Disney, IBM New York Tax Cases Carry Constitutional Implications

Walt Disney Co. and International Business Machines Corp. will try to convince New York’s highest court Wednesday to accept their arguments on the tax treatment of foreign royalties and on constitutional questions involving multinational companies more broadly.

Disney and IBM want the high court to overturn intermediate appeals court rulings that barred them from deducting payments from their foreign affiliates that produce and license intellectual property. The New York Court of Appeals’ eventual ruling in the consolidated cases could have big consequences for Disney and IBM, which have $4 million and $64 million on the line, respectively. Other companies which ...