Court Opinion

ID: 9427270
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:20:14.897523+00
Date Added: 2024-06-11T17:23:05.721323
License: Public Domain

Mr. Justice Brennan,
dissenting.
I agree with the Court that, for purposes of constitutional review, there is no distinction between a corporate income tax and a gross-receipts tax. I do not agree, however, that Iowa’s single-factor sales- apportionment formula meets the Commerce Clause requirement that a State’s taxation of interstate business must be “fairly apportioned to the commerce carried on within the taxing state.” Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 256 (1938). As I have previously explained:
“[Where a sale] exhibits significant contacts with more than one State ... it is the commercial activity within the State, and not the sales volume, which determines the State’s power to tax, and by which the tax must be apportioned. While the ratio of in-state to out-of-state sales is often taken into account as one factor among others in apportioning a firm’s total net income, see, e. g., the description of the ‘Massachusetts Formula’ in Note, 75 Harv. L. Rev. 953, 1011 (1962), it nevertheless remains true that *282if commercial activity in more than one State results in a sale in one of them, that State may not claim as all its own the gross receipts to which the activity within its borders has contributed only a part. Such a tax must be apportioned to reflect the business activity within the taxing State.” General Motors Corp. v. Washington, 377 U. S. 436, 450-451 (1964) (dissenting opinion).
I would therefore reverse.