Multi-jurisdictional Tax Issues Flashcards
Nexus: minimum level of contact a taxpayer may have with a jurisdiction to be subject to its tax
following may trigger nexus in a state in which a company operates:
owning or leasing tangible personal or real property
sending employees into the state for training or work
soliciting sales in a state
providing installation, maintenance, to customers within a state
accepting or rejecting sales orders within the state or accepting returns.
Calculation of apportionment factor
([Property and rent expense located within state / total property] +
[Payroll paid to employees within the sate / total payroll]
+
[Sales from sources within the state / total sales] ) / 3
Allocation of Nonbusiness Income and Apportionment of Business Income
multistate corporations approach to the apportionment and allocation of its income; corporation will allocate its nonbusiness income and its business income