author: Chief Justice Roberts

text:
    UNITED STATES v. CLINTWOOD ELKHORN MINING CO. et al.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
    No. 07-308.
    Argued March 24, 2008
    Decided April 15, 2008

      William M. Jay argued the cause for the United States. With him on the briefs were Solicitor General Clement, Acting Assistant Attorney General Morrison, Deputy Solicitor General Hungar, Acting Deputy Assistant Attorney General Rothenberg, Kenneth L. Greene, and Steven W. Parks.

      Patricia A. Millett argued the cause for respondents. With her on the brief were Thomas C. Goldstein, Steven H. Becker, Paul A. Horowitz, and Suzanne I. Offerman

        Anthony T. Caso, Karen R. Horned, and Elizabeth Milito filed a brief for the National Federation of Independent Business Legal Foundation as amicus curiae urging affirmance.

        Clifton S. Elgarten filed a brief for Alliance Coal, LLC, as amicus curiae.

   Chief Justice Roberts

The Internal Revenue Code provides that taxpayers seeking a refund of taxes unlawfully assessed must comply with tax refund procedures set forth in the Code. Under those procedures, a taxpayer must file an administrative claim with the Internal Revenue Service before filing suit against the Government. Such a claim must be filed within three years of the filing of a return or two years of payment of the tax, whichever is later. The Tucker Act, in contrast, is more forgiving, allowing claims to be brought against the United States within six years of the challenged conduct. The question in this case is whether a taxpayer suing for a refund of taxes collected in violation of the Export Clause of the Constitution may proceed under the Tucker Act, when his suit does not meet the time limits for refund actions in the Internal Revenue Code. The answer is no.

I

A taxpayer seeking a refund of taxes erroneously or unlawfully assessed or collected may bring an action against the Government either in United States district court or in the United States Court of Federal Claims. 28 U. S. C. § 1346(a)(1); EC Term of Years Trust v. United States, 550 U. S. 429, 431, and n. 2 (2007). The Internal Revenue Code specifies that before doing so, the taxpayer must comply with the tax refund scheme established in the Code. United States v. Dalm, 494 U. S. 596, 609-610 (1990). That scheme provides that a claim for a refund must be filed with the Internal Revenue Service (IRS) before suit can be brought, and establishes strict timeframes for filing such a claim.

In particular, 26 U. S. C. § 7422(a) specifies:

“No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the [IRS].”

The Code further establishes a time limit for filing such a refund claim with the IRS: To receive a “refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return,” a refund claim must be filed no later than “3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later.” § 6511(a). And § 6511(b)(1) mandates that “[n]o credit or refund shall be allowed or made” if a claim is not filed within the time limits set forth in § 6511(a). “Read together, the import of these sections is clear: unless a claim for refund of a tax has been filed within the time limits imposed by § 6511(a), a suit for refund . . . may'not be maintained in any court.” Dalm, supra, at 602.

In 1978, Congress levied a tax “on coal from mines located in the United States sold by the producer,” 26 U. S. C. § 4121(a)(1), and specifically applied this tax to coal exports, see § 4221(a) (1994 ed.) (excepting from the general ban on taxing exports those taxes imposed under, inter alia, § 4121). In 1998, a group of companies challenged the tax in the District Court for the Eastern District of Virginia, contending that it violated the Export Clause of the Constitution. That Clause provides that “No Tax or Duty shall be laid on Articles exported from any State.” Art. I, §9, cl. 5. The District Court agreed and held the tax unconstitutional. Ranger Fuel Corp. v. United States, 33 F. Supp. 2d 466, 469 (1998). The Government did not appeal, and the IRS acquiesced in the District Court’s holding. See IRS Notice 2000-28, 2000-1 Cum. Bull. 1116, 1116-1117 (IRS Notice).

The respondents here, three coal companies, had all paid taxes on coal exports under § 4121(a) “[s]ince as early as 1978.” App. to Pet. for Cert. 36a. After § 4121(a) was held unconstitutional as applied to coal exports, the companies filed timely administrative claims in accordance with the refund scheme outlined above, seeking a refund of coal taxes they had paid in 1997, 1998, and 1999. The IRS refunded those taxes, with interest.

The companies also filed suit in the Court of Federal Claims seeking a refund of $1,065,936 in taxes paid between 1994 and 1996. They did not file any claim for those taxes with the IRS; any such claim would of course have been denied, given the limits set forth in §6511. See IRS Notice, at 1117 (“Claims [for a refund of taxes paid under §4121] must be filed within the period prescribed by § 6511”). Notwithstanding the failure of the companies to file timely administrative refund claims, the Court of Federal Claims allowed the companies to pursue their suit directly under the Export Clause. Jurisdiction rested on the Tucker Act, 28 U. S. C. § 1491(a)(1), and the companies limited their claim to taxes paid within that statute’s 6-year limitations period, §2501 (2000 ed. and Supp. V).

In allowing the companies to proceed outside the confines of the Internal Revenue Code refund procedures, the court relied on the decision of the Court of Appeals for the Federal Circuit in Cyprus Amax Coal Co. v. United States, 205 F. 3d 1369 (2000). Andalex Resources, Inc. v. United States, 54 Fed. Cl. 563, 564 (2002). The Court of Federal Claims did not, however, allow the companies to recover interest on the taxes paid under 28 U. S. C. §2411. That provision requires the Government to pay interest “for any overpayment in respect of any internal-revenue tax,” but the court held that the statute applied only to refund claims brought under the Code, not to claims brought directly under the Export Clause. 54 Fed. Cl., at 566.

The Court of Appeals affirmed in part and reversed in part. It first refused to revisit its holding in Cyprus Amax, and therefore upheld the ruling that the companies could pursue their claim under the Export Clause, despite having failed to file timely administrative refund claims. 478 F. 3d 1373, 1374-1375 (CA Fed. 2007). The Court of Appeals reversed the Court of Federal Claims interest holding, however, finding that the Government was required to pay the companies interest on the 1994-1996 amounts under §2411. Id., at 1376.

We granted certiorari, 552 U. S. 1061 (2007), and now reverse.

