In The
Supreme Court of the United States

F. W. Woolworth Companyv.Taxation and Revenue Department of New Mexico

Decided June 29, 1982
Justice O’Connor, Dissent

CASE DETAILS

Topic: Economic Activity
Court vote: 6-3
Joining O'Connor opinion:
Citation: 458 U.S. 354
Docket: 80-1745
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Opinion

JUSTICE O'CONNOR, with whom JUSTICE BLACKMUN and JUSTICE REHNQUIST join, dissenting.

The $39.9 million in dividend income at issue in this case was earned by four foreign subsidiaries of F. W. Woolworth Co.: F. W. Woolworth GmbH (Germany), F. W. Woolworth, Ltd. (Canada), F. W. Woolworth, S. A. de C. V. Mexico (Mexico), and F. W. Woolworth Co., Ltd. (England). F. W. Woolworth Co. wholly owned its German, Canadian, and Mexican subsidiaries, and had a 52.7% interest in its English subsidiary. During the tax year in question, the subsidiaries apparently operated somewhat autonomously in their respective markets, but "mail, telephone, and teletype communication between the upper echelons of management of the parent and the subsidiaries" was " frequent.'" Ante at 458 U. S. 368 (footnote omitted) (quoting App. to Juris.Statement 34a). Moreover,

[d]ecisions about major financial decisions, such as the amount of dividends to be paid by the subsidiaries and the creation of substantial debt, had to be approved by the parent,

and "Woolworth's published financial statements, such as its annual reports, were prepared on a consolidated basis." Ante at 458 U. S. 368 -39 (citations and footnotes omitted).

These controlled subsidiaries, operating in geographically diverse markets in the same line of business as F. W. Woolworth itself, were simply not "unrelated," [ Footnote 2/1 ] "discrete business enterprise[s]," [ Footnote 2/2 ] "hav[ing] nothing to do with the activities" [ Footnote 2/3 ] of F. W. Woolworth in New Mexico. Because I disagree with the redefinition of the limits of a unitary business adopted today by the Court, and for the reasons expressed in my dissent in No. 80-2015, ASARCO Inc. v. Idaho State Tax Comm'n, ante p. 458 U. S. 331, which was argued in tandem with this case, I respectfully dissent.


Notes

[ Footnote 2/1 ]

Mobil Oil Corp. v. Commissioner of Taxes, 445 U. S. 425, 445 U. S. 439 (1980).

[ Footnote 2/2 ]

Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U. S. 207, 447 U. S. 224 (1980).

[ Footnote 2/3 ]

Mobil Oil Corp. v. Commissioner of Taxes of Vermont, supra, at 445 U. S. 442.