Income Taxes: State Formulary Apportionment Methods (Alabama Through Michigan) focuses on the allocation and apportionment of income on a state-by-state basis and provides a detailed discussion of the different methods the states use in various situations. In addition to identifying when a taxpayer has the right to allocate and apportion income, this Portfolio, written by Joseph X. Donovan, Esq., Sullivan & Worcester, J. Gary Dean, CPA, and Karen Nakamura, CPA of PricewaterhouseCoopers LLP, provides guidelines for determining the classification of business and nonbusiness income; the rules for sourcing nonbusiness income; the computation of the apportionment formula and its component factors; the use of alternative methods of allocation and apportionment; special industry allocation and apportionment rules; and other miscellaneous issues such as apportionment for capital stock and net worth tax purposes.
This Portfolio provides information for each state in each of the following categories:
Income Taxes: State Formulary Apportionment Methods (Alabama Through Michigan) allows you to benefit from:
This Portfolio is part of the Premier State Tax Library, a comprehensive series, which covers major state tax transactions and issues with expert, in-depth analysis, and offers commentary on a wide range of multi-state and state-specific taxation topics, including Sales and Use, Corporate Income, Individual Income, Property, Gross Receipts, Limitations on States' Authorities to Tax, Credits and Incentives, Electronic Commerce, Mergers and Acquisitions, Procedure and Administration, Special Industries, and more.
Detailed Analysis
Authors
1160.01. ALLOCATION AND APPORTIONMENT
A. Constitutional Background
B. Commerce Clause
C. Due Process Clause
D. Public Law 86–272
E. Definition of Terms
F. Division of the Tax Base
G. Business vs. Non–Business Income Distinction
1. Non–Business Income
2. Business Income
H. Sales Factor Introduction
1. “All–or–Nothing” or “Pro Rata” Test
2. Treatment of Receipts from the Licensing of Intangibles
I. Property Factor Introduction
J. Payroll Factor Introduction
K. Alternative Methods
L. Allocation And Apportionment For Groups Of Related Entities
1160.02. ALABAMA
A. Division of Income
B. Business/Nonbusiness Income
C. Allocation Methods
D. Apportionment Formula
E. Sales Factor
F. Property Factor
G. Payroll Factor
H. Alternative Methods
I. Special Industries
J. Other Issues
1160.03. ALASKA
1160.04. ARIZONA
1160.05. ARKANSAS
1. Financial Institutions
2. Railroads
3. Public Utilities
4. Oil and Gas Pipelines
5. Transportation Companies
1160.06. CALIFORNIA
1160.07. COLORADO
1. Three–factor Formula
2. Two–factor Formula
1160.08. CONNECTICUT
1160.09. DELAWARE
1160.10. DISTRICT OF COLUMBIA
1160.11. FLORIDA
1160.12. GEORGIA
1. Tangible Personal Property
2. Service Receipts
1160.13. HAWAII
1160.14. IDAHO
1160.15. ILLINOIS
1. Business Income
2. Nonbusiness Income
a. Sale of Shares in Subsidiary
b. Liquidation of Nonresident Corporation
1160.16. INDIANA
Introductory Material
1160.17. IOWA
1160.18. KANSAS
1160.19. KENTUCKY
1160.20. LOUISIANA
1160.21. MAINE
1160.22. MARYLAND
1160.23. MASSACHUSETTS
1160.24. MICHIGAN
Working Papers
Item Description Sheet
Worksheet 1 Business/Non–business Income Audit Guidelines
Worksheet 2 Corporate Income Tax Apportionment Formulas
Worksheet 3 UDITPA (Article IV of Multistate Tax Compact) Uniform Division of Income for Tax Purposes Act – Annotated
Worksheet 4 Multistate Tax Commission – Allocation and Apportionment Regulations Pertaining to Business/Nonbusiness Income
Worksheet 5 Multistate Tax Commission – Proposed Regulations on Allocation and Apportionment – Excerpts (“April 1995 Proposal”)
Worksheet 6 American Institute of Certified Public Accountants Comments Regarding Multistate Tax Commission Proposed Amendment to MTC Regulation IV.1.(a). Business and Nonbusiness Income Defined
Worksheet 7 Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States Under Public Law 86–272 as Revised January 22, 1993 (Phase One Statement)
Worksheet 8 Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States Under Public Law 86–272 as Adopted July 29, 1994 (Phase Two Statement)
Worksheet 9 Excerpt from BNA 2008 Survey - Throwback/Throwout Rules
Worksheet 10 State Conformity to UDITPA
Worksheet 11 State Throwback Rules
Bibliography