apportionment

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The taxpayer, a designer, marketer, and wholesaler of apparel and other fashion accessories, shipped products to its customer’s Ohio distribution center. The taxpayer argued that most of its products were subsequently shipped by its customer outside of Ohio after being received at the Ohio distribution center. And, because of this subsequent shipment, the taxpayer should…

The Florida Second Judicial Circuit granted summary judgment in favor of Checkfree Services Corporation, finding that Florida’s corporate income tax cost of performance apportionment rule required the sourcing of receipts from Checkfree’s online bill pay services based on Checkfree’s own transactions and activities.

Checkfree acted as an agent for financial institution clients and facilitated online…

The Wisconsin Tax Appeals Commission held that a taxpayer could not look through an intermediary and source receipts to the location of software use by end-users.

The taxpayer created database management system software to be used by the software developers. Epic Systems Corporation (Epic), a Wisconsin-based software developer, created and licensed software used in the…

California adopted UDITPA in 1966, with its equally weighted three-factor formula for apportioning multistate income – property, payroll, and sales. Over time, however, the sales factor has emerged as the primary mechanism for determining tax liability in California.

Today, California’s sales factor is the same as it was nearly 60 years ago. Although the fraction…

A Florida circuit court held for the Department of Revenue in a dispute over Florida’s apportionment formula applicable to companies providing transportation services in the state. Florida apportions income of transportation companies by multiplying the taxpayer’s income by a fraction, the numerator of which is “revenue miles in [Florida]” and the denominator of which is…

The Massachusetts Appellate Tax Board (ATB) found that an out-of-state footwear company qualified as a “manufacturing corporation” for purposes of the state corporate excise (income) tax despite outsourcing the manufacturing of its shoes to third parties. The consequence of the “manufacturing corporation” classification was that the taxpayer had to use a single-sales factor apportionment formula…

The California Franchise Tax Board’s method of taxing banks and financial institutions is consistently complex, and a bit messy. This complexity would worsen under the January budget proposal of California Governor Gavin Newsom to tax banks (and savings and loans) using single-sales-factor apportionment.

In this installment of “A Pinch of SALT” published by Tax Notes…

The New York Tax Appeals Tribunal affirmed a Division of Tax Appeals (DTA) ruling, holding that deferred compensation earned by a partnership should be allocated to New York based on the business allocation percentage (BAP) from the year in which the services were performed, rather than the year in which the deferred income was recognized.…