Wisconsin Department of Revenue v. William Wrigley, Jr. Co.

William Wrigley, Jr., Co. (Wrigley) (defendant) was a chewing-gum manufacturer based in Illinois that sold gum across the country through a system of district and regional sales teams. Wrigley’s midwestern district included the area around Milwaukee, Wisconsin. The regional manager and sales associates for the Milwaukee region were not given company offices, and Wrigley did not have a physical presence in Wisconsin. Orders from Wisconsin were sent to Illinois to be filled. The sales associates for the Milwaukee region traveled in company cars with supplies of gum and promotional materials, soliciting sales for Wrigley. The sales associates stored their stocks of gum in their homes or rented storage facilities and gave samples of gum to potential customers, checked the gum inventories of existing customers and replenished their stocks at cost, and replaced existing customers’ stale gum with fresh gum. Wrigley did not pay taxes in Wisconsin. In 1980 the Wisconsin Department of Revenue (the revenue department) (plaintiff) assessed a franchise- and income-tax deficiency against Wrigley after determining that Wrigley had been doing business in Wisconsin. Wrigley argued that it was immune from state taxes under § 101(a) of Public Law 86-272, 15 U.S.C. § 381, because it merely solicited business in Wisconsin. The Wisconsin Tax Appeals Commission upheld the assessment, and after several appeals, the Wisconsin Supreme Court held that Wisconsin could not tax Wrigley. The revenue department appealed.