Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768, 21 (1992)

Page:   Index   Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next



Opinion of the Court

tween the corporation and the bank. That circumstance, of course, is not at all presented here. See infra this page and 789.


Application of the foregoing principles to the present case yields a clear result: The stipulated factual record now before us presents an even weaker basis for inferring a unitary business than existed in either ASARCO or Woolworth, making this an a fortiori case. There is no serious contention that any of the three factors upon which we focused in Woolworth were present. Functional integration and economies of scale could not exist because, as the parties have stipulated, "Bendix and Asarco were unrelated business enterprises each of whose activities had nothing to do with the other." App. 169. Moreover, because Bendix owned only 20.6% of ASARCO's stock, it did not have the potential to operate ASARCO as an integrated division of a single unitary business, and of course, even potential control is not sufficient. Woolworth, 458 U. S., at 362. There was no centralization of management.

Furthermore, contrary to the view expressed below by the New Jersey Supreme Court, see 125 N. J., at 36-37, 592 A. 2d, at 544-545, the mere fact that an intangible asset was acquired pursuant to a long-term corporate strategy of acquisitions and dispositions does not convert an otherwise passive investment into an integral operational one. Indeed, in Container Corp. we noted the important distinction between a capital transaction that serves an investment function and one that serves an operational function. 463 U. S., at 180, n. 19 (citing Corn Products Refining Co. v. Commissioner, 350 U. S. 46, 50-53 (1955)). If that distinction is to retain its vitality, then, as we held in ASARCO, the fact that a transaction was undertaken for a business purpose does not change its character. 458 U. S., at 326. Idaho had argued that intangible income could be treated as earned in the course of a unitary business if the intangible property

Page:   Index   Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: October 4, 2007