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Legal Update

Termination Fee Deemed Apportionable Business Income by California State Board of Equalization

15 March 2012
Mayer Brown Legal Update
With more corporations making and receiving significant compensatory payments, the state tax treatment of termination fees has become increasingly important. In a closely followed decision, the California State Board of Equalization (the “Board”) ruled that a merger termination fee received by Comcast was apportionable business income for California corporate income tax purposes. The Board also ruled that QVC was unitary with Comcast such that income and apportionment information from QVC was required to be included in Comcast’s California combined return. The Board’s rulings came from the bench following roughly six hours of contentious debate. No written opinion was issued. The Board’s decision appears likely to be appealed to Superior Court.


  • Christine Cagnina
    T +1 704 444 3631
  • Paul DiSangro
    T +1 650 331 2045
  • Alvan L. Bobrow
    T +1 212 506 2313

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