Quimbee logo
DMCA.com Protection Status

Corporate Executive Board Company v. Virginia Department of Taxation

822 S.E.2d 918, 297 Va. 57, (2019)

Case BriefRelatedOptions
From our private database of 35,600+ case briefs...

Corporate Executive Board Company v. Virginia Department of Taxation

Virginia Supreme Court

822 S.E.2d 918, 297 Va. 57, (2019)

Facts

The Corporate Executive Board Company (CEB) (plaintiff), headquartered in Virginia, provided online tools that business executives used to analyze their companies’ functions. CEB did business in many states and foreign countries. Over half of CEB’s employees worked in Virginia, and its content was stored in servers located in Virginia. Virginia adopted the Uniform Division of Income for Tax Purposes Act and used a three-factor apportionment formula—which considered property, payroll, and sales—to apportion a company’s income for tax purposes. For the sales factor, Virginia treated the sales of intangible and tangible goods differently. Sales of tangible goods were counted in the state where the customer was located, and sales of intangible goods were counted in the state where the income-producing activity was performed. If the income-producing activity used to create an intangible good occurred in multiple states, Virginia used a cost-of-performance test and would count the activity as part of the company’s Virginia-derived income if, based on the costs incurred by the company, a greater portion of the income-producing activity occurred in Virginia than in any other state. Because most of CEB’s employees worked in Virginia and its servers were located in Virginia, CEB allocated almost all its sales to Virginia. CEB filed a lawsuit in state court arguing that Virginia’s apportionment formula violated the Due Process Clause of the Fourteenth Amendment and the Commerce Clause of the Constitution because it resulted in CEB paying multiple state taxes on the same income. CEB sought relief through the Uniform Division of Income for Tax Purposes Act’s relief provision. Under that provision, if a taxpayer could show that applying a state’s standard apportionment formula would produce unfair results such as multiple taxation attributable to the state, the taxpayer could petition for an alternate apportionment formula. The circuit court upheld Virginia’s apportionment formula. CEB appealed.

Rule of Law

Issue

Holding and Reasoning (McCullough, 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 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—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 620,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 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 620,000 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
  • 35,600 briefs - keyed to 984 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