On June 1, 2011, the Institute filed a brief amicus curiae urging the U.S. Supreme Court to overturn a lower court decision allowing Iowa to tax corporations with no physical presence in the State.
TEI has approximately 7,000 members who represent more than 3,000 of the leading corporations in the United States, Canada, Europe, and Asia, including many domiciled or doing business in the State of Iowa. Because TEI members and the companies by whom they are employed will be materially affected by the Court's disposition of the constitutional issues raised by this case, the Institute has a special interest in this matter.
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 says yes, contending 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. Amicus Tax Executives Institute disagrees, believing the decision is flawed and casts an ominous shadow over the protections accorded interstate businesses by the Commerce Clause.
The full amicus brief can be accessed by clicking here.