State Corporate Income Tax: General Principles (Portfolio 1100)
This Tax Management Portfolio covers the fundamental concepts of state corporate income tax that provide the framework for taxation in this area.
This portfolio begins by considering the extent of and limitations on states’ jurisdiction to impose corporate income taxes, with discussion of relevant federal cases. It next addresses the computation of the tax base and its division via apportionment. This discussion includes critical apportionment issues, among them the unitary business principle, the distinction between allocable and apportionable income, and state uniformity efforts. The effects of different filing methodologies on the computation and division of the tax base are also discussed. This includes explanations of the differences between separate entity returns, combined reporting, and consolidated returns, and the distinction between water’s edge and worldwide combined reporting. Other topics discussed in this portfolio include corporate income tax credits, taxes on pass-through and diregarded entities, franchise and other non-income taxes, and reporting federal audit adjustments.
Table of Contents
I. Jurisdiction to Tax
II. Computation of the Tax Base
III. Apportionment and Unitary Tax Principles
IV. Filing Methodologies
VI. Taxes Imposed Directly on Pass-Through and Disregarded Entities
VII. Audits and Reporting Federal Changes
McDermott Will & Emery LLP
Kean Miller LLP