CDR SYSTEMS CORPORATION v. OKLAHOMA TAX COMMISSION, 339 P.3d 848

CDR Systems sold all assets in Sept. 2008 via stock purchase election treated as asset sale; gains designated as qualifying under 68 O.S. Supp. 2008 § 2358(D).
CDR claimed the Oklahoma Capital Gains Deduction on its 2008 Oklahoma Small Business Corporation Income Tax Return; deduction requires Oklahoma primary headquarters for at least three years prior to sale.
CDR’s primary headquarters were in Florida; Oklahoma operations included a Waynoka manufacturing facility.
OTC denied the deduction, citing lack of three-year Oklahoma headquarters; COCA reversed on dormant commerce clause grounds, and Supreme Court granted certiorari.
The Court held no discriminatory impact, purpose, or facial discrimination under the Dormant Commerce Clause; the deduction does not discriminate against interstate commerce.
Final disposition: COCA opinion vacated; OTC denial affirmed; majority decision upholds statute as not violative of the Dormant Commerce Clause.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the deduction facially discriminate against interstate commerce?	CDR contends the headquarter requirement discriminates.	OTC argues deduction applies to all taxpayers meeting criteria, not facing facial discrimination.	No facial discrimination; statute non-discriminatory.
Does the deduction have a discriminatory purpose?	CDR asserts goal to favor Oklahoma interests discriminates.	OTC claims no discriminatory purpose shown.	No discriminatory purpose.
Does the deduction have a discriminatory effect on interstate commerce?	CDR contends the HQ requirement burdens interstate commerce.	OTC maintains no adverse impact on interstate commerce.	No discriminatory effect.

Boston Stock Exchange v. State Tax Comm'n, 429 U.S. 318 (1977) (dormant Commerce Clause limits on discriminatory state taxes; protects national market)
Fulton Corp. v. Faulkner, 516 U.S. 325 (1996) (facial discrimination invalid; nondiscriminatory alternatives favored)
Westinghouse Elec. Corp. v. Tully, 466 U.S. 388 (1984) (tax credits favoring in-state activity may burden interstate commerce)
Trinova Corp. v. Michigan Dep't of Treasury, 498 U.S. 358 (1991) (state taxes may promote intrastate investment; not inherently discriminatory)
Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (case-by-case balancing when regulation is evenhanded with incidental interstate effects)
G. M. Corp. v. Tracy, 519 U.S. 278 (1997) (dormant Commerce Clause limits require consideration of market effects and competition)
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977) (four-prong test for tax validity under Commerce Clause)
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (standing and balancing in evaluating tax incentives; general principle of dormant Commerce Clause)