Shell Oil Company v. Iowa Department of Revenue (488 U.S. 19)
U.S. Supreme Court · decided November 8, 1988 · Supreme Court Database (Spaeth)
- Citation
- 488 U.S. 19 · 109 S. Ct. 278
- Decided
- November 8, 1988
- Term
- October Term 1988
- Vote
- 9–0
- Majority author
- Justice Marshall
- Issue area
- Federalism
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice Marshall delivered the opinion of the Court. In this appeal, we must decide whether the Outer Continental Shelf Lands Act (OCSLA), 67 Stat. 462, 43 U. S. C. § 1331 et seq. (1982 ed. and Supp. Ill), prevents Iowa from including income earned from the sale of oil and gas extracted from the Outer Continental Shelf (OCS) in the apportionment formula it uses to calculate in-state taxable income. We hold that it does not. I Shell Oil Company (Shell) is a unitary business, incorporated in Delaware. Its activities include producing, transporting, and marketing oil and gas and the products that are made from them. Shell extracts oil and gas not only within various States but also on the OCS, which is defined by the OCSLA as all those submerged lands three or more geographical miles from the United States coastline. Between 1977 and 1980, the tax years at issue in this case, a portion of Shell’s gross revenues was derived from the sale of oil and gas extracted from the OCS and the sale of products made from OCS oil and gas. During the years at issue, Shell sold all of its OCS natural gas directly at the wellhead platform located above the OCS. Nearly all of its OCS crude oil, by contrast, was transferred via pipelines to the continental United States, where Shell either sold it to third parties or refined it. The refining process typically involves the commingling of OCS crude…
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