II

A

The outcome here is clear given the language of the pertinent statutory provisions. Title 26 U. S. C. § 7422(a) states that “[n]o suit... shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund . . . has been duly filed with” the IRS. (Emphasis added.) Here the companies did not file a refund claim with the IRS for the 1994-1996 taxes, and therefore may bring “[n]o suit” in “any court” to recover “any internal revenue tax” or “any sum” alleged to have been wrongfully collected “in any manner.” Five “any’s” in one sentence and it begins to seem that Congress meant the statute to have expansive reach.

Moreover, the time limits for filing administrative refund claims in § 6511 — set forth in an “unusually emphatic form,” United States v. Brockamp, 519 U. S. 347, 350 (1997) — apply to “any tax imposed by this title,” 26 U. S. C. § 6511(a) (emphasis added). The statute further provides that “[n]o credit or refund shall be allowed or made after the expiration of the period of limitation prescribed in subsection (a) . . . unless a claim for credit or refund is filed by the taxpayer within such period.” § 6511(b)(1). Again, this language on its face plainly covers the companies’ claim for a “refund” of “tax[es] imposed by” Title 26, specifically 26 U. S. C. §4121. The companies argue that these statutory provisions are ambiguous, Brief for Respondents 43-45, but we cannot imagine what language could more clearly state that taxpayers seeking refunds of unlawfully assessed taxes must comply with the Code’s refund scheme before bringing suit, including the requirement to file a timely administrative claim.

Indeed, we all but decided the question presented over six decades ago in United States v. A. S. Kreider Co., 313 U. S. 443 (1941). Section 1113(a) of the Revenue Act of 1926, like the refund claim provision in § 7422(a) of the current Code, prescribed that “[n]o suit or proceeding shall be maintained in any court for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue,” and established a time limit for bringing suit once the claim-filing requirement had been met. 44 Stat. 116. Like the companies here, A. S. Kreider had failed to file a tax refund action within that limitations period. See 313 U. S., at 446. And, like the companies here, A. S. Kreider argued that it was instead subject only to the longer 6-year statute of limitations under the Tucker Act. Id., at 447.

We rejected the claim, holding that the Tucker Act limitations period “was intended merely to place an outside limit on the period within which all suits might be initiated” under that Act, and that “Congress left it open to provide less liberally for particular actions which, because of special considerations, required different treatment.” Ibid. We held that the limitations period in § 1113(a) was “precisely that type of provision,” finding that Congress created a shorter statute of limitations for tax claims because “suits against the United States for the recovery of taxes impeded effective administration of the revenue laws.” Ibid. If such suits were allowed to be brought subject only to the 6-year limitations period in the Tucker Act, we explained, § 1113(a) would have “no meaning whatever.” Id., at 448. So too here. The refund scheme in the current Code would have “no meaning whatever” if taxpayers failing to comply with it were nonetheless allowed to bring suit subject only to the Tucker Act’s longer time bar.

B

The companies gamely argue for a different result here because the coal tax at issue was assessed in violation of the Export Clause of the Constitution. They spend much of their brief arguing that the Export Clause itself creates a cause of action against the Government, which can be brought directly under the Tucker Act. See Brief for Respondents 8-25. We need not decide this question here, because it does not matter. If the companies’ claims are subject to the Code provisions, those claims are barred whatever the source of the cause of action. We therefore turn to the companies’ assertion that their claims are somehow exempt from the broad sweep of the Code provisions.

The companies do not argue for such an exemption simply because their claims are based on a constitutional violation. As they acknowledge, id., at 34, a “constitutional claim can become time-barred just as any other claim can,” Block v. North Dakota ex rel. Board of Univ. and School Lands, 461 U. S. 273, 292 (1983). Further, Congress has the authority to require administrative exhaustion before allowing a suit against the Government, even for a constitutional violation. See, e. g., Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1018 (1984); Christian v. New York State Dept. of Labor, 414 U. S. 614, 622 (1974); Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U. S. 752, 766-767 (1947).

These principles are fully applicable to claims of unconstitutional taxation, a point highlighted by what we have said in other cases about the Anti-Injunction Act. That statute commands that (absent certain exceptions) “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.” 26 U. S. C. § 7421(a). The “decisions of this Court make it unmistakably clear that the constitutional nature of a taxpayer’s claim ... is of no consequence” to whether the prohibition against tax injunctions applies. Alexander v. “Americans United” Inc., 416 U. S. 752, 759 (1974). This is so even though the Anti-Injunction Act’s prohibitions impose upon the wronged taxpayer requirements at least as onerous as those mandated by the refund scheme — the taxpayer must succumb to an unconstitutional tax, and seek recourse only after it has been unlawfully exacted. We see no reason why compliance with straightforward administrative requirements and reasonable time limits to seek a refund once a tax has been paid should lead to a different result.

The companies assert that Export Clause claims in particular must be treated differently from constitutional claims in general. This is so, they argue, because the Clause is not simply a limitation on the taxing authority but a prohibition that “carves one particular economic activity completely out of Congress’s power.” Brief for Respondents 11. That distinction is without substance and totally manipulate: If the pertinent authority is regarded as the power to tax exports, the Clause is indeed a complete prohibition on congressional power. But if the pertinent authority is instead viewed as the “Power To lay and collect Taxes,” U. S. Const., Art. I, § 8, cl. 1, then the Clause is properly regarded as a limitation on that power. We do not question the importance of the Export Clause to the success of the enterprise in Philadelphia in 1787, see Brief for Respondents 11-13, but we see no basis for treating taxes collected in violation of its terms differently from taxes challenged on other grounds.

Indeed, the companies more or less give up the game when they acknowledge that their claims are subject to the Tucker Act’s statute of limitations. See id., at 34. The question is thus not whether the companies’ refund claim under the Export Clause can be limited, but rather which limitation applies. The companies are therefore left to argue that, despite the explicit and expansive statutory language described above, the refund scheme in Title 26 does not apply to their case as a matter of statutory interpretation. We find this ambitious argument unavailing.

