|
Note: The following is an excerpt from the introduction to the
article as published in The State and Local Tax Lawyer. Author citations have been
omitted for brevity.
Alabama’s Franchise Tax Unconstitutional: South Central Bell Telephone Co. v. Alabama
Peter R. Klason
INTRODUCTION
The Supreme Court handed the State of Alabama and its Department of Revenue a severe blow with its decision in South Central Bell Telephone Co. v. Alabama. The Court rejected Alabama’s claim that the Eleventh Amendment barred the Court from exercising its jurisdiction in the case. The Court likewise rejected the reasoning of the Supreme Court of Alabama that its decision in White v. Reynolds Metal Co. barred, as res judicata, the litigation of South Central Bell’s claim. The Supreme Court also held the structure of the Alabama state franchise tax to be an unconstitutional violation of the Commerce Clause.
Part I will examine the background of the case and the applicable portions of the Alabama Constitution and code. Part II will briefly outline the decision of the Supreme Court on each of the issues. Part III will analyze, in turn, each of the Court’s holdings. Part IV will conclude with an examination of the ramifications of this case and what the next step will be for the plaintiffs and the State of Alabama.
Back to Contents
Page
BACK TO TEXT
|
