Gm Won’t Have To Pay Taxes On Eds Spinoff

General Motors Corp. said Friday the Internal Revenue Service would consider the proposed spinoff of its EDS Corp. computer services unit as a tax-free transaction.

The carmaker said it received a ruling from the IRS that it wouldn’t have to pay taxes on the transaction.

Under the plan, shareholders of GM’s Class E stock, which represents the earnings of the EDS unit, would exchange their shares for EDS common stock in a move that would create a $21 billion company.

“GM has said all along that it was contingent on it being tax-free,” said EDS spokesman Tony Good.

EDS, based in Plano, Texas, is the world’s biggest manager of complex computer systems for other companies.