The companies seek to support it by characterizing the refund scheme set out in the Code as “pro-government and revenue-protective,” and therefore “constitutionally dubious” as applied to Export Clause cases. Id., at 28-29. Given this potential constitutional infirmity, the companies argue, Congress could not have intended the refund scheme to apply to taxes assessed in violation of the Export Clause. See Ashwander v. TVA, 297 U. S. 288, 341 (1936) (Brandeis, J., concurring). We disagree. To begin with, any argument that Congress did not mean to require those in the companies’ position to comply with the tax refund scheme runs into a powerful impediment, for “[t]he ‘strong presumption’ that the plain language of the statute expresses congressional intent is rebutted only in ‘rare and exceptional circumstances.’” Ardestani v. INS, 502 U. S. 129,135 (1991) (quoting Rubin v. United States, 449 U. S. 424,430 (1981)). As we have already explained, the language of the relevant statutes emphatically covers the facts of this case.

In any event, we see no constitutional problem at all. Congress has indeed established a detailed refund scheme that subjects complaining taxpayers to various requirements before they can bring suit. This scheme is designed “to advise the appropriate officials of the demands or claims intended to be asserted, so as to insure an orderly administration of the revenue,” United States v. Felt & Tarrant Mfg. Co., 283 U. S. 269, 272 (1931), to provide that refund claims are made promptly, and to allow the IRS to avoid unnecessary litigation by correcting conceded errors. Even when the constitutionality of a tax is challenged, taxing authorities do in fact have an “exceedingly strong interest in financial stability,” McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Fla. Dept. of Business Regulation, 496 U. S. 18, 37 (1990), an interest they may pursue through provisions of the sort at issue here.

We do not see why invocation of the Export Clause would deprive Congress of the power to protect this “exceedingly strong interest.” Congress may not impose a tax in violation of the Export Clause (or any other constitutional provision, for that matter). But it is certainly within Congress’s authority to ensure that allegations of taxes unlawfully assessed — whether the asserted illegality is based upon the Export Clause or any other provision of law — are processed in an orderly and timely manner, and that costly litigation is avoided when possible. The companies’ claim that the Code procedures are themselves excessively burdensome is belied by the companies’ own invocation of those procedures for taxes paid within the Code’s limitations period, which resulted in full refunds with interest.

C

As a fallback argument, the companies maintain that even if the refund scheme applies to Export Clause cases generally, it does not “apply to taxes that are, on their face, unconstitutional.” Brief for Respondents 39. They rely for this proposition on Enochs v. Williams Packing & Nav. Co., 370 U. S. 1 (1962), a case dealing with the Anti-Injunction Act, 26 U. S. C. § 7421(a). Despite that Act’s broad and mandatory language, we explained that “if it is clear that under no circumstances could the Government ultimately prevail,... the attempted collection may be enjoined if equity jurisdiction otherwise exists. In such a situation the exaction is merely in ‘the guise of a tax.’ ” 370 U. S., at 7 (quoting Miller v. Standard Nut Margarine Co. of Fla., 284 U. S. 498, 509 (1932)). See also Bob Jones Univ. v. Simon, 416 U. S. 725, 745-746 (1974) (reaffirming the “under no circumstances” rule of Williams Packing).

On the force of Williams Packing, the companies argue that the refund scheme should similarly be read as inapplicable to situations in which there are “no circumstances” under which the tax imposed could be held valid under the Export Clause. The trouble with this is that §7422, the primary statute governing the refund process, is written much more broadly than § 7421(a), the statute at issue in Williams Packing. Section 7422(a) states that “[n]o suit... shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected ... until a claim for refund or credit has been duly filed with the” IRS. (Emphasis added.) This language generally tracks that of the Anti-Injunction Act, which also applies to suits “restraining the assessment or collection of any tax.” § 7421(a) (emphasis added). But § 7422(a) goes on to apply its prohibition against suit absent a proper refund claim to “any sum alleged to have been excessive or in any manner wrongfully collected.” (Emphasis added.) Even if we agreed that a facially unconstitutional tax for purposes of the tax refund scheme is “merely in The guise of a tax,’ ” Williams Packing, supra, at 7 (quoting Standard Nut Margarine, supra, at 509), and therefore not a “tax alleged to have been erroneously or illegally assessed or collected,” § 7422(a), it would nevertheless clearly fall into the broader category of “any sum ... in any manner wrongfully collected,” ibid.

Moreover, even if we were to accept the companies’ argument that the “under no circumstances” limitation on the Anti-Injunction Act applies to the refund scheme, they still would not prevail. We made clear in Williams Packing that “the question of whether the Government has a chance of ultimately prevailing is to be determined on the basis of the information available to it at the time of suit. Only if it is then apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained.” 370 U. S., at 7. A tax injunction suit, of course, is brought at the time the Government attempts to assess a tax on the taxpayer. Thus, if we applied the Williams Packing “under no circumstances” rule to the refund scheme, we would judge the Government’s chances of success as of the time the tax was assessed.

In this case, the companies seek refunds for taxes paid between 1994 and 1996. At that time, the scope of the Export Clause was sufficiently debatable that we granted certiorari in 1995, see United States v. International Business Machines Corp., 516 U. S. 1021, and again in 1997, see United States v. United States Shoe Corp., 522 U. S. 944, to clear it up. What is more, the District Court that struck down the application of § 4121(a) to coal exports partially relied on these cases in arriving at its decision, Ranger Fuel Corp., 33 F. Supp. 2d, at 469, and the IRS cited, inter alia, International Business Machines, supra, in its acquiescence notice, see IRS Notice, at 1116. Indeed, we would think that if the unconstitutionality of the coal export tax were so obvious that the Government had no chance of prevailing, someone paying the tax — such as these companies — would have successfully challenged it earlier than 20 years after its enactment.

We therefore hold that the plain language of 26 U. S. C. §§ 7422(a) and 6511 requires a taxpayer seeking a refund for a tax assessed in violation of the Export Clause, just as for any other unlawfully assessed tax, to file a timely administrative refund claim before bringing suit against the Government. Because we find that the Court of Appeals erred in allowing the companies to bring suit seeking a refund for the 1994-1996 taxes, we do not reach the question whether the

Court of Appeals also erred in awarding the companies interest on those amounts under 28 U. S. C. §2411. The judgment of the Court of Appeals is reversed.

