market sourcing

Subscribe to market sourcing via RSS

Ever the trendsetter, California is hip to transparency and has posted proposed budget trailer bill language on the Department of Finance Web site, www.dof.ca.gov. The language confirms what taxpayers already knew: A target is on their backs as budget negotiations begin. The tax provisions specific to business taxpayers include a repeal of California’s Enterprise Zone Program and all related credit carryovers; mandatory single sales factor apportionment; mandatory market sourcing; tax shelter amnesty; and a financial institutions records match (FIRM) program. Other language includes a legislative constitutional amendment to extend current tax rates for five years. All of these proposals require a two-thirds legislative vote. However, the tax shelter amnesty and FIRM provisions could be enacted with a mere majority vote.Continue Reading California Mischief: Budget Tax Proposals Repeal Credits, Limit Apportionment Methods

The Utah State Tax Commission has amended its rules for apportioning financial institution receipts attributable to services from a costs-of-performance sourcing rule to a market-based sourcing rule (Utah Admin. R. R865-6F-32(3)(l)). Effective December 9, 2010, financial institutions must include in the sales factor numerator receipts from services not otherwise specifically addressed in the regulation “if the purchaser of the services receives a greater benefit of the services in Utah than in any other state.” 

The change in sourcing methodology is consistent with Utah’s recently amended general corporation apportionment statute, Utah Code Ann. § 59-7-319, which similarly provides for the market sourcing of services (based on where the purchaser receives a greater benefit of the service). The change to market sourcing for financial institutions is another departure by Utah from the Multistate Tax Commission’s (MTC) model regulations for the apportionment of financial institution income. Continue Reading Utah Goes Market for Sourcing of Financial Institution Services

The Multistate Tax Commission (MTC) held its Fall Uniformity Committee Meetings in Atlanta, Georgia on December 7-9. With a significant turnover in state tax commissioners expected as a result of the November elections, it will be interesting to see if any of the decisions made by MTC representatives the last few years are revisited at…

Chaos resulting from the California budget crisis reached a crescendo in recent weeks because of a new budget agreement, a bevy of voter referendums addressing tax legislation, and new regulations addressing corporate income tax apportionment issues. In the aftermath of the chaos, California has again significantly modified its corporate income tax apportionment provisions, for…