Limits on State's Power to Tax Mutistate Corporations

Two cases that were appealed to the United States Supreme Court in 1982, Woolworth v. New Mexico and Asarco v. Idaho had the following results. Although these cases each came from different states, the issues involved were similar. The Supreme Court ruled that if a company is not based within a state, that state may not tax the dividends , interest income and capital gains earned by the corporation's foreign subsidiaries. Prior to these rulings, many states required multistate and multinational corporations to pay taxes on earning of their independent subsidiaries, no matter where they were based.