MeadWestvaco Corp. v. Illinois Dept. of Revenue
Encyclopedia
MeadWestvaco Corp. v. Illinois Dept. of Revenue, 553 U.S. 16 (2008) is a United States Supreme Court case concerning the extent a state may tax companies that are not based in their state.
Mead, a corporation based out of Ohio
, owned Lexis-Nexis, which was based out of Illinois
. Mead sold Lexis, and Illinois maintained that Mead must pay them a proportionate capital-gains tax. Illinois asserted that Mead and Lexis were integrated to the extent required for the "unitary business rule". This rule allowed states to tax a proportionate share of the value generated by an interstate corporation.
The Supreme Court held that the two businesses were not integrated enough to be considered a "unitary business" and Illinois was not allowed to tax Mead on the Lexis sale.
Mead, a corporation based out of Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, owned Lexis-Nexis, which was based out of Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
. Mead sold Lexis, and Illinois maintained that Mead must pay them a proportionate capital-gains tax. Illinois asserted that Mead and Lexis were integrated to the extent required for the "unitary business rule". This rule allowed states to tax a proportionate share of the value generated by an interstate corporation.
The Supreme Court held that the two businesses were not integrated enough to be considered a "unitary business" and Illinois was not allowed to tax Mead on the Lexis sale.