It is so ordered.


source: Caselaw Access Project

author: Justice Alito Justice Thomas,

license: Public Domain

text:
    MEADWESTVACO CORP., successor in interest to MEAD CORP. v. ILLINOIS DEPARTMENT OF REVENUE et al.
    CERTIORARI TO THE APPELLATE COURT OF ILLINOIS, FIRST DISTRICT
    No. 06-1413.
    Argued January 16, 2008
    Decided April 15, 2008

      Beth S. Brinkmann argued the cause for petitioner. With her on the briefs were Brian R. Matsui, Paul H. Frankel, Craig B. Fields, and Roberta Moseley Nero.

      Brian F. Barov, Assistant Attorney General of Illinois, argued the cause for respondents. With him on the brief were Lisa Madigan, Attorney General, Michael A. Scodro, Solicitor General, and Jane Elinor Notz, Deputy Solicitor General.

      Briefs of amici curiae urging reversal were filed for the Council on State Taxation et al. by Todd A. Lard, Douglas L. Lindholm, Jan S. Amundson, and Quentin Riegel; for Gannett Co. by Scott D. Smith; for the Tax Executives Institute, Inc., by Eli J. Dicker, Shirley S. Grimmett, and Timothy J. McCormally; and for the Walt Disney Co. by Paul R. Q. Wolfson, Michael H. Salama, and Brandee A. Tilman.

      Briefs of amici curiae urging affirmance were filed for the State of California et al. by Edmund G. Brown, Jr., Attorney General of California, Manuel M. Medeiros, State Solicitor General, David Chaney, Chief Assistant Attorney General, Paul Gifford, Senior Assistant Attorney General, Gordon Burns, Deputy Solicitor General, and Anne Michelle Burr and George Spanos, Deputy Attorneys General, by Roberto J. Sdnchez-Ramos, Secretary of Justice of Puerto Rico, and by the Attorneys General for their respective States as follows: Dustin McDaniel of Arkansas, Richard Blumenthal of Connecticut, Bill McCollum of Florida, Lawrence G. Was-den of Idaho, Steve Carter of Indiana, Thomas J. Miller of Iowa, Paul J.

        Morrison of Kansas, G. Steven Rowe of Maine, Douglas F. Gansler of Maryland, Michael A. Cox of Michigan, Lori Swanson of Minnesota, Jeremiah W. (Jay) Nixon of Missouri, Catherine Cortez Masto of Nevada, Kelly A. Ayotte of New Hampshire, Wayne Stenehjem of North Dakota, W. A. Drew Edmondson of Oklahoma, Hardy Myers of Oregon, Thomas W. Corbett, Jr., of Pennsylvania, Henry McMaster of South Carolina, Robert E. Cooper, Jr., of Tennessee, Mark L. Shurtleff of Utah, William H. Sorrell of Vermont, and Darrell V. McGraw, Jr., of West Virginia; and for the Multistate Tax Commission by Sheldon H. Laskin.

   Justice Alito

delivered the opinion of the Court.

The Due Process and Commerce Clauses forbid the States to tax “‘extraterritorial values.’” Container Corp. of America v. Franchise Tax Bd., 463 U. S. 159,164 (1983); see also Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U. S. 768, 777 (1992); Mobil Oil Corp. v. Commissioner of Taxes of Vt, 445 U. S. 425, 441-442 (1980). A State may, however, tax an apportioned share of the value generated by the intrastate and extrastate activities of a multistate enterprise if those activities form part of a “‘unitary business.’” Hunt-Wesson, Inc. v. Franchise Tax Bd. of Cal., 528 U. S. 458, 460 (2000); Mobil Oil Corp., supra, at 438. We have been asked in this case to decide whether the State of Illinois constitutionally taxed an apportioned share of the capital gain realized by an out-of-state corporation on the sale of one of its business divisions. The Appellate Court of Illinois upheld the tax and affirmed a judgment in the State’s favor. Because we conclude that the state courts misapprehended the principles that we have developed for determining whether a multistate business is unitary, we vacate the decision of the Appellate Court of Illinois.

I

A

Mead Corporation (Mead), an Ohio corporation, is the predecessor in interest and a wholly owned subsidiary of petitioner MeadWestvaco Corporation. From its founding in 1846, Mead has been in the business of producing and selling paper, packaging, and school and office supplies. In 1968, Mead paid $6 million to acquire a company called Data Corporation, which owned an inkjet printing technology and a full-text information retrieval system, the latter of which had originally been developed for the U. S. Air Force. Mead was interested in the inkjet printing technology because it would have complemented Mead’s paper business, but the information retrieval system proved to be the more valuable asset. Over the course of many years, Mead developed that asset into the electronic research service now known as Lexis/Nexis (Lexis). In 1994, it sold Lexis to a third party for approximately $1.5 billion, realizing just over $1 billion in capital gain, which Mead used to repurchase stock, retire debt, and pay taxes.

Mead did not report any of this gain as business income on its Illinois tax returns for 1994. It took the position that the gain qualified as nonbusiness income that should be allocated to Mead’s domiciliary State, Ohio, under Illinois’ Income Tax Act (ITA). See Ill. Comp. Stat., ch. 35, § 5/303(a) (West 1994). The State audited Mead’s returns and issued a notice of deficiency. According to the State, the ITA required Mead to treat the capital gain as business income subject to apportionment by Illinois. The State assessed Mead with approximately $4 million in additional tax and penalties. Mead paid that amount under protest and then filed this lawsuit in state court.

The case was tried to the bench. Although the court admitted expert testimony, reports, and other exhibits into evidence, see App. D to Pet. for Cert. 29a-34a, the parties’ stipulations supplied most of the evidence of record regarding Mead’s relationship with Lexis, see App. 9-20. We summarize those stipulations here.

