Brief of Tax Executives Institute, Inc. as amicus curiae: on July 18, 2007 Tax Executives Institute filed this brief with the Supreme Court of the United States.

IN THE

Supreme Court of the United States

No. 06-1413

MEADWESTVACO CORPORATION

v.

ILLINOIS DEPARTMENT OF REVENUE

On Petition for a Writ of Certiorari

Interest of Amicus Curiae

Pursuant to Rule 37 of the Rules of this Court, Tax Executives Institute, Inc. respectfully submits this brief as amicus curiae in support of the petition for a writ of certiorari. (1) Tax Executives Institute (hereinafter "TEI" or "the Institute") is a voluntary, non-profit association of corporate and other business executives, managers, and administrators who are responsible for the tax affairs of their employers. TEI was organized in 1944 under the laws of the State of New York and is exempt from taxation under section 501(c)(6) of the Internal Revenue Code of 1986 (26 U.S.C.). The Institute is dedicated to promoting the uniform and equitable enforcement of the tax laws, reducing the costs and burdens of administration and compliance to the benefit of both the government and taxpayers, and vindicating the Commerce Clause and other constitutional rights of all business taxpayers.

TEI has more than 7,000 members who represent more than 3,000 of the leading corporations in the United States, Canada, Europe, and Asia. TEI's members represent a cross-section of the business community whose employers are, almost without exception, engaged in interstate commerce. Therefore, TEI's members have a keen interest in this case, which involves the constitutional limits on the States' ability to impose tax on a nondomiciliary taxpayer's income that bears no connection with the taxpayer's in-state activities.

The Due Process and Commerce Clauses require some definite link--or nexus--between the State and the activity to be taxed. Without such a connection, the state taxing scheme will be struck down as unconstitutional. Here, the State of Illinois impermissibly apportioned and hence imposed tax on the nonunitary, investment income of a multistate corporation--specifically, the gain realized by Petitioner MeadWestvaco Corporation upon the disposition of the assets of another company (Lexis/Nexis) that it held for investment purposes. In sustaining the State's action, the court below distended and effectively disregarded this Court's decision in Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768 (1992), which holds that when investment income is derived from activities unrelated to the business activities of a unitary business, "due process considerations ... preclude apportionability." Id. at 780.

The companies represented by the Institute's membership are directly and materially affected by the rules governing allocation and apportionment of income among the States. By ignoring the Court's teaching in Allied-Signal, the Appellate Court of Illinois denied MeadWestvaco the constitutional protections of the Commerce and Due Process Clauses. If permitted to stand, the decision will unsettle the expectations of all multi-jurisdictional companies, including those represented by TEI. Accordingly, TEI and its members will be directly affected by the disposition of this case.

Summary of Argument

In this case, the State of Illinois seeks to tax the gain realized by MeadWestvaco Corporation upon the disposition of another, nondomiciliary company (Lexis/Nexis) that it held for investment purposes. In sustaining the State's attempt, the Illinois Appellate Court distended and effectively disregarded the Court's seminal decision in Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768 (1992), which holds that a State may...

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