Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 16 (1994)

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Cite as: 512 U. S. 298 (1994)

Opinion of the Court

test. Barclays maintains that a foreign owner of a taxpayer filing a California tax return "is forced to convert its diverse financial and accounting records from around the world into the language, currency, and accounting principles of the United States" at "prohibitiv[e]" expense. Brief for Petitioner in No. 92-1384, p. 44.11 Domestic-owned taxpayers, by contrast, need not incur such expense because they "already keep most of their records in English, in United States currency, and in accord with United States accounting principles." Id., at 45. Barclays urges that imposing this "prohibitive administrative burden," id., at 43, on foreign-owned enterprises gives a competitive advantage to their United States-owned counterparts and constitutes "economic protectionism" of the kind this Court has often condemned. Id., at 43-46.

Compliance burdens, if disproportionately imposed on out-of-jurisdiction enterprises, may indeed be inconsonant with the Commerce Clause. See, e. g., Hunt v. Washington State Apple Advertising Comm'n, 432 U. S. 333, 350-351 (1977) (increased costs imposed by North Carolina statute on out-of-state apple producers "would tend to shield the local apple industry from the competition of Washington apple growers," thereby discriminating against those growers). The factual predicate of Barclays' discrimination claim, however, is infirm.

Barclays points to provisions of California's implementing regulations setting out three discrete means for a taxpayer to fulfill its franchise tax reporting requirements. Each of these modes of compliance would require Barclays to gather and present much information not maintained by the unitary

11 Barclays estimates, and the trial court found, that an accounting system capable of conveying the information Barclays thought California's worldwide reporting scheme required for all of the enterprise's foreign affiliates would cost more than $5 million to set up, and more than $2 million annually to maintain. Brief for Petitioner in No. 92-1384, p. 44, n. 13; Nos. 325059 and 325061 (Super. Ct. Sacramento Cty., Aug. 20, 1987) (reprinted in App. to Pet. for Cert. in No. 92-1384, pp. A-27 to A-28).

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