B

Lexis was launched in 1973. For the first few years it was in business, it lost money, and Mead had to keep it afloat with additional capital contributions. By the late 1970’s, as more attorneys began to use Lexis, the service finally turned a profit. That profit quickly became substantial. Between 1988 and 1993, Lexis made more than $800 million of the $3.8 billion in Illinois income that Mead reported. Lexis also accounted for $680 million of the $4.5 billion in business expense deductions that Mead claimed from Illinois during that period.

Lexis was subject to Mead’s oversight, but Mead did not manage its day-to-day affairs. Mead was headquartered in Ohio, while a separate management team ran Lexis out of its headquarters in Illinois. The two businesses maintained separate manufacturing, sales, and distribution facilities, as well as separate accounting, legal, human resources, credit and collections, purchasing, and marketing departments. Mead’s involvement was generally limited to approving Lexis’ annual business plan and any significant corporate transactions (such as capital expenditures, financings, mergers and acquisitions, or joint ventures) that Lexis wished to undertake. In at least one case, Mead procured new equipment for Lexis by purchasing the equipment for its own account and then leasing it to Lexis. Mead also managed Lexis’ free cash, which was swept nightly from Lexis’ bank accounts into an account maintained by Mead. The cash was reinvested in Lexis’ business, but Mead decided how to invest it.

Neither business was required to purchase goods or services from the other. Lexis, for example, was not required to purchase its paper supply from Mead, and indeed Lexis purchased most of its paper from other suppliers. Neither received any discount on goods or services purchased from the other, and neither was a significant customer of the other.

Lexis was incorporated as one of Mead’s wholly owned subsidiaries until 1980, when it was merged into Mead and became one of Mead’s divisions. Mead engineered the merger so that it could offset its income with Lexis’ net operating loss carryforwards. Lexis was separately reincorporated in 1985 before being merged back into Mead in 1993. Once again, tax considerations motivated each transaction. Mead also treated Lexis as a unitary business in its consolidated Illinois returns for the years 1988 through 1994, though it did so at the State’s insistence and then only to avoid litigation.

Lexis was listed as one of Mead’s “business segment[s]” in at least some of its annual reports and regulatory filings. Mead described itself in those reports and filings as “engaged in the electronic publishing business” and touted itself as the “developer of the world’s leading electronic information retrieval services for law, patents, accounting, finance, news and business information.” Id., at 93, 59; App. D to Pet. for Cert. 38a.

c

Based on the stipulated facts and the other exhibits and expert testimony received into evidence, the Circuit Court of Cook County concluded that Lexis and Mead did not constitute a unitary business. The trial court reasoned that Lexis and Mead could not be unitary because they were not functionally integrated or centrally managed and enjoyed no economies of scale. Id., at 35a-36a, 39a. The court nevertheless concluded that the State could tax an apportioned share of Mead’s capital gain because Lexis served an “operational purpose” in Mead’s business:

“Lexis/Nexis was considered in the strategic planning of Mead, particularly in the allocation of resources. The operational purpose allowed Mead to limit the growth of Lexis/Nexis if only to limit its ability to expand or to contract through its control of its capital investment.” Id., at 38a-39a.

The Appellate Court of Illinois affirmed. Mead Corp. v. Department of Revenue, 371 Ill. App. 3d 108, 861 N. E. 2d 1131 (2007). The court cited several factors as evidence that Lexis served an operational function in Mead’s business: (1) Lexis was wholly owned by Mead; (2) Mead had exercised its control over Lexis in various ways, such as manipulating its corporate form, approving significant capital expenditures, and retaining tax benefits and control over Lexis’ free cash; and (3) Mead had described itself in its annual reports and regulatory filings as engaged in electronic publishing and as the developer of the world’s leading information retrieval service. See id., at 111-112, 861 N. E. 2d, at 1135-1136. Because the court found that Lexis served an operational function in Mead’s business, it did not address the question whether Mead and Lexis formed a unitary business. See id., at 117-118, 861 N. E. 2d, at 1140.

The Supreme Court of Illinois denied review in January 2007. Mead Corp. v. Illinois Dept. of Revenue, 222 Ill. 2d 609, 862 N. E. 2d 235 (Table). We granted certiorari. 551 U. S. 1189 (2007).

II

Petitioner contends that the trial court properly found that Lexis and Mead were not unitary and that the Appellate Court of Illinois erred in concluding that Lexis served an operational function in Mead’s business. According to petitioner, the exception for apportionment of income from non-unitary businesses serving an operational function is a narrow one that does not reach a purely passive investment such as Lexis. We perceive a more fundamental error in the state courts’ reasoning. In our view, the state courts erred in considering whether Lexis served an “operational purpose” in Mead’s business after determining that Lexis and Mead were not unitary.

A

The Commerce Clause and the Due Process Clause impose distinct but parallel limitations on a State’s power to tax out-of-state activities. See Quill Corp. v. North Dakota, 504 U. S. 298, 305-306 (1992); Mobil Oil Corp., 445 U. S., at 451, n. 4 (Stevens, J., dissenting); Norfolk & Western R. Co. v. Missouri Tax Comm’n, 390 U. S. 317, 325, n. 5 (1968). The Due Process Clause demands that there exist “ ‘some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax,’” as well as a rational relationship between the tax and the “ ‘ “values connected with the taxing State.” ’ ” Quill Corp., supra, at 306 (quoting Miller Brothers Co. v. Maryland, 347 U. S. 340,344-345 (1954), and Moorman Mfg. Co. v. Bair, 437 U. S. 267, 273 (1978)). The Commerce Clause forbids the States to levy taxes that discriminate against interstate commerce or that burden it by subjecting activities to multiple or unfairly apportioned taxation. See Container Corp., 463 U. S., at 170-171; Armco Inc. v. Hardesty, 467 U. S. 638, 644 (1984). The “broad inquiry” subsumed in both constitutional requirements is “ ‘whether the taxing power exerted by the state bears fiscal relation to protection, opportunities and benefits given by the state’ ” — that is, “ ‘whether the state has given anything for which it can ask return.’” ASARCO Inc. v. Idaho Tax Comm’n, 458 U. S. 307, 315 (1982) (quoting Wisconsin v. J. C. Penney Co., 311 U. S. 435, 444 (1940)).

