U.S. Supreme Court issues GVR order in First Marblehead v. Massachusetts Commissioner of Revenue.

• Position: INSTITUTE NEWS

On October 13, 2015, the U.S. Supreme Court issued an order following TEI's recommendation to issue a "GVR order" in First Marblehead v. Massachusetts Commissioner of Revenue. First Marblehead involves the proper apportionment of a financial institution's income under Massachusetts' financial institutions excise tax. The taxpayer claimed that the apportionment formula, as applied by the Massachusetts Supreme Judicial Court (SJC), violated the dormant Commerce Clause because it was not fairly apportioned under the internal and external consistency tests. The SJC acknowledged the existence and role of both tests. However, rather than applying the required hypothetical replication of the challenged tax required by the internal consistency test, the SJC addressed whether actual multiple taxation was present, and it concluded internal consistency was satisfied because the taxpayer's cumulative tax burden was less than 100 percent. The SJC issued its decision three months before the U.S. Supreme Court issued its...