Pepsi Foreign Affiliate ‘Just a Bunch of Paper,’ Witness Says

Soft drink giant Pepsi has no sound legal basis for asserting its snack food subsidiary Frito-Lay operates as a foreign corporation exempt from taxation in Illinois, an expert witness for the state Department of Revenue said during a tax trial Monday.

H. David Rosenbloom, director of the International Tax Program at New York University Law School and a member in the Washington DC office of Caplin & Drysdale, provided testimony about a 2010 corporate reorganization of PepsiCo. Inc. that caused profits from its snack food subsidiary Frito-Lay North America Inc. to be excluded from its Illinois combined return. ...