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White v. Reynolds Metals Co.

White v. Reynolds Metals Co.

Supreme Court of Alabama

December 21, 1989, Filed

No. 89-386

Opinion

 [*373]  This Court issued a writ of certiorari in this case to address the questions raised by an advisory opinion request from the Governor. See Opinion of the Justices No. 330, 558 So. 2d 390 (Ala. 1989). At issue is the constitutionality of Alabama's franchise tax on corporations that are incorporated under the laws of other states, Ala. Code 1975, § 40-14-41 (foreign corporations). The challenge to § 40-14-41 concerns the relation of the tax imposed by that section to the franchise tax on corporations  [*374]  that are incorporated under the laws of this state, Ala. Code 1975, § 40-14-40 (domestic corporations). The two taxes are mandated by Ala. Const. 1901, Art. XII, §§ 229 and 232. The trial court [**2]  held that § 40-14-41 violates the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, pretermitting discussion of the plaintiffs' challenge under the Commerce Clause, U. S. Const. Art. I, § 8, cl. 3. The Court of Civil Appeals affirmed, White v. Reynolds Metals Co., 558 So. 2d 367 (Ala. Civ. App. 1989).

On July 28, 1986, Reynolds Metals Company filed a petition for a writ of mandamus ordering the Commissioner of Revenue to set aside assessments of franchise taxes paid by Reynolds in 1982 and 1983 and to refund the taxes paid. Similar petitions, or appeals from denials of refunds, were filed by General Motors Acceptance Corporation ("GMAC"), GMAC Leasing Corporation, and General Motors Corporation ("GM"). Because all of the proceedings challenged assessments made pursuant to § 40-14-41 as violating the Equal Protection Clause and the Commerce Clause, the cases were consolidated. Amended pleadings were filed regarding subsequent tax years. The trial court entered a summary judgment for the plaintiffs.

] Section 229 of the Constitution, as amended by Amendment 27, reads, in pertinent part:

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558 So. 2d 373 *; 1989 Ala. LEXIS 1040 **

In re: James C. White, Jr., etc., and State Department of Revenue v. Reynolds Metals Company, et al.

Subsequent History: Rehearing Denied January 12, 1990. Certiorari Denied June 4, 1990. See 110 S. Ct. 2602. As Amended. Released for Publication March 24, 1990.

Prior History:   [**1]  ON WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS, Montgomery Circuit Court, CV-86-1093, CV-87-1837, CV-88-411, CV-88-424, CV-88-425, and CV-88-426-G.

Disposition: REVERSED AND JUDGMENT RENDERED.

CORE TERMS

franchise tax, domestic corporation, foreign corporation, capital stock, domestic, taxes, stock, capital employed, commerce clause, calculations, taxation, bases, classification, Appeals, figures, interstate commerce, corporate stock, do business, measured, cases, discriminate, proportion, millage, paid-up, tax base, invidious, exact, actual amount, pay tax, apportioned

Tax Law, Income Taxes, Corporations & Unincorporated Associations, General Overview, State & Local Taxes, Administration & Procedure, Business & Corporate Law, Corporate Finance, Franchise Tax, International Taxes, Americans Operating Abroad, Franchise Taxes, Imposition of Tax, Judicial Review, Constitutional Law, Supremacy Clause, Corporations, Civil Procedure, Summary Judgment, Opposing Materials, Equal Protection, Nature & Scope of Protection, Judicial Review, Standards of Review, Case or Controversy, Constitutionality of Legislation, Commerce Clause, Interstate Commerce, Prohibition of Commerce, Governments, Federal Government, US Congress, Transportation Law, Federal Powers, Congressional Duties & Powers, Legislation, Interpretation, Poverty, Separation of Powers, Enactment, Sales Taxes, Exempt Sales, Intrastate Commerce, Statute of Limitations