3M Case Marks Pathway for Coca-Cola’s Transfer Pricing Victory

Coca-Cola Co. has an opportunity to leverage a recent federal appeals court transfer pricing decision against the IRS in its own dispute over as much as $18 billion in taxes and interest tied to royalty payments to the beverage giant’s international affiliates.

In a case involving 3M Co., the US Court of Appeals for the Eighth Circuit earlier this month reversed the US Tax Court, determining that IRC Section 482 doesn’t necessarily grant the IRS power to reallocate income from overseas units to a US company for tax purposes.

The decision marked an upheaval in how courts interpret ...