Does Your Apportionment Accurately Reflect Your Business Activity in a State?

Posted by accountingweb on Jan 11 2010 903 printer friendly

In other words, does your apportionment result in a fair and accurate portion of your federal taxable income being taxed by the applicable state? If not, then opportunities may exist to utilize an "alternative apportionment method."AN ALTERNATIVE APPORTIONMENT METHOD

Some, if not all, states provide an opportunity to request or use an "alternative apportionment method" when the standard apportionment method creates "distortion" or does not properly reflect the amount of business activity in the state.

I'll be honest, the request for alternative apportionment is not an easy one, but when the apportionment factor results in a questionable amount of your taxable income being taxed in a state where you really have very little business activity, an alternative apportionment method may be the solution.

With the states on the perpetual march to lower the threshold of obtaining "nexus" or a taxable presence in a state, the apportionment factor is a way to help ensure that a state does not tax more than its "fair share" of income.

Contact me at brian.strahle@bakertilly.com or 612.876.4824 for more information.

View the discussion thread.

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State and Local Tax 360˚

My name is Brian Strahle and I hope you find this blog informative and useful. My personal mission is to fix and prevent state tax problems. I provide companies with leverage (knowledge, judgment and advocacy) so they can operate across state lines with peace of mind.

I am a multistate tax consultant and I serve clients across the U.S. from my office in Washington D.C. For more info, visit my website: www.leveragestateandlocaltax.com

Connect with me on LinkedIn. Follow me on Twitter. Join the Leverage | SALT LinkedIn Group, connect and contribute with your colleagues!

Because state and local taxes are deceptively simple and endlessly complicated.

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