California Superior Court Finds Smithfield Entitled to Three-Factor Apportionment, Refund

The California Superior Court ruled that the taxpayer, Smithfield Packaged Meats Corp., was entitled to a refund consistent with the application of the three-factor apportionment formula. The taxpayer contended it earned more than 50 percent of income from agricultural business, entitling it to use a three-factor apportionment formula, and that it was entitled to alternative apportionment even if it was not an agricultural business. The taxpayer presented evidence that most of its business activities were agricultural, and that its income was earned from agricultural activities. The Franchise Tax Board (FTB) focused solely on the character of the final product, such ...