Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768, 10 (1992)

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Cite as: 504 U. S. 768 (1992)

Opinion of the Court

ceeds in what later proved to be an unsuccessful bid to acquire Martin Marietta, a company whose aerospace business, it was hoped, would complement Bendix's aerospace/ electronics business. Id., at 36, 592 A. 2d, at 545.

We granted certiorari. 502 U. S. 977 (1991). At the initial oral argument in this case New Jersey advanced the proposition that all income earned by a nondomiciliary corporation could be apportioned by any State in which the corporation does business. To understand better the consequences of this theory we requested rebriefing and reargument. Our order asked the parties to address three questions:

"1. Should the Court overrule ASARCO Inc. v. Idaho State Tax Comm'n, 458 U. S. 307 (1982), and F. W. Woolworth Co. v. Taxation and Revenue Dept. of New Mexico, 458 U. S. 354 (1982)? "2. If ASARCO and Woolworth were overruled, should the decision apply retroactively? "3. If ASARCO and Woolworth were overruled, what constitutional principles should govern state taxation of corporations doing business in several states?" 503 U. S. 928 (1992).

Because we give a negative answer to the first question, see infra, at 783-786, we need not address the second and third.


The principle that a State may not tax value earned outside its borders rests on the fundamental requirement of both the Due Process and Commerce Clauses that there be "some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax." Miller Brothers Co. v. Maryland, 347 U. S. 340, 344-345 (1954). The reason the Commerce Clause includes this limit is self-evident: In a Union of 50 States, to permit each State to tax activities outside its borders would have drastic conse-


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