On April 15, 2008, the U.S. Supreme Court vacated the decision of the Illinois Appellate Court in MeadWestvaco Corp. v. Illinois Department of Revenue and remanded the case back to that court for further consideration. The case involved whether it was constitutionally permissible for Illinois to apportion Mead Corporation's gain from the sale of assets of Lexis/Nexis. The state appellate court had concluded that Mead and Lexis/Nexis were not unitary, yet that state court held that apportionment was permissible based on a finding that there was an "operational purpose" for Mead to own Lexis/Nexis. 

The U.S. Supreme Court reasoned that the state appellate court, having found no unitary relationship, erred in considering whether Lexis/Nexis served an "operational purpose" in Mead's business. Thus, the Supreme Court held that on remand the state appellate court could determine whether the taxpayer and the Lexis/Nexis business constituted a unitary business. 

The attached Multistate Tax Alert provides an overview of the U.S. Supreme Court's decision, as well as a factual and procedural background of the case.