The grasping reach of the Illinois state revenue collectors was slapped down by the U.S. Supreme Court today, a welcome decision on this, the taxiest of tax days.
WASHINGTON (AP) — Corporate taxpayers won a round in the Supreme Court on Tuesday in a case challenging the long arm of state tax collectors.
In a unanimous decision, the justices said Illinois courts must take another look at whether the state can tax Ohio-based Mead Corp., a paper and forest products company, in the $1.5 billion sale of data retrieval service Lexis/Nexis in 1994.
Writing for the court, Justice Samuel Alito said the state courts misinterpreted two previous Supreme Court rulings in deciding that Illinois was entitled to tax a fraction of the gain of Mead, now MeadWestvaco Corp.
The National Association of Manufacturers, Gannett Co. Inc. and the Walt Disney Co. all filed briefs supporting MeadWestvaco in the case.
Mead says its $1 billion gain from the sale can be taxed by Ohio, where the company is headquartered, but cannot be taxed by Illinois.
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