Where, as here, there is no dispute that the taxpayer has done some business in the taxing State, the inquiry shifts from whether the State may tax to what it may tax. Cf. Allied-Signal, 504 U. S., at 778 (distinguishing Quill Corp., supra). To answer that question, we have developed the unitary business principle. Under that principle, a State need not “isolate the intrastate income-producing activities from the rest of the business” but “may tax an apportioned sum of the corporation’s multistate business if the business is unitary.” Allied-Signal, supra, at 772; accord, HuntWesson, 528 U. S., at 460; Exxon Corp. v. Department of Revenue of Wis., 447 U. S. 207, 224 (1980); Mobil Oil Corp., supra, at 442; cf. 1 J. Hellerstein & W. Hellerstein, State Taxation ¶ 8.07[1], p. 8-61 (3d ed. 2001-2005) (hereinafter Hellerstein & Hellerstein). The court must determine whether “intrastate and extrastate activities formed part of a single unitary business,” Mobil Oil Corp., supra, at 438-439, or whether the out-of-state values that the State seeks to tax “‘derive[d] from “unrelated business activity” which constitutes a “discrete business enterprise,”’” Allied-Signal, supra, at 773 (quoting Exxon Corp., supra, at 224, in turn quoting Mobil Oil Corp., supra, at 439, 442; alteration in original). We traced the history of this venerable principle in Allied-Signal, supra, at 778-783, and, because it figures prominently in this case, we retrace it briefly here.

B

With the coming of the Industrial Revolution in the 19th century, the United States witnessed the emergence of its first truly multistate business enterprises. These railroad, telegraph, and express companies presented state taxing authorities with a novel problem: A State often cannot tax its fair share of the value of a multistate business by simply taxing the capital within its borders. The whole of the enterprise is generally more valuable than the sum of its parts; were it not, its owners would simply liquidate it and sell it off in pieces. As we observed in 1876, “[t]he track of the road is but one track from one end of it to the other, and, except in its use as one track, is of little value.” State Railroad Tax Cases, 92 U. S. 575, 608.

The unitary business principle addressed this problem by shifting the constitutional inquiry from the niceties of geographic accounting to the determination of the taxpayer’s business unit. If the value the State wished to tax derived from a “unitary business” operated within and without the State, the State could tax an apportioned share of the value of that business instead of isolating the value attributable to the operation of the business within the State. E. g., Exxon Corp., supra, at 223 (citing Moorman Mfg. Co., supra, at 273). Conversely, if the value the State wished to tax derived from a “discrete business enterprise,” Mobil Oil Corp., supra, at 439, then the State could not tax even an apportioned share of that value. E. g., Container Corp., supra, at 165-166.

We recognized as early as 1876 that the Due Process Clause did not require the States to assess trackage “in each county where it lies according to its value there.” State Railroad Tax Cases, 92 U. S., at 608. We went so far as to opine that “[i]t may well be doubted whether any better mode of determining the value of that portion of the track within any one county has been devised than to ascertain the value of the whole road, and apportion the value within the county by its relative length to the whole.” Ibid. We generalized the rule of the State Railroad Tax Cases in Adams Express Co. v. Ohio State Auditor, 165 U. S. 194 (1897). There we held that apportionment could permissibly be applied to a multistate business lacking the “physical unity” of wires or rails but exhibiting the “same unity in the use of the entire property for the specific purpose,” with “the same elements of value arising from such use.” Id., at 221. We extended the reach of the unitary business principle further still in later cases, when we relied on it to justify the taxation by apportionment of net income, dividends, capital gain, and other intangibles. See Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113, 117, 120-121 (1920) (net income tax); Bass, Ratcliff & Gretton, Ltd. v. State Tax Comm’n, 266 U. S. 271, 277, 280, 282-283 (1924) (franchise tax); J. C. Penney Co., supra, at 443-445 (tax on the “privilege of declaring dividends”); cf. Allied-Signal, supra, at 780 (“[F]or constitutional purposes capital gains should be treated as no different from dividends”); see also 1 Hellerstein & Hellerstein ¶ 8.07[1] (summarizing this history).

As the unitary business principle has evolved in step with American enterprise, courts have sometimes found it difficult to identify exactly when a business is unitary. We confronted this problem most recently in Allied-Signal. The taxpayer there, a multistate enterprise, had realized capital gain on the disposition of its minority investment in another business. The parties’ stipulation left little doubt that the taxpayer and its investee were not unitary. See 504 U. S., at 774 (observing that “the question whether the business can be called ‘unitary’ ... is all but controlled by the terms of a stipulation”). The record revealed, however, that the taxpayer had used the proceeds from the liquidated investment in an ultimately unsuccessful bid to purchase a new asset that would have been used in its unitary business. See id., at 776-777. From that wrinkle in the record, the New Jersey Supreme Court concluded that the taxpayer’s minority interest had represented nothing more than a temporary investment of working capital awaiting deployment in the taxpayer’s unitary business. See Bendix Corp. v. Director, Div. of Taxation, 125 N. J. 20, 37, 592 A. 2d 536, 545 (1991). The State went even further. It argued that, because there could be “no logical distinction between short-term investment of working capital, which all concede is apportionable,.. . and all other investments,” the unitary business principle was outdated and should be jettisoned. 504 U. S., at 784.

