Florida vs. California: Supreme Court Sidesteps Major Corporate Tax Dispute

The U.S. Supreme Court recently declined to hear Florida’s challenge to California’s corporate tax apportionment system, leaving the dispute unresolved for now. Florida argued that California’s single-sales-factor method, combined with its special rule excluding certain large, occasional sales from the apportionment formula, unfairly disadvantages businesses operating outside the state. According to Florida, this approach can inflate the share of income taxed by California and effectively penalize interstate commerce.

California pushed back, stating that Florida’s claims lacked supporting data and applied only in limited situations. The state also argued that the rule is unlikely to influence major business relocation decisions.

By declining to hear the case, the Supreme Court did not rule on the merits, instead allowing the issue to continue through lower courts where similar challenges may be addressed first.