American Chicle Co. v. United States

316 U.S. 450, 62 S. Ct. 1144, 86 L. Ed. 1591 (1942)

From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

American Chicle Co. v. United States

United States Supreme Court
316 U.S. 450, 62 S. Ct. 1144, 86 L. Ed. 1591 (1942)

JC

Facts

American Chicle Co. (American Chicle) (plaintiff), an American corporation, had foreign subsidiaries as sole stockholders. Those subsidiaries each paid taxes upon their earnings to the subsidiaries’ respective nations of domicile. On American Chicle’s income tax returns, the company claimed the credit for foreign taxes paid by the subsidiaries. The Commissioner of Internal Revenue (the commissioner), on behalf of the federal government (defendant), calculated the credit and found that American Chicle had taken too much as credit. The main concern in this matter was calculating the tax deductible for American Chicle. Both parties agreed that the calculation began by dividing the dividend received by the parent corporation by the accumulated profits of the subsidiary. The conflict lies in the factor by which this fraction would be multiplied. American Chicle contended that the factor must be the total foreign taxes paid by the subsidiary. The government argued that the factor must be only as much of the taxes as are properly attributed to the accumulated profits, which was, essentially, on the proportion of taxes equal to the ratio of the accumulated profits to the total profits. The tax code indicated that the credit was for taxes paid upon or with respect to the subsidiary’s accumulated profits. The trial court ruled for the government, and American Chicle appealed.

Rule of Law

Issue

Holding and Reasoning (Roberts, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 814,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 814,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 814,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,300 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership