Cases

Tax Commissioner of the State of W. Va. v. MBNA America Bank, N.A.

Case Number:
33049
Case Date:
19-09-2006
Case Issue:

Appellant, MBNA America Bank (hereinafter “Bank”) is a Delaware financial organization whose principal business is issuing and servicing Visa and MasterCard credit cards.   The Bank solicits, issues and services credit cards to people with West Virginia addresses.   The taxes at issue are computed by taxing the portion of income attributable to gross receipts received by the Bank from this West Virginia source pursuant to the West Virginia Business Franchise Tax and Corporate Net Income Tax under W.Va. Code §11-23-5(a) and §11-24-7(b).   This case originated as an action by the Bank to recover a refund of the taxes paid for the years 1998 and 1999.   Initially, the Chief Administrative Law Judge of the Office of Tax Appeals determined that the Commerce Clause of the United States Constitution and the applicable state statute prohibit the Commissioner’s imposition of the tax at issue.   The State Tax Commissioner appealed the decision of the Chief Administrative Law Judge to the circuit court.   The circuit court reversed the final decision of the Office of Tax Appeals and denied the Bank’s cross-petition for appeal holding that the Commerce Clause permitted the Commissioner’s imposition of the tax.   The Bank now appeals that decision, asking this Court to reverse the circuit court, arguing that the taxes as imposed violate the Commerce Clause of the United States Constitution.