Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768, 22 (1992)

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

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

Opinion of the Court

which produced that income is " 'acquired, managed or disposed of for purposes relating or contributing to the taxpayer's business.' " Ibid. (quoting Brief for Appellee 4). In rejecting the argument we observed:

"This definition of unitary business would destroy the concept. The business of a corporation requires that it earn money to continue operations and to provide a return on its invested capital. Consequently all of its operations, including any investment made, in some sense can be said to be 'for purposes related to or contributing to the [corporation's] business.' When pressed to its logical limit, this conception of the 'unitary business' limitation becomes no limitation at all." 458 U. S., at 326.

Apart from semantics, we see no distinction between the "purpose" test we rejected in ASARCO and the "ingrained acquisition-divestiture policy" approach adopted by the New Jersey Supreme Court. 125 N. J., at 36, 592 A. 2d, at 544. The hallmarks of an acquisition that is part of the taxpayer's unitary business continue to be functional integration, centralization of management, and economies of scale. Container Corp. clarified that these essentials could respectively be shown by: transactions not undertaken at arm's length, 463 U. S., at 180, n. 19; a management role by the parent that is grounded in its own operational expertise and operational strategy, ibid.; and the fact that the corporations are engaged in the same line of business, id., at 178. It is undisputed that none of these circumstances existed here.

The New Jersey Supreme Court also erred in relying on the fact that Bendix intended to use the proceeds of its gain from the sale of ASARCO to acquire Martin Marietta. Even if we were to assume that Martin Marietta, once acquired, would have been operated as part of Bendix's unitary business, that reveals little about whether ASARCO was run as part of Bendix's unitary business. Nor can it be main-


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

Last modified: October 4, 2007