Abbott Laboratories v. Franchise Tax Board

Opinion

KITCHING, J.

INTRODUCTION

This appeal concerns the effect of Farmer Bros. Co. v. Franchise Tax Bd. (2003) 108 Cal.App.4th 976 [134 Cal.Rptr.2d 390] (Farmer Bros.) on Revenue and Taxation Code section 24402. Farmer Bros, held that section 24402 violated the commerce clause of the United States Constitution by allowing a tax deduction to a corporation which received a dividend declared from income of a corporation subject to California tax, while not allowing a tax deduction to a corporation receiving a dividend declared from income of a corporation not subject to California tax.

Plaintiff…