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A foreign firm, organized under the laws of a State other than Alabama, does not have similar leeway to control its tax base. In 1986, the Reynolds Metals Company and other foreign corporations sued Alabama\u0027s tax authorities, seeking a refund of the foreign franchise tax they had paid on the ground that the tax discriminated against foreign corporations in violation of the Commerce and Equal Protection Clauses. The Alabama Supreme Court rejected Reynolds\u0027 claims, holding that the special burden imposed on foreign corporations simply offset a different burden imposed exclusively on domestic corporations by Alabama\u0027s domestic shares tax. During the Reynolds case, the South Central Bell Telephone Company and others brought a suit asserting similar Commerce and Equal Protection Clause claims. The Alabama trial court agreed with South Central Bell that the tax substantially discriminated against foreign corporations, but nonetheless dismissed their claims as barred by res judicata in light of the State Supreme Court\u0027s Reynolds decision. The Alabama Supreme Court affirmed.\u003C\/p\u003E\n","question":"\u003Cp\u003EDoes Alabama\u0027s franchise tax discriminates against interstate commerce, in violation of the Commerce Clause? Did the Alabama Supreme Court\u0027s refusal to permit the South Central Bell Telephone Company and others to raise their constitutional claims because of res judicata deprive them of the due process of law guaranteed by the Fourteenth Amendment?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003EYes and yes. In an opinion delivered by Justice Stephen G. Breyer, the Court held that the Alabama franchise tax was unconstitutional. Justice Breyer wrote for the Court that, \u0022Alabama law gives domestic corporations the ability to reduce their franchise tax liability..., while it denies foreign corporations that same ability. And no one claims that the different tax rates for foreign and domestic corporations offset the difference in the tax base. The tax therefore facially discriminates against interstate commerce and is unconstitutional unless the State can offer a sufficient justification for it.\u0022 The Court concluded the State could not justify the tax. The Court also held that the State Supreme Court\u0027s decision was inconsistent with the Fourteenth Amendment\u0027s due process guarantee because the South Central Bell case was unrelated to the court\u0027s prior judgement and thus could not be bound by it. 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