Barclay's Bank, PLC v. Franchise Tax Bd. of California (1993)
- Docket
- 92-1384
- Decided
- 1993-01-01
Summary
Question: 1) Does a state violate the Due Process Clause by accepting "reasonable approximations" of financial data? 2) By requiring multinational corporations to provide exhaustive financial information to calculate taxes, does a State impose a disproportionately large compliance burden upon the corporation and thereby violate the anti-discrimination requirement of the Commerce Clause? Conclusion: Justice Ruth Ginsburg wrote the opinion for a 7-2 Court. (1) The Court dismissed the alleged Due Process violation because a corporation could take action against the Tax Board if it felt the approximated amount was inaccurate. (2) Reasoning that the use of "reasonable approximations" minimized a multinational's compliance burden, the Court also dismissed the alleged Commerce Clause violation. The Court recognized that the "worldwide combined reporting" method carried a risk of double taxation by both the state and the federal government, but reasoned that this did not violate the Commerce Clause because every other method employed by the state to tax foreign commerce carried the same risk. Also, the Court found no "specific indications of congressional intent" to enforce uniformity in taxation of foreign commerce by preempting the California tax laws.