Wisconsin Department of Revenue v. William Wrigley, Jr. Co., 112 S.Ct. 2447 (1992)

What is the scope of the term "solicitation of orders" as used in 15 U.S.C. §381(a), exempting companies from the imposition of State net-income tax?


The Supreme Court held that the solicitation of orders and activity ancillary to the solicitation of orders is covered by the federal statute and exempt from state net-income taxes. Activity is not ancillary to the solicitation of orders if it serves an “independent business function quite separate from requesting orders”. The court found that trading out stale gum, delivering gum to retailers from the sales forces’ supply instead of ordering directly from the company and storage of gum in the state by the sales force were not ancillary to the solicitation of orders. In-State recruitment of a sales force, training, recruitment and the use of hotels for sales meetings are all ancillary to the solicitation of orders, and exempt from state net-income tax.

Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/WisconsinDeptRevenue_v_WilliamWrigleyJrCo112SCt2447-1992.php

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Reference Info:Federal, Federal Circuit | United States

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