Alternative Apportionment: Who Bears the Burden Of Proof and What Standard of Proof Applies?

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

To deal with situations where application of the state's standard apportionment formula leads to unfair or unconstitutional taxation—for a certain industry segment or for a specific taxpayer—most states have adopted alternative apportionment formula mechanisms that the state tax authorities or taxpayers may elect to use. But, in addition to other controversies involving alternative apportionment, it is often unclear which party bears the burden of proof for showing that a departure from the standard apportionment formula is warranted. Also, the standard of proof to be employed in such cases is uncertain in many states.