(dissenting). Again, as in the second Woolworth case, F. W. Woolworth Co. v. Commissioner of Taxes, 133 Vt. 93, 328 A.2d 402 (1974), I am compelled to dissent from the views of my brothers with respect to the inclusion of “gross-up” in the taxable income of the taxpayer. With the other points covered in the majority opinion I have no disagreement.
Albeit vainly, I must reiterate that an item never actually or constructively received is not income, even though it may “confer an economic benefit.” Income must confer a benefit, but all benefits are not income. The interest received by a bank from its mortgages confers “an economic benefit” on bank depositors, in that it permits payment of interest on their deposits. So do dividends received by a bank on its owned securities. But no court, so far as I know, has ever held these items to be income to the depositor.
Nor am I persuaded otherwise by the statement of the majority that in 1966 the Legislature chose to impose a tax on that benefit, and in 1971 chose not to impose a tax on that benefit. Such a statement simply begs the question. More accurately put, in 1966 the Legislature enacted a statute which the Commissioner of Taxes interpreted to include “gross-up” as taxable income, and in 1971, when this' was brought to their attention,, passed, an amendment expressly negativing that interpretation.
“Gross-up” is never received by the..corporate taxpayer, either actually or constructively. It is tax paid by the foreign corporation, for its own account, to the foreign government. It cannot be equated with tax withheld and paid to the foreign govérnment for the account of the U.S. taxpayer; this is income to the U.S. taxpayer because it is constructively received, just as are taxes withheld from wages in this country. Nor can it be equated with dividends from the foreign subsidiáry, as these are actually received by the U.S. taxpayer.
The majority opinion purports to “conform” Vermont’s corporate income tax to the U.S. Internal Revenue Code. But in the niceties of verbiage it overlooks the hard substance. *140The Internal Revenue Code tells the corporate taxpayer that if it elects .the tax advantage of taking credit for “gross-up” against its tax, it must add to its gross income computation an equivalent amount. In the Woolworth cases, and here, this Court tells the taxpayer that it must add this amount to its Vermont gross income computation even though it receives no equivalent credit whatever against its tax. What the majority opinion really does is add to the taxpayer’s actual income its federal income tax credit, because this, and not the foreign tax paid by its subsidiary, is the “benefit” to it the opinion speaks of. Recognizing, as the Legislature appears to have done, that even a large corporation may be the recipient of an injustice, I dissent.