Harley-Davidson

Harley-Davidson, Inc., and several of its subsidiaries (together, Harley-Davidson) sued the Franchise Tax Board (Board) for a tax refund. The trial court sustained the Board’s demurrer to Harley-Davidson’s commerce clause (U.S. Const., art. I, § 8, cl. 3) challenge to Revenue and Taxation Code provisions that allow intrastate unitary businesses to choose annually whether to compute their tax using the combined reporting method or the separate accounting method but require interstate unitary businesses to compute their tax using only the combined reporting method. We conclude the trial court erred in sustaining the demurrer because the statutory scheme facially discriminates on the basis of an interstate element in violation of the commerce clause. We will reverse the judgment in that respect and remand to the trial court to determine in the first instance whether the taxation scheme withstands strict scrutiny- — that is, whether it “ ‘advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.’ ” (Oregon Waste Systems, Inc. v. Department of Environmental Quality of Ore. (1994) 511 U.S. 93, 101 [ 128 L.Ed.2d 13 , 114…