In its first decision on combined unitary reporting since Vermont adopted combined reporting in 2006, the Vermont Supreme Court held that the AIG insurance group was not unitary with its wholly owned ski resort subsidiary, Stowe Mountain Resort. Applying the U.S. Supreme Court’s test for unity articulated in Mobil Oil Corp. v. Comm’r of Taxes, 445 U.S. 425 (1980), the Vermont Supreme Court determined that Stowe was a distinct business operation from AIG, and there was not enough evidence to support a “linkage of economic realities” between Stowe’s operations in Vermont and AIG’s operations outside the state. First, the court determined there were no economies of scale between AIG’s insurance and financial services business and Stowe’s dissimilar ski resort business. Second, despite AIG being Stowe’s sole shareholder with the power to appoint AIG board members to Stowe’s board, the court held there was no centralization of management because Stowe did not have common purchasing, advertising or marketing with AIG. The evidence also failed to show that AIG’s control over appointments to Stowe’s board resulted in actual control over Stowe’s operations, because Stowe made its own operating decisions. Third, the court determined that AIG and Stowe were not functionally integrated because AIG and Stowe operated in different lines of business, were not part of a vertically integrated enterprise, and did not engage in joint purchasing or other common activities. The court also concluded that the financing Stowe received from AIG—Stowe’s sole lender—served an investment function rather than an operational function for AIG and noted that such intercompany financing alone, absent other indicia of unity, was not sufficient to warrant combination. While acknowledging AIG filed on a combined basis in 15 other jurisdictions, the court nevertheless found that such representations to other states “cannot create a unitary operation where it does not otherwise exist.” AIG Ins. Mgt. Serv. Inc. v. Department of Taxes, No. 2014-312 (Vt., November 20, 2015).