Corporate Tax Law Upheld; California’s high court affirms formulas used for out-of-state firms in challenges brought by GM and Microsoft.


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In back-to-back rulings in cases involving Microsoft Corp. and General Motors Corp., the court upheld state formulas for determining what non-California corporations pay in taxes.

A ruling against the state would have cost California’s treasury $500 million in refunds and $100 million annually in lost revenue, state officials said.

"This was a very big victory for the state," said Tom Dresslar, a spokesman for the California attorney general’s office. "If the state had lost these cases, we would have had to give back more than a half-billion dollars."

In a statement, Microsoft said: "While we are disappointed with the court’s decision in this case, we’re still in the process of reviewing it and weighing our options. In the meantime, we do not believe that this decision will have a material impact on the company."

Dresslar said the ruling should lead to dismissal of dozens of other suits filed by out-of-state companies challenging the state’s tax assessments.

"Fortunately, the court saw things our way, so the state’s budget situation is not going to be worsened," he added.

 Hmmm…. no conflict of interest by the courts here. Let’s see…

  • The judge is an agent of the state
  • The state pays the judge his income
  • It’s an appointed position (Nominated by governor, confirmed by Commission on Judicial Appointments; retention election)

Now why would a judge make any other determination?

California High Court Deals Microsoft Setback in Tax Case

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