Common use of Straddle Period Tax Allocation Clause in Contracts

Straddle Period Tax Allocation. Navy and Red Lion shall take all actions necessary or appropriate to close the taxable year of Red Lion and each Red Lion Entity for all Tax purposes as of the close of the Closing Date to the extent required or permitted by applicable Law. If applicable Law does not require or permit Red Lion or a Red Lion Entity, as the case may be, to close its taxable year on the Closing Date, then the allocation of income or deductions required or permitted to determine any Taxes or other amounts attributable to the portion of the Straddle Period ending on, or beginning after, the Closing Date shall (i) in the case of Taxes that are based upon or related to income or receipts or imposed on a transactional basis, be deemed equal to the amount that would be payable if the Tax year or period ended on the Closing Date; and (ii) in the case of other Taxes, be allocated pro rata per day between the portion of the period ending on the Closing Date and the portion of the period beginning the day after the Closing Date; provided that exemptions, allowances or deductions that are calculated on an annual or periodic basis shall be allocated between such portions in proportion to the number of days in each such portion.