unitary business principle in California

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

1981Code, § 25101, set out in fn. 1, ante; Honolulu Oil Corp. v. Franchise Tax Bd. (1963) 60 Cal.2d 417, 425 [ 34 Cal.Rptr. 552 , 386 P.2d 40 ]; Superior Oil Co. v. Franchise Tax Bd. (1963) 60 Cal.2d 406, 417 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ].) “[T]he linchpin of apportionability in the field of state income taxation is a unitary-business principle.” (Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. 425, 439 [ 63 L.Ed.2d 510, 522 ].) The fairness of allocating to California a just proportion of the profits earned from a unitary business 3 is settled.

1981Code, § 25101, set out in fn. 1, ante; Honolulu Oil Corp. v. Franchise Tax Bd. (1963) 60 Cal.2d 417, 425 [ 34 Cal.Rptr. 552 , 386 P.2d 40 ]; Superior Oil Co. v. Franchise Tax Bd. (1963) 60 Cal.2d 406, 417 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ].) “[T]he linchpin of apportionability in the field of state income taxation is a unitary-business principle.” (Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. 425, 439 [ 63 L.Ed.2d 510, 522 ].) The fairness of allocating to California a just proportion of the profits earned from a unitary business 3 is settled.

1981Code, § 25101, set out in fn. 1, ante; Honolulu Oil Corp. v. Franchise Tax Bd. (1963) 60 Cal.2d 417, 425 [ 34 Cal.Rptr. 552 , 386 P.2d 40 ]; Superior Oil Co. v. Franchise Tax Bd. (1963) 60 Cal.2d 406, 417 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ].) “[T]he linchpin of apportionability in the field of state income taxation is a unitary-business principle.” (Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. 425, 439 [ 63 L.Ed.2d 510, 522 ].) The fairness of allocating to California a just proportion of the profits earned from a unitary business 3 is settled.

1981Code, § 25101, set out in fn. 1, ante; Honolulu Oil Corp. v. Franchise Tax Bd. (1963) 60 Cal.2d 417, 425 [ 34 Cal.Rptr. 552 , 386 P.2d 40 ]; Superior Oil Co. v. Franchise Tax Bd. (1963) 60 Cal.2d 406, 417 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ].) “[T]he linchpin of apportionability in the field of state income taxation is a unitary-business principle.” (Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. 425, 439 [ 63 L.Ed.2d 510, 522 ].) The fairness of allocating to California a just proportion of the profits earned from a unitary business 3 is settled.

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

1992Although the taxpayer was able to isolate its foreign dividend income using separate accounting, the court observed that “the linchpin of apportionability in the field of state income taxation is the unitary business principle.” (Id., at p. 439 [ 63 L.Ed.2d at p. 522 ].) The divisibility of income produced by a separate accounting treatment, the court said, “may fail to account for contributions to income resulting from functional integration, centralization of management, and economies of scale ....

1981Code, § 25101, set out in fn. 1, ante; Honolulu Oil Corp. v. Franchise Tax Bd. (1963) 60 Cal.2d 417, 425 [ 34 Cal.Rptr. 552 , 386 P.2d 40 ]; Superior Oil Co. v. Franchise Tax Bd. (1963) 60 Cal.2d 406, 417 [ 34 Cal.Rptr. 545 , 386 P.2d 33 ].) “[T]he linchpin of apportionability in the field of state income taxation is a unitary-business principle.” (Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. 425, 439 [ 63 L.Ed.2d 510, 522 ].) The fairness of allocating to California a just proportion of the profits earned from a unitary business 3 is settled.

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2018The unitary business principle was developed to permit the states "to tax a corporation on an apportionable share of the *252 multistate business carried on in part in the taxing [s]tate." ( Allied-Signal v. Director, Div. of Taxation (1992) 504 U.S. 768 , 778, 112 S.Ct. 2251 , 119 L.Ed.2d 533 ( Allied-Signal ) [history of unitary business principle].) It protects an enterprise from being taxed for value not attributable to the state, while allowing the state to collect its fair share of taxes attributable to the enterprise's connection to the state. ( Ibid . ) Under this system, the interstat

2012(See Apple, Inc. v. Franchise Tax Bd. (2011) 199 Cal.App.4th 1, 8 [ 132 Cal.Rptr.3d 401 ].) We disagree and find federal law helpful as to the appropriate characterization of the transferred rights at issue here. 20 In sum, the trial court here erred in concluding that the OEM licenses pertained to the licensing of tangible personal property.

