Citicorp

Citicorp North America, Inc. (Citicorp) and its affiliates appeal from a decision of the superior court in favor of the Franchise Tax Board (FTB) in this action for refund of corporate franchise taxes. We affirm the trial court’s judgment. The FTB properly included the California sales of Citicorp’s Citibank (South Dakota), a member of the unitary corporate group, in calculating the amount of income apportionable to California operations under the rule in effect at the time Citicorp filed its amended returns. We also reject Citicorp’s contention that the gain on sales of real property, including its corporate headquarters, was not business income.

Background

The facts of this case are not in dispute. The parties submitted a joint stipulation and exhibits to the trial court regarding the relevant facts, which are summarized as follows. Citicorp is a Delaware corporation, with its principal place of business in New York. Citicorp and its affiliate corporations are part of a worldwide financial services organization. Citicorp directly and indirectly owns several hundred foreign and domestic corporations that offer lending, deposit taking, investment management and other…