Does Sales-Only Apportionment Violate International Trade Rules?
Charles E. McLure Jr.
Stanford University - The Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER)
University of Georgia School of Law
Tax Notes, Vol. 96, No. 11, September 9, 2002
There has been a pronounced change in the formulas states use to apportion the income of multistate corporations from one that placed equal weight on payroll, profits, and sales to one that places at least half the weight on sales, and eight states base apportionment solely on sales. This report, which is intended to stimulate further analysis and debate, rather than provide a definitive conclusion, suggests that sales-only apportionment may violate international trade rules that prohibit export sales.
Date posted: September 6, 2002