McDonnell Douglas Corp. v. Franchise Tax Board

— The Franchise Tax Board of the State of California appeals from the judgment entered in favor of McDonnell Douglas Corporation on its complaint for refund of franchise taxes paid under protest. McDonnell Douglas cross-appeals from the trial court’s denial of its request for attorney fees expended in pursuing its complaint. We affirm the judgment.

Summary of Facts

Plaintiff and appellant McDonnell Douglas Corporation (MDC) is a Maryland corporation which manufactures commercial and military aircraft and aircraft parts. It sells its aircraft to an international market and owns a facility located in Long Beach. The majority of its commercial aircraft are delivered to the customers in Long Beach or at a facility in Yuma, Arizona. The customers then arrange for transportation of the aircraft.

MDC paid California franchise taxes on its business income for the tax years 1973 and 1974 and sought a refund for a portion of the total amount of taxes paid.

When its requests for refund were denied, MDC filed an action against defendant and respondent Franchise Tax Board (the Board) for a refund. MDC sought a refund of approximately $468,000 for 1973 and approximately $943,459…