Tesoro Corporation and Subsidiaries v. State, Dept. of Revenue

Summary

The Alaska Supreme Court affirmed the taxation of Tesoro's worldwide unitary-business income under Alaska's apportionment scheme and upheld the associated penalties. It held that Tesoro was a unitary business, that Tesoro lacked standing to challenge the scheme's internal consistency because it showed no injury from Alaska's choice of formula, and that the remedial formula was reasonable as applied. The court also concluded that the penalties were based on Tesoro's failure to treat its Alaska refinery and pipeline as unitary, not merely on its constitutional objection to the tax formula.