By Kyle Sollie, Shail Shah, Mike Shaikh and Yoni Fix (May 17, 2018, 5:09 PM EDT) -- In October 2012, a California court of appeal held in The Gillette Company v. Franchise Tax Board that under the Multistate Tax Compact taxpayers could elect to apportion income using an equally weighted, three-factor method instead of the standard double-weighted sales method or single-sales factor method.[1] The Franchise Tax Board, or FTB, appealed the decision to the California Supreme Court. In December 2015, that court reversed the court of appeal decision, thereby denying taxpayers the right to make the Gillette election.[2] Now, the FTB has begun to issue assessments to taxpayers that made the election.[3] In addition, the FTB is also imposing the large corporate understatement penalty, or LCUP, on taxpayers that made the election. In our view, the FTB's assessment of penalties, including the LCUP, is contrary to law....