Court Rules Out-of-State Licensor ConAgra Not Engaged in Business in West Virginia

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In a decision addressing the limitations on state taxation under the Due Process and Commerce Clauses, the West Virginia Supreme Court of Appeals held ConAgra Brands Inc. was not subject to West Virginia corporation net income and business franchise tax on royalties earned from the nationwide licensing of trademarks and trade names, because the company did not have substantial nexus with the state. Robert Willens, adjunct professor of finance at Columbia University Graduate School of Business, analyzes the court's decision, noting its inconsistency with other court decisions at the state level, and concludes that state tax nexus standards need to become an active area of U.S. Supreme Court jurisprudence.


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