Barclays Bank International Limited v. Franchise Tax Board

In this case we originally concluded that California’s unitary tax method of worldwide combined reporting (based on Rev. & Tax. Code, §§ 25101, 25120-25139), as applied to foreign-based unitary corporate groups, was unconstitutional under the foreign commerce clause in light of the “one-voice” component of judicially established dormant foreign commerce clause analysis. (U.S. Const., art. I, § 8, cl. 3; Japan Line, Ltd. v. County of Los Angeles (1979) 441 U.S. 434 [ 60 L.Ed.2d 336 , 99 S.Ct. 1813 ]; Container Corp. v. Franchise TaxBd. (1983) 463 U.S. 159 [ 77 L.Ed.2d 545 , 103 S.Ct. 2933 ]; Wardair Canada v. Florida Dept. of Revenue (1986) 477 U.S. 1 [ 91 L.Ed.2d 1 , 106 S.Ct. 2369 ].) In Barclays Bank Internat. Ltd. v. Franchise Tax Bd. (1992) 2 Cal.4th 708 [ 8 Cal.Rptr.2d 31 , 829 P.2d 279 ], the California Supreme Court disagreed with our conclusion and remanded this matter to us. Pursuant to that remand, we have been directed to consider whether the administrative burden for a foreign-based unitary corporate group (such as exemplified by plaintiffs) in complying with worldwide combined reporting violates either the nondiscrimination component of dormant commerce…