The California Court of Appeal upheld Comcast’s $2.8 million franchise tax refund. The court determined that: (1) Comcast and its subsidiary QVC were not unitary, such that QVC was properly excluded from Comcast’s combined group, and (2) a termination fee Comcast received from a failed merger constitutes apportionable business income. Comcast and QVC were not unitary because Mobil Oil’s three hallmarks of a unitary relationship—centralized management, functional integration and economies of scale—were not present. The court concluded that because QVC’s day-to-day operations were conducted by QVC’s management independently from Comcast a non-unitary finding was justified. On the second issue, the court held that a merger termination fee satisfied California’s transactional test for business income. Sutherland represented the taxpayer in this matter. ComCon Prod. Serv. I Inc. v. Franchise Tax Bd., No. B259619 (Cal. Ct. App. 2016).