The Alaska Supreme Court held that a petroleum company and its subsidiaries were engaged in a unitary business and upheld the state’s use of an alternative apportionment formula for corporate income tax purposes. The taxpayer, Tesoro Corporation, was a petroleum refiner and marketer with its subsidiaries organized into five distinct business segments. The court analyzed the relationship between the parent and its subsidiaries and concluded that the hallmarks of a unitary business—functional integration, centralization of management and economies of scale—were present. The parent company had almost complete control over the financing of subsidiary operations, had an active board of directors that “ma[d]e all major financial and operational decisions for the subsidiaries,” and provided centralized services to the subsidiaries. After addressing the unitary business issue, the court rejected the taxpayer’s constitutional challenge to the internal consistency of the state’s apportionment scheme. While the taxpayer presented a hypothetical to demonstrate how the apportionment scheme could produce multiple taxation, the court found that the taxpayer failed to prove that it had been harmed in fact by the alleged internal inconsistency in Alaska’s tax scheme and that it therefore lacked standing to bring the challenge. The court also held that the state’s use of an alternative apportionment formula was reasonable, although it specifically declined to decide the all-important question of whether the state was required to prove the reasonableness of its alternative apportionment formula. Tesoro Corp. v. State of Alaska, Dep’t of Revenue, No. S-14326, 2013 WL 5770530 (Alaska Oct. 25, 2013).