The murky waters of state taxation, now characterized by single-sales-factor apportionment and economic nexus trends, continue to plague corner office decision-makers and the practitioners who counsel them. [See "Experts: Economic Nexus and Single-Sales-Factor Apportionment May Lead to Discrimination," taxanalysts® State Tax Today, August 12, 2014.] The confusion seems only to be intensifying. Controllers and other corporate leaders, who are, in part, graded internally on their ability to optimize their firms's tax liabilities, face moving targets that appear to be increasingly elusive.
The focus on economic nexus at the 2014 Georgetown University Law Center Advanced State and Local Tax Institute is well taken. Discrimination questions revolving around economic nexus persist against a backdrop of uncertainty that can sting leadership and shareholders alike. Moreover, forces driving alternative apportionment requests show no signs of abating. From a CFO's standpoint, it all looks a lot like herding cats.
