which it is). But the federalization provision may apply to a pre-January 1, 1987 merger if the merger date occurred during 1986, which falls within taxpayer's 1987 fiscal year (which is not a calendar year).
Ambiguity is suggested in the majority opinion by this provision's first applicability during the 1987 tax year, while other provisions within 1987 Wis. Act 27 take effect on the occurrence of an event (ex., the filing of a document). However, both methods are long accepted drafting mechanisms employed for different purposes; their use in the same Act does not necessarily create any ambiguity, especially here.
I would have Conclusion of Law 2 read:
"Petitioner may not deduct losses incurred by Caterpillar Tractor Co., petitioner's predecessor corporation, in tax years 1987 through 1990."
I would also have affirmed the respondent's action on the petitioner's petition for redetermination. Respectfully submitted:
Thomas M. Boykoff, Commissioner
April 23, 1999 Appealed to Dane County Circuit Court (Case No. 99CV0942)
1 Act 27 created section 71.02(1)(bg)15, which incorporated most of the provisions of IRC section 381. However, before the end of the 1987-88 legislative session, the Legislature repealed and recreated all of chapter 71, resulting in the replacement of section 71.02(1)(bg)15 with 71.26(3)(n). 1987 Wis. Act 312.
2 Certain changes in the homestead tax credit apply to claims first filed in 1988. Act 27, § 3203(47)(a). Changes in the proceeds of tax sales first apply to property acquired by counties after the effective date of Act 27. Id., § 3203(47)(c). Changes in deductibility of certain estate expenses first apply to deaths occurring after the effective date of Act 27. Id., § 3203(47)(em). Changes in certain delinquent payments first apply to notices given after the effective date of Act 27. Id., § 3203(47)(g). A certain use tax exemption first applies to property registered on the effective date of Act 27. Id., § 3203(47)(h). Changes in certain inheritance tax provisions apply to deaths occurring on the effective date of Act 27. Id., § 3203(47)(m). Changes to the treatment of certain interest income first apply to bonds issued after January 28, 1987. Id., § 3203(47)(o). Certain changes to contributions to cemeteries first apply to deaths occurring after the effective date of Act 27. Id., § 3203(47)(x). Federalization of certain depreciation provisions with regard to corporations applies to property first placed into service on January 1, 1987. Id., § 3203(47)(za). Changes to certain provisions relating to inheritance and gift taxes first apply to transfers because of deaths occurring on and gifts made on January 1, 1992; other changes for the same tax apply to to transfers because of deaths occurring on and gifts made on January 1, 1988. Id., § 3203(47)(zf). Changes to certain basis adjustments first apply to transfers because of deaths occurring on the effective date of Act 27. Id., § 3203(47)(zg). Changes to certain provisions applying to small business stock first apply to stock acquired 30 days after the effective date of Act 27. Id., § 3203(47)(zpa).