TEI Files Amicus Brief in Iowa's KFC Physical Presence Litigation

On June 1, 2011, the Institute filed an amicus brief urging the U.S. Supreme Court to overturn a lower court decision allowing Iowa to tax corporations with no physical presence in the State, KFC Corporation v. Iowa Department of Revenue. The core issue in this case is whether the Commerce Clause of the United States Constitution prohibits a State from imposing its corporate income tax on businesses with no connection to the State other than having customers located there.  The Iowa Supreme Court held that taxpayers cross the Commerce Clause's jurisdictional threshold merely by licensing intangible property to unrelated persons in the State by its so-called economic presence in the State.  TEI maintains the Iowa court's decision is flawed and casts an ominous shadow over the protections accorded interstate businesses by the Commerce Clause.

TEI's brief was prepared under the aegis of its State and Local Tax Committee, whose chair is Linda Dickens of Texas Instruments, Inc. Daniel B. De Jong, TEI Tax Counsel, was the principal author of the brief.

Download the brief.