A Virginia trial court held that royalties paid to related members that are reported to, but not taxed by, other states do not qualify for the exception to the state’s corporate income tax addback statute. In granting summary judgment in favor of the Virginia Department of Taxation, the court said that intangible expenses paid to related members must be added back to a taxpayer’s federal taxable income unless the payments to the related member are “subject to a tax based on or measured by net income or capital.” Construing this exception narrowly against the taxpayer, the court equated the statute’s “subject to” language to actual taxation. Kohl’s Dep’t Stores, Inc. v. Va. Dep’t of Taxation, No. CL12-1774 (Va. 13th Jud. Cir. Ct. Feb. 3, 2016).