Supreme Court of California

In a companion case to Microsoft Corp. v. Franchise Tax Bd., __ Cal.4th ___ (Aug. 17, 2006, S133343), the court finds that under the Uniform Division of Income for Tax Purposes Act (UDITPA), a repurchase agreement is analogous to a secured loan for UDITPA purposes and thus only the interest received should be treated as gross receipts for purposes of allocating a company's income among the various states.

Appellate Information

• Decided 08/17/2006
• Published 08/17/2006

Judges

• WERDEGAR, J.

Court

• Supreme Court of California

Counsel

• For Appellant:
  
• Ajalat, Polley & Ayoob, Charles R. Ajalat, Glendale, and Christopher J. Matarese for Plaintiffs and Appellants., Morrison & Foerster, Eric J. Coffill and Carley A. Roberts, Sacramento, for Toys“ R” Us, Inc., and Affiliates and The Limited Stores, Inc., and Affiliates as Amici Curiae on behalf of Plaintiffs and Appellants., Pillsbury Winthrop, Jeffrey M. Vesely, San Francisco, Kerne H.O. Matsubara, Richard E. Nielsen and Annie H. Huang, San Francisco, for Council on State Taxation as Amicus Curiae on behalf of Plaintiffs and Appellants., Nielsen, Merksamer, Parrinello, Mueller & Naylor, John E. Mueller, Mill Valley, and Eric J. Miethke, Sacramento, for California Business Coalition as Amicus Curiae on behalf of Plaintiffs and Appellants., Sutherland Asbill & Brennan and Kendall L. Houghton for Tax Executives Institute, Inc., as Amicus Curiae on behalf of Plaintiffs and Appellants., Michael P. Boyle, Michael J. Bernard, Kurt A. Lamp;  Preston Gates & Ellis, James P. Kleier, Brian W. Toman, Charles R. Zubryzcki;  Baker & McKenzie and J. Pat Powers, Palo Alto, for Microsoft Corporation as Amicus Curiae on behalf of Plaintiffs and Appellants.


• For Appellees:
  
• Bill Lockyer, Attorney General, W. Dean Freeman and Stephen Lew, Deputy Attorneys General, for Defendant and Appellant., Frank Katz and Shirley Sicilian for Multistate Tax Commission as Amicus Curiae on behalf of Defendant and Appellant.