Underwood Typewriter Co. v. Chamberlain

The Underwood Typewriter Company (Underwood) (plaintiff) manufactured, sold, repaired, and rented typewriters and typewriter accessories. Underwood was incorporated in Delaware, had its principal office in New York City, and did all its manufacturing in Connecticut. In addition to manufacturing, Underwood also stored all its products in Connecticut and had an office in the state. Connecticut levied a corporate income tax on corporations doing business in the state. Connecticut applied an apportionment formula to determine how much of a multistate business’s income should be assigned to Connecticut for income-tax purposes. In 1916 Underwood made a profit of approximately $1,340,000. Underwood estimated that $43,000 of its income was earned in Connecticut, with the rest of its income coming from other states. The tax commissioner of Connecticut (the commissioner) (defendant) determined that 47 percent of Underwood’s real estate and property resided in Connecticut and apportioned 47 percent of Underwood’s income—approximately $630,000—to Connecticut for tax purposes. Underwood paid its tax liability as determined by the commissioner. Underwood subsequently filed a lawsuit in Connecticut state court seeking a refund and arguing that Connecticut could tax only the income that was earned in Connecticut. The superior court upheld the tax. The United States Supreme Court granted certiorari.