Home : Multistate : Corporate Income Tax : Allocation and Apportionment

Allocation: The direct assignment of nonbusiness income to a particular state. Apportionment: The proportionate assignment of business income to various states, based on a formula which varies by state but typically includes property, payroll and sales (3-factor formulary apportionment).

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Multistate Corporation Allocation And Apportionment Links:

AICPA Multistate Tax Issues Site Preview & Search
Developed by the AICPA State and Local Taxation Committee. Discusses the three methods of dividing the income tax base of a multistate corporation among the states in which it is taxable: 1. separate accounting, 2. specific allocation, and 3. formulary apportionment.

Allied-Signal v. Director, Division of Taxation, 504 U.S. 768 (1992) Site Preview & Search
New Jersey corporate income tax. Cite as 504 U.S. 768, 112 S.Ct. 2251, 119 L.Ed.2d 533 (1992). Unitary business principle. ASARCO and Woolworth upheld; apportionable part of gain on sale of stock is taxable.

Barclay's Bank PLC v. Franchise Tax Bd., 512 U.S. 298 (1994) Site Preview & Search
California franchise tax. Cite as 512 U.S. 298, 114 S.Ct. 2268, 129 L.Ed.2d 244 (1994). Commerce and Due Process Clauses. Application of Complete Auto's guides and "additional scrutiny" required when a State seeks to tax foreign commerce: 1. the enhanced risk of multiple taxation, and 2. impairment of federal uniformity in an area where federal uniformity is essential (speaking with one voice in international trade). See also Colgate-Palmolive Company, v. Franchise Tax Board of California, 512 U.S. 298 (1994)

Butler Brothers v. McColgan, 315 U.S. 501 (1942) Site Preview & Search
California franchise tax. Cite as 315 U.S. 501, 62 S.Ct. 701, 86 L.Ed. 991 (1942). Distinguised Han Rees' Sons and held that apportionment of unitary income was appropriate. Separate accounting analysis rejected.

Colgate-Palmolive Company, v. Franchise Tax Board of California, 512 U.S. 298 (1994) Site Preview & Search
California franchise tax. Cite as 512 U.S. 298, 114 S.Ct. 2268, 129 L.Ed.2d 244 (1994). Commerce and Due Process Clauses. Application of Complete Auto's guides and "additional scrutiny" required when a State seeks to tax foreign commerce: 1. the enhanced risk of multiple taxation, and 2. impairment of federal uniformity in an area where federal uniformity is essential (speaking with one voice in international trade). See also Barclay's Bank PLC v. Franchise Tax Bd., 512 U.S. 298 (1994)

Container Corp. v. Franchise Tax Bd., 463 U.S. 159 (1983) Site Preview & Search
California franchise tax. Cite as 463 U.S. 159, 103 S.Ct. 2933, 77 L.Ed. 2d 545 (1983). Unitary business concept; fair apportionment; Foreign Commerce Clause and "arm's-length" analysis.

Hans Rees' Sons v. State of North Carolina ex. rel. Maxwell, 283 U.S. 123 (1931) Site Preview & Search
North Carolina income tax. Cite as 283 U.S. 123, 51 S.Ct. 385, 75 L.Ed. 879 (1931). Commerce clause violated by apportionment method which operated unreasonably and arbitrarily, in attributing to North Carolina a percentage of income out of all appropriate proportion to the business transacted in the State.

Norfolk & Western Railroad Co. v. Tax Commission, 390 U.S. 317 (1968) Site Preview & Search
Missouri property tax on rolling stock. Cite as 390 U.S. 317, 88 S.Ct. 995, 19 L.Ed. 2d 1201 (1968). Due Process and Commerce Clauses violated by mileage formula authorized by Missouri statute, which amounted to an unconstitutional attempt to exercise state taxcing power on out-of-state property.

Multistate Corporation Allocation And Apportionment Related Categories:

Multistate : Corporate Income Tax : Payroll Factor
Multistate : Corporate Income Tax : Property Factor
Multistate : Corporate Income Tax : Sales Factor

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