RESPONDENT: Iowa Department of Revenue & Finance
LOCATION: Northern District Court of New York
DOCKET NO.: 90-1918
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: Iowa Supreme Court
CITATION: 505 US 71 (1992)
ARGUED: Apr 22, 1992
DECIDED: Jun 18, 1992
Jerome B. Libin - on behalf of the Petitioner
Kent L. Jones - on behalf of the United States, as amicus curiae supporting Respondent
Marcia Mason - on behalf of the Respondent
Facts of the case
Media for Kraft General Foods, Inc. v. Iowa Department of Revenue & FinanceAudio Transcription for Oral Argument - April 22, 1992 in Kraft General Foods, Inc. v. Iowa Department of Revenue & Finance
Audio Transcription for Opinion Announcement - June 18, 1992 in Kraft General Foods, Inc. v. Iowa Department of Revenue & Finance
William H. Rehnquist:
The opinion of the Court in No. 90-1918, Kraft General Foods versus Iowa Department of Revenue and Finance will be announced by Justice Stevens.
John Paul Stevens:
This case comes to us on a writ of certiorari to the Supreme Court of Iowa.
The petitioner operates a unitary business throughout the United States and in several foreign countries.
Because part of that business is conducted in Iowa, Kraft is subject to the Iowa business tax on corporations.
At issue in this case is Iowa's inclusion in the tax base of the dividends that Kraft received from six subsidiaries, each of which was incorporated and conducted its business in a foreign country.
While Iowa taxes the dividends that a corporation receives from its foreign subsidiaries, Iowa does not tax dividends received from domestic subsidiaries.
The question presented is whether this disparate treatment of dividends from foreign and domestic subsidiaries violates the Foreign Commerce Clause of the Constitution.
For reasons stated in an opinion filed with the Clerk today, we conclude that the Iowa statute facially discriminates against foreign commerce and therefore, is unconstitutional.
Accordingly, we reverse the judgment of the Supreme Court of Iowa.
The Chief Justice has filed a dissenting opinion which Justice Blackmun has joined.