ROCHESTER, NY, UNITED STATES, January 5, 2026 /EINPresswire.com/ — The American College of Tax Counsel (the “College”) announces the filing on December 31, 2025 of an amicus brief with the United States Supreme Court in the case of State of Florida (“Florida”) v. State of California and Franchise Tax Board of California (“California”), No. 22O163. Because it believes that the Supreme Court should hear and decide this case to bring much-needed clarity to an important, underlying issue of multistate taxation, the College supports Florida’s motion with respect to invoking the Supreme Court’s original jurisdiction over disputes between or among states. However, the College takes no position on the merits of Florida’s requested remedy.
Background
On October 28, 2025, Florida filed a motion for leave to file a bill of complaint and proposed bill of complaint in the United States Supreme Court challenging a California corporate income tax apportionment regulation (the “Special Rule”), alleging that the regulation unconstitutionally discriminates against out-of-state commerce.
Under established constitutional norms for multistate taxation, when a corporation generates business income in multiple states, each state may tax the portion reasonably related to the activities conducted within that state. In broad terms, under the single-sales factor approach employed by California and many other states, a corporation’s income tax liability to the state is determined by multiplying the total apportionable business income by the percentage of total sales occurring within the state. However, the Special Rule in California carves out substantial, infrequent sales such as facility sales, patent sales, or sales of affiliate stock from the numerator and denominator of the California sales factor while still including the income and gain from those sales in the California tax base of apportionable business income. Florida challenges this feature of California’s apportionment regime on the grounds that the Special Rule severs the constitutionally required relationship between the tax base and in-state activities and, in doing so, imposes constitutionally impermissible extraterritorial taxation.
Various state appellate and supreme courts, having analyzed provisions similar to California’s Special Rule, are divided on the constitutionality of such provisions.
The College’s Brief
The College’s amicus brief supports Florida’s motion to file a bill of complaint in the Supreme Court, so that the Supreme Court can review and decide the constitutional questions presented regarding fair apportionment and factor representation, which bear on predictability and uniformity in multistate taxation. In the College’s view, a decision by the Supreme Court would clarify the fairness norms of a permissible state appointment formula and resolve the split decisions among the state courts that have ruled on this issue.
The College’s brief in this case was prepared and filed by Lynn A. Gandhi and Elizabeth (Nevle) Gallio, of Foley & Lardner LLP. Thanking the drafters for their work on the brief, Michael J. Desmond, President of the College, noted that “the constitutionality of California’s Special Rule and similar provisions in other states’ income tax regimes is among the most impactful and pressing issues in multistate taxation today; only a decision by the United States Supreme Court can resolve the split among state courts and bring needed clarity to the area.”
About Amicus Briefs
A brief by Amicus Curiae (“friend of the court”), known familiarly as an amicus brief, allows a person or organization with a strong interest in or important views on the subject matter of a case to file a brief explaining those views and urging the court to rule in a manner consistent with those views. Amicus briefs are often filed in cases of broad public interest and are filed with the permission of the court.
About the American College of Tax Counsel
The American College of Tax Counsel, founded in 1981, is a nonprofit association of tax attorneys in private practice, law, business, and graduate school teaching positions, and government, who are recognized for their excellence in tax practice and their substantial contributions and commitment to the legal profession. One of the chief purposes of the College is to provide a mechanism for input by tax attorneys into the development of U.S. tax laws and policy. A Board of nineteen Regents serves as the governing body of the College, with one regent drawn from each of the thirteen federal judicial circuits, plus two at-large positions. The Board is rounded out by the four members of its Executive Committee—President, Vice President, Secretary-Treasurer, and Immediate Past President. The College can be found online at http://www.actconline.org.
Pamela Lyons
American College of Tax Counsel
+1 888-549-4177
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