On July 29, 2009, the Supreme Court of California denied the Franchise Tax Board's Petition for Review, which sought to overturn the Court of Appeal's influential sales factor decision in General Mills v. Franchise Tax Board. The Court of Appeal had reversed the trial court, and agreed with General Mills in holding that “[t]he full sales price of General Mills" hedging futures sales contracts are 'gross receipts' to be included in the calculation of the UDITPA sales factor.”

The case will now be remanded to the trial court for a ruling on “whether the Franchise Tax Board met its burden of proving that the apportionment formula does not then 'fairly represent' General Mills' business activity within California, thus warranting imposition of an alternative formula pursuant to section 25137.”

Please see full update for more information.