We rejected both contentions. We concluded that “the unitary business principle is not so inflexible that as new methods of finance and new forms of business evolve it cannot be modified or supplemented where appropriate.” Id., at 786; see also id., at 785 (“If lower courts have reached divergent results in applying the unitary business principle to different factual circumstances, that is because, as we have said, any number of variations on the unitary business theme 'are logically consistent with the underlying principles motivating the approach’” (quoting Container Corp., 463 U. S., at 167)). We explained that situations could occur in which apportionment might be constitutional even though “the payee and the payor [were] not... engaged in the same unitary business.” 504 U. S., at 787. It was in that context that we observed that an asset could form part of a taxpayer’s unitary business if it served an “operational rather than an investment function” in that business. Ibid. “Hence, for example, a State may include within the apportionable income of a nondomiciliary corporation the interest earned on short-term deposits in a bank located in another State if that income forms part of the working capital of the corporation’s unitary business, notwithstanding the absence of a unitary relationship between the corporation and the bank.” Id., at 787-788. We observed that we had made the same point in Container Corp., where we noted that “capital transactions can serve either an investment function or an operational function.” 46.3 U. S., at 180, n. 19; cf. Corn Products Refining Co. v. Commissioner, 350 U. S. 46, 50 (1955) (concluding that corn futures contracts in the hands of a corn refiner seeking to hedge itself against increases in corn prices are operational rather than capital assets), cited in Container Corp., supra, at 180, n. 19.

C

As the foregoing history confirms, our references to “operational function” in Container Corp. and Allied-Signal were not intended to modify the unitary business principle by adding a new ground for apportionment. The concept of operational function simply recognizes that an asset can be a part of a taxpayer’s unitary business even if what we may term a “unitary relationship” does not exist between the “payor and payee.” See Allied-Signal, supra, at 791-792 (O’Con-nor, J., dissenting); Hellerstein, State Taxation of Corporate Income From Intangibles: Allied-Signal and Beyond, 48 Tax L. Rev. 739, 790 (1993) (hereinafter Hellerstein). In the example given in Allied-Signal, the taxpayer was not unitary with its banker, but the taxpayer’s deposits (which represented working capital and thus operational assets) were clearly unitary with the taxpayer’s business. In Corn Products, the taxpayer was not unitary with the counterparty to its hedge, but the taxpayer’s futures contracts (which served to hedge against the risk of an increase in the price of a key cost input) were likewise clearly unitary with the taxpayer’s business. In each case, the “payor” was not a unitary part of the taxpayer’s business, but the relevant asset was. The conclusion that the asset served an operational function was merely instrumental to the constitutionally relevant conclusion that the asset was a unitary part of the business being conducted in the taxing State rather than a discrete asset to which the State had no claim. Our decisions in Container Corp. and AUied-Signal did not announce a new ground for the constitutional apportionment of extrastate values in the absence of a unitary business. Because the Appellate Court of Illinois interpreted those decisions to the contrary, it erred.

Where, as here, the asset in question is another business, we have described the “hallmarks” of a unitary relationship as functional integration, centralized management, and economies of scale. See Mobil Oil Corp., 445 U. S., at 438 (citing Butler Brothers v. McColgan, 315 U. S. 501, 506-508 (1942)); see also Allied-Signal, supra, at 783 (same); Container Corp., supra, at 179 (same); F. W. Woolworth Co. v. Taxation and Revenue Dept. of N. M., 458 U. S. 354, 364 (1982) (same). The trial court found each of these hallmarks lacking and concluded that Lexis was not a unitary part of Mead’s business. The appellate court, however, made no such determination. Relying on its operational function test, it reserved judgment on whether Mead and Lexis formed a unitary business. The appellate court may take up that question on remand, and we express no opinion on it now.

Ill

The State and its amici argue that vacatur is not required because the judgment of the Appellate Court of Illinois may be affirmed on an alternative ground. They contend that the record amply demonstrates that Lexis did substantial business in Illinois and that Lexis’ own contacts with the State suffice to justify the apportionment of Mead’s capital gain. See Brief for Respondents 18-25, 46-49; Brief for Multistate Tax Commission as Amicus Curiae 19-29. The State and its amici invite us to recognize a new ground for the constitutional apportionment of intangibles based on the taxing State’s contacts with the capital asset rather than the taxpayer.

We decline this invitation because the question that the State and its amici call upon us to answer was neither raised nor passed upon in the state courts. It also was not addressed in the State’s brief in opposition to the petition. We typically will not address a question under these circumstances even if the answer would afford an alternative ground for affirmance. See Glover v. United States, 531 U. S. 198, 205 (2001) (citing Taylor v. Freeland & Kronz, 503 U. S. 638, 646 (1992)); Lorillard Tobacco Co. v. Reilly, 533 U. S. 525,578 (2001) (Thomas, J., concurring in part and concurring in judgment).

The case for restraint is particularly compelling here, since the question may impact the law of other jurisdictions. The States of Ohio and New York, for example, have both adopted the rationale for apportionment that respondents urge us to recognize today. See Ohio Rev. Code Ann. §§5733.051(E)-(F) (West 2007); N. Y. Tax Law Ann. §210, subd. 3, par. (b) (West Supp. 2008); see also Allied-Signal Inc. v. Department of Taxation & Finance, 229 App. Div. 2d 759, 762, 645 N. Y. S. 2d 895, 898 (3d Dept. 1996) (finding that a “sufficient nexus existed between New York and the dividend and capital gain income” of the nondomiciliary parent because “the corporations generating the income taxed . . . each have their own connection with the taxing jurisdiction”); 1 Hellerstein & Hellerstein ¶ 9.11[2][a]. Neither Ohio nor New York has appeared as an amicus in this case, and neither was on notice that the constitutionality of its tax scheme was at issue, the question having been raised for the first time in the State’s brief on the merits. So postured, the question is best left for another day.

IV

The judgment of the Appellate Court of Illinois is vacated, and this case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice Thomas,

concurring.

Although I join the Court’s opinion, I write separately to express my serious doubt that the Constitution permits us to adjudicate cases in this area. Despite the Court’s repeated holdings that “[t]he Due Process and Commerce Clauses forbid the States to tax ‘extraterritorial values,’” ante, at 19 (quoting Container Corp. of America v. Franchise Tax Bd., 463 U. S. 159, 164 (1983)), I am not fully convinced of that proposition.

To the extent that our decisions addressing state taxation of multistate enterprises rely on the negative Commerce Clause, I would overrule them. As I have previously explained, this Court’s negative Commerce Clause jurisprudence “has no basis in the Constitution and has proved unworkable in practice.” United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Management Authority, 550 U. S. 330, 349 (2007) (Thomas, J., concurring in judgment).

