Repercussions of Gillette v. FTB: Will Taxpayers in Other MTC Member States Seek Right to Apportionm(1)

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Following the surprising California Court of Appeal decision in Gillette Co. v. Franchise Tax Board, taxpayers in Multistate Tax Compact member states may press for the long-denied right to elect to use the equally weighted three-factor apportionment formula. On July 24, 2012, the court held that the Multistate Tax Compact, to which California was a signatory, is a binding, multistate agreement that obligates its member states to offer their multistate taxpayers the option of using either the compact's three-factor formula to apportion income, or the state's own alternative apportionment formula.