2012(See Apple, Inc. v. Franchise Tax Bd. (2011) 199 Cal.App.4th 1, 8 [ 132 Cal.Rptr.3d 401 ].) We disagree and find federal law helpful as to the appropriate characterization of the transferred rights at issue here. 20 In sum, the trial court here erred in concluding that the OEM licenses pertained to the licensing of tangible personal property.

2011(Container Corp. v. Franchise Tax Bd. (1983) 463 U.S. 159, 162-163 [ 77 L.Ed.2d 545 , 103 S.Ct. 2933 ].) A unitary business is one that receives income “from or attributable to sources both within and without the state . . . .” (§ 25101.) “A unitary business is generally defined as two or more business entities that are commonly owned and integrated in a way that transfers value among the affiliated entities.” (Citicorp North America, Inc. v. Franchise Tax Bd. (2000) 83 Cal.App.4th 1403, 1411, fn. 5 [ 100 Cal.Rptr.2d 509 ].) “A unitary business has been judicially defined as one in which the f

2011(Container Corp. v. Franchise Tax Bd. (1983) 463 U.S. 159, 162-163 [ 77 L.Ed.2d 545 , 103 S.Ct. 2933 ].) A unitary business is one that receives income “from or attributable to sources both within and without the state . . . .” (§ 25101.) “A unitary business is generally defined as two or more business entities that are commonly owned and integrated in a way that transfers value among the affiliated entities.” (Citicorp North America, Inc. v. Franchise Tax Bd. (2000) 83 Cal.App.4th 1403, 1411, fn. 5 [ 100 Cal.Rptr.2d 509 ].) “A unitary business has been judicially defined as one in which the f

1991Woolworth [Co. v. Taxation & Revenue Dept. (1982) 458 U.S. 354, 364 ( 73 L.Ed.2d 819, 827-828 , 102 S.Ct. 3128 )] a relevant question in the unitary business inquiry is whether 1 “contributions to income [of the subsidiaries] resulted] from functional integration, centralization of management, and economies of scale.” ’ [Citations.]” (Container Corp. v. Franchise Tax Bd., supra, 463 U.S. at pp. 178-179 [ 77 L.Ed.2d 561 -562], italics in original, fn. omitted.) 8 “ ‘Central accounting, for instance, may result in some savings, but in most instances the amount is trifling in comparison with the

1991Woolworth [Co. v. Taxation & Revenue Dept. (1982) 458 U.S. 354, 364 ( 73 L.Ed.2d 819, 827-828 , 102 S.Ct. 3128 )] a relevant question in the unitary business inquiry is whether 1 “contributions to income [of the subsidiaries] resulted] from functional integration, centralization of management, and economies of scale.” ’ [Citations.]” (Container Corp. v. Franchise Tax Bd., supra, 463 U.S. at pp. 178-179 [ 77 L.Ed.2d 561 -562], italics in original, fn. omitted.) 8 “ ‘Central accounting, for instance, may result in some savings, but in most instances the amount is trifling in comparison with the

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B

1981(See Butler Bros. v. McColgan (1942) 315 U.S. 501, 509 [ 86 L.Ed. 991, 997 , 62 S.Ct. 701 ]; El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 738 [ 215 P.2d 4 ], app. dism., 340 U.S. 801 [ 95 L.Ed. 589 , 71 S.Ct. 52 ]; Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 478 [ 183 P.2d 16 ]; Butler Bros. v. McColgan (1941) 17 Cal.2d 664, 677-678 [ 111 P.2d 334 ], affd. in 315 U.S. 501 [ 86 L.Ed. 991 , 62 S.Ct. 701 ]; Handlery v. Franchise Tax Bd., supra, 26 Cal.App.3d 970, 974 .) The propriety of applying the unitary concept in taxing foreign corporations was established in Butler B