Allied-signal, Inc., As Successor-in-interest to the Bendix Corporation v. Director, Division of Taxation (504 U.S. 768)
U.S. Supreme Court · decided June 15, 1992 · Supreme Court Database (Spaeth)
- Citation
- 504 U.S. 768 · 112 S. Ct. 2251
- Decided
- June 15, 1992
- Term
- October Term 1991
- Vote
- 5–4
- Majority author
- Justice Kennedy
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice Kennedy delivered the opinion of the Court. Among the limitations the Constitution sets on the power of a single State to tax the multistate income of a nondomicil-iary corporation are these: There must be “a ‘minimal connection’ between the interstate activities and the taxing State,” Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S. 425, 436-437 (1980) (quoting Moorman Mfg. Co. v. Bair, 437 U. S. 267, 273 (1978)), and there must be a rational relation between the income attributed to the taxing State and the intrastate value of the corporate business. 445 U. S., at 437. Under our precedents, a State need not attempt to isolate the intrastate income-producing activities from the rest of the business; it may tax an apportioned sum of the corporation’s multistate business if the business is unitary. E. g., ASARCO Inc. v. Idaho Tax Comm’n, 458 U. S. 307, 317 (1982). A State may not tax a nondomiciliary corporation’s income, however, if it is “derive[d] from ‘unrelated business activity’ which constitutes a ‘discrete business enterprise.’” Exxon Corp. v. Department of Revenue of Wis., 447 U. S. 207, 224 (1980) (quoting Mobil Oil, supra, at 442, 439). This case presents the questions: (1) whether the unitary business principle remains an appropriate device for ascertaining whether a State has transgressed its constitutional limitations; and if so, (2) whether,…
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