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Gillette Take Two - U.S. Appeals Court to Reconsider California Income Tax Refund Decision - by Jeffrey Brown and John S. Lee 

Global Tax Adviser

 

August 14, 2012

 

Jeffrey Brown
Hamilton, U.S. Corporate Tax

 

John S. Lee
Montreal, U.S. Corporate Tax

 

In a somewhat unusual procedural move, last week the California Court of Appeal vacated its recent decision in The Gillette Co., et al. v. Franchise Tax Board which invalidated California's requirement for taxpayers to double-weight in-state sales for purposes of computing the California apportionment sales factor. On August 9, 2012, the court ordered a rehearing of the July 24, 2012 decision "on its own motion and for good cause".

KPMG observations
At this time, KPMG cannot predict the final outcome of the rehearing. In the interim, companies must continue to evaluate, both for California and other full member compact states, how to compute their current apportionment factors and monitor developments in the case at hand to evaluate the potential benefits of filing amended returns consistent with the vacated Gillette decision.

 

For more information, contact your KPMG adviser.

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