TLS as president, one page, 8.5 x 11, White House letterhead, May 13, 1993. Letter to Republican Congressman Carlos J. Moorhead of California. In full: “Thank you for your letter concerning the Barclays case. I appreciate your concerns about the potential liability for California in this matter. The Barclays case presents considerations of great importance and sensitivity both at home and abroad. On the one hand, California has modified its unitary system since the tax years at issue in this case. I believe that these modifications represent substantial progress toward resolving concerns expressed by foreign governments and foreign companies regarding unitary taxation. On the other hand, I understand these concerns and recognize the risk of retaliation by foreign governments. In view of these competing considerations, I recently decided that the Administration will not file an unsolicited amicus brief in the Barclays case and instead will work closely with representatives of both state and foreign governments to address these issues in a prompt, comprehensive and equitable manner. Once again, thank you for your letter. I look forward to working with you on this and other issues.” In fine condition, with three punch holes to left edge, which could be matted out.
In November 1992 Barclays Bank International filed suit against the State of California's Franchise Tax Board. The well-known British bank challenged the tax board's method of unitary taxation for multinational corporations, the "worldwide combined reporting method" in which the state taxed "in proportion to the average percentage of worldwide payroll, property, and sales located in the state." Barclays' lawyers argued the taxation was unconstitutional under the foreign commerce clause.
Here, Clinton refused to file an amicus brief requested by California Congressman Carlos J. Moorhead fearing "retaliation by foreign governments" and suggested working with state and foreign representatives to resolve the issue. The California Supreme Court eventually ruled against Barclays for which they paid the $100,000 tax. They continued to fight the tax with an appeal to The Supreme Court. Later, Clinton changed his mind and filed the brief for The Supreme Court; on June 20, 1994, the court voted 7 to 2 in favor of the State of California, saving the state from a possible $4 billion liability for tax refunds and establishing the validity of the worldwide combined reporting as a method of taxation for multinational corporations. Ironically, before the Supreme Court issued their decision, the State of California abandoned the worldwide combined reporting method for taxation. Pre-certified PSA/DNA and RR Auction COA.
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