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Tax Law

SALT Trivia: Answered!

Thank you to everyone who participated in last week’s trivia question!

Last Week’s Question:
What was the first state to adopt a single-factor sales factor formula for apportioning an interstate corporation’s income for state income tax purposes?

The Answer:
In 1911, Wisconsin was the first state to formally enact a tax on corporations based on net income (although a few states imposed temporary levies on corporations during the Civil War). Law of July 13, 1911, ch. 658, 1911 Wis. Laws 984.

Since it was imposed on both domestic and foreign corporations, the law also utilized an apportionment methodology using a two-factor formula of “business transacted” and “property located” within the state. See U. S. Glue Co. v. Town of Oak Creek, 247 U.S. 321 (1918) (addressing the constitutionality of Wisconsin’s newly-enacted corporate income tax).

Keep an eye out for our next trivia question on Wednesday!