The Court’s cases in this area have not, however, rested solely on the Commerce Clause. The Court has long recognized that the Due Process Clause of the Fourteenth Amendment may also limit States’ authority to tax multistate businesses. See Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 226 (1897) (concluding that because “[t]he property taxed has its actual situs in the State and is, therefore, subject to the jurisdiction, and ... regulation by the state legislature,” the tax at issue did not “amoun[t] to a taking of property without due process of law”). I agree that the Due Process Clause requires a jurisdictional nexus or, as this Court has stated, “some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.” Miller Brothers Co. v. Maryland, 347 U. S. 340, 344-345 (1954); see ante, at 24. But apart from that requirement, I am concerned that further constraints — particularly those limiting the degree to which a State may tax a multistate enterprise — require us to read into the Due Process Clause yet another unenumerated, substantive right. Cf. Troxel v. Granville, 530 U. S. 57, 80 (2000) (Thomas, J., concurring in judgment) (leaving open the question whether “our substantive due process cases were wrongly decided and... the original understanding of the Due Process Clause precludes judicial enforcement of unenumerated rights”).

Today the Court applies the additional requirement that there exist “a rational relationship between the tax and the values connected with the taxing State.” Ante, at 24 (internal quotation marks omitted); see also Moorman Mfg. Co. v. Bair, 437 U. S. 267, 273 (1978) (requiring that “the income attributed to the State for tax purposes ... be rationally related to Values connected with the taxing State’ ” (quoting Norfolk & Western R. Co. v. Missouri Tax Comm’n, 390 U. S. 317, 325 (1968))). In my view, however, it is difficult to characterize this requirement as providing an exclusively procedural safeguard against the deprivation of property. Scrutinizing the amount of multistate income a State may apportion for tax purposes comes perilously close to evaluating the excessiveness of the State’s taxing scheme — a question the Fourteenth Amendment does not grant us the authority to adjudicate. See, e. g., Stewart Dry Goods Co. v. Lewis, 294 U. S. 550, 562 (1935) (“To condemn a levy on the sole ground that it is excessive would be to usurp a power vested not in the courts but in the legislature, and to exercise the usurped power arbitrarily by substituting our conceptions of public policy for those of the legislative body”). Indeed, divining from the Fourteenth Amendment a right against disproportionate taxation bears a striking resemblance to our long-rejected Lochner-era precedents. See, e. g., Lochner v. New York, 198 U. S. 45, 56-58 (1905) (invalidating a state statute as an “unreasonable, unnecessary and arbitrary interference with the right of the individual... to enter into those contracts ... which may seem to him appropriate or necessary”). Moreover, the Court’s involvement in this area is wholly unnecessary given Congress’ undisputed authority to resolve income apportionment issues by virtue of its power to regulate commerce “among the several States.” See U. S. Const., Art. I, §8, cl. 3.

Although I believe that the Court should reconsider its constitutional authority to adjudicate these kinds of cases, neither party has asked us to do so here, and the Court’s decision today faithfully applies our precedents. I therefore concur.

       See Prospectus of MeadWestvaco Corporation S-3 (Mar. 19,2003), online at http://www.sec.gov/Archives/edgar/data/1159297/000119312503085265/ d424b5.htm (as visited Apr. 1, 2008, and available in Clerk of Court’s case file); App. 9.

       When the sale of Lexis occurred in 1994, the ITA defined “business income” as “income arising from transactions and activity in the regular course of the taxpayer’s trade or business,” as well as “income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.” 111. Comp. Stat., ch. 35, § 5/1501(a)(l) (West 1994). This language mirrors the definition of “business income” in the Uniform Division of Income for Tax Purposes Act (UDITPA). See UDITPA § 1(a) (2002); see also §9 (subjecting “[a]ll business income” to apportionment). In 2004, the Illinois General Assembly amended the definition of “business income” to “all income that may be treated as apportionable business income under the Constitution of the United States.” Pub. Act 93-840, Art. 25, § 25-5 (codified at Ill. Comp. Stat., ch. 35, § 5/1501(a)(l) (West 2004)); cf. Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U. S. 768,786 (1992) (declining to adopt UDITPA’s “business income” test as the constitutional standard for apportionment).

       The dissent agreed that the unitary business principle remained sound, 504 U. S., at 790 (opinion of O’Connor, J.), but found merit in New Jersey’s premise (and the New Jersey Supreme Court’s conclusion) that no logical distinction could be drawn between short- or long-term investments for purposes of unitary analysis, id., at 793 (“Any distinction between short-term and long-term investments cannot be of constitutional dimension”). We need not revisit that question here.

       Resolving this question now probably would not spare the State a remand. The State calculated petitioner’s tax liability by applying the State’s tax rate to Mead’s apportioned business income, which in turn was calculated by applying Mead’s apportionment percentage to its apportion-able business income. See App. 28; Ill. Comp. Stat., ch. 35, § 57304(a) (West 1994). But if a constitutionally sufficient link between the State and the value it wished to tax is founded on the State’s contacts with Lexis rather than Mead, then presumably the apportioned tax base should be determined by applying the State’s four-factor apportionment formula not to Mead but to Lexis. Naturally, applying the formula to Lexis rather than Mead would yield a different apportionment percentage. See Brief for Multistate Tax Commission as Amicus Curiae 18-19, and n. 9; see also Hellerstein 802-803.
      The Multistate Tax Commission seems to argue that the difference would not affect the result because application of the formula to Lexis would have yielded a higher apportionment percentage. See Brief for Multistate Tax Commission 18-19. Amicus argues, in other words, that petitioner has no cause to complain because it caught a break in the incorrect application of a lower apportionment percentage. Amicus’ argument assumes what we are in no position to decide: that Lexis’ own apportioned tax base was properly calculated. Had petitioner been on notice that Lexis, rather than Mead, would supply the relevant apportionment percentage, it might have persuaded the state courts that Lexis’ apportionment percentage should have been even lower than Mead’s. The State’s untimely resort to an alternative ground for affirmance may have denied petitioner a fair opportunity to make that argument.