State v. Chesebrough-Ponds, Inc.

This case involves an appeal by the State Revenue Department (Department) under Ala. Code 1975, § 40-2-22, from a circuit court judgment, affirmed by the Court of Civil Appeals, favorable to the taxpayer, Chesebrough-Ponds, Inc. (Chesebrough). The issue, one of first impression, concerns the proper calculation of the Alabama income tax deduction allowed Chesebrough for 1978 under Ala. Code 1975, § 40-18-35 (3). This section allows a corporation to deduct on its Alabama income tax return a percentage, computed by a statutory formula (apportionment ratio), of its federal income tax liability.…