In a much anticipated decision (here), the Texas Supreme Court today issued its decision in Graphic Packaging Corp. v. Hegar, No. 15-0669, (December 22, 2017). The Court held that Graphic Packaging could not use the three-factor apportionment formula provided for in the Multistate-Tax Compact for apportioning Texas franchise tax, notwithstanding that Texas is a member of the Compact. The Court of Appeals in Austin had previously held that the three-factor apportionment formula in the Compact is not available to Texas taxpayers because the Texas franchise tax is not an income tax. Without deciding if the Texas franchise tax is in fact an income tax, the Texas Supreme Court otherwise affirmed the decision of the Court of Appeals, holding that the Texas Legislature intended that the single-factor apportionment formula provided for in Section 171.106 of the Texas Tax Code be the exclusive formula for apportioning Texas franchise tax. Additionally, the Court held that the Compact is not a binding regulatory compact for the State of Texas, meaning that even if both Section 171.106 and the Compact were intended to be viable formulas for apportioning Texas franchise tax, the terms of the Compact are not binding on the State. For this reason, Graphic Packaging could not use the three-factor apportionment formula in the Compact for Texas franchise tax.