Chase Brass & Copper Co. v. Franchise Tax Board

Franchise Tax Board of the State of California (herein, the Board) appeals from a portion of a judgment in the amount of $231,257.32 plus interest, which was awarded to plaintiff in this lawsuit to recover taxes paid under protest. The taxes are upon the franchise to do business in California during the years 1954, 1955 and 1956; but in order to make the reading easier, operations and relationships among companies are sometimes narrated, in this opinion, in the present tense.

Plaintiff, Chase Brass and Copper Co., Incorporated, is a wholly owned subsidiary of Kennecott Copper Corporation. The principal question is whether plaintiff’s business is unitary or nonunitary with Kennecott, and a lesser question is whether plaintiff’s business is unitary with any of Kennecott’s other subsidiary corporations. If the business be unitary, a much larger franchise tax would be imposed than if the business be nonunitary. It is not always unfavorable as to tax for a corporation to conduct a unitary business; for example, in the leading cases of Superior Oil Co. v. Franchise Tax Board, 60 Cal.2d 406 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ], and Honolulu Oil Corp. v. Franchise Tax Board, 60…