Income and Franchise Tax

Court Decisions

• Container Corp. v. Franchise Tax Board, 463 U.S. 159 (1983) - Court upheld California's unitary tax method.
• Complete Auto Transit, Inc. v. Tracy, Chairman, Mississippi Tax Commission, 430 U.S. 274 (1977)
• Geoffrey, Inc. v. South Carolina Tax Commission, 437 S.E. 2d 13 (South Carolina Supreme Court, 1993), cert. denied by U.S. Supreme Court, 114 S.Ct. 50 (1993). - Delaware holding company that owned only intangible personal property used in South Carolina was subject to South Carolina income tax.
• Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434 (1979) - Limitation on California's ability to tax companies engaged in foreign commerce.
• National Credit Union Administration v. First National Bank & Trust Co., No. 96-483 (1998) - Limitation on how tax-advantaged credit unions can define the common bonds for admitting members.
• Trinova Corp. v. Michigan Department of Revenue, 498 U.S. 358 (1991)
• Wisconsin Department of Revenue v. William Wrigley, Jr., Co., 505 U.S. 214 (1992) - To lose the Public Law 86-272 immunity from state income tax , the taxpayer's activity must establish a nontrivial additional connection with the taxing state.

Statutes

•  Public Law 86-272 (15 U.S.C. sec. 381) - States are prohibited from imposing state income taxes on entities whose sole connection within a state is the solicitation of orders or sales of tangible personal property.
•  U.S. Constitution, Article I, section 10 - Limitations on the states' rights to tax interstate commerce.
•  U.S. Constitution, Fourteenth Amendment - Due Process Clause.

Texas Franchise Tax Portfolio

• Texas Franchise Tax, Portfolio #2400, authored by Eric L. Stein, provides a detailed discussion on a wide range of issues dealing with the taxation of corporate entities in Texas and addresses important considerations for all business enterprises doing business in the state. The Portfolio is available in print, on CD-ROM, and the Internet at http://www.bna.com/products/tax/tmil.htm. A subscription to Tax Management Portfolios on the Web must be purchased to view the library of Portfolios available at that site, or you may register for a free 30-day trial subscription.