Gross Receipts and Unitary Credit Issues Ripen After California Supreme Court Acts in Microsoft and General Motors

On August 17, 2006, after years of litigation and speculation, the California Supreme Court issued its decisions in both Microsoft Corporation v. Franchise Tax Board (Case No. S133343) and General Motors Corporation v. Franchise Tax Board (Case No. S127086). Both cases presented the Revenue and Taxation Code Section ("Section") 25120 "gross receipts" issue and the Section 25137 "distortion" issue. The General Motors case also presented the Section 23609 "unitary credit" issue. The decisions will undoubtedly have varied and widespread effects on many taxpayers doing business in California.