Thank you to everyone who participated in last week’s trivia question!
Last Week’s Question:
What was the first state to adopt a single-factor sales factor formula for apportioning an interstate corporation’s income for state income tax purposes?
Iowa. In Moorman Mfg. Co. v. Bair, 437 U.S. 267 (1978), the U.S. Supreme Court held that Iowa’s use of a single-sales factor did not violate the U.S. Due Process Clause or Commerce Clause, paving the path for a trend towards increasing weight placed on sales factors, while reducing the emphasis on property and payroll factors.
The dissent noted this particularity, with Justice Powell noting that “[i]t suffices to dispose of this case that nearly all the other States use a basic three-factor formula, while Iowa clings to its sales-only method.” Moorman Mfg. Co., 437 U.S. at 297, n.9.
Keep an eye out for our next trivia question on Wednesday!