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Copyright (c) 1994 The Vanderbilt University School of Law
Vanderbilt Journal of Transnational Law

Case Digest

November, 1994

27 Vand. J. Transnat'l L. 941


This Case Digest provides brief analyses of recent developments in international law. The Digest includes cases that establish legal principles and cases that apply established legal principles to new factual situations. The cases are grouped by topic and include references for further research.

i. Tax on Multinational Corporations

California Corporate Franchise Tax as Applied to Foreign Multinationals and Domestic Multinationals Is Constitutional and Does Not Violate Commerce Clause or Ability of Federal Government to "Speak With One Voice" in Foreign Relations. Barclays Bank PLC v. Franchise Tax Bd. of Cal., 114 S. Ct. 2268 (1994).

Barclays Bank PLC (Barclays), a United Kingdom corporation, is part of Barclays Group, a multinational banking enterprise. 1 Colgate-Palmolive Co. (Colgate) is based in the United States, but operates worldwide. 2 Both Barclays and Colgate have operations in California. 3

California assessed a corporate franchise tax against Barclays and Colgate, using an accounting method known as "worldwide combined reporting." 4 Barclays and Colgate sued California, alleging that the state's taxing scheme was unconstitutional. 5 In separate cases, on remand from the California Supreme Court, the California Court of Appeals found the worldwide combined reporting method to be constitutional. 6 The two cases were consolidated on appeal to the United States Supreme Court.

Barclays alleged that California's taxing scheme violated the Due Process Clause of the United States Constitution 7 because the scheme resulted in double international taxation. 8 In addition, Barclays argued that the corporate franchise tax violated the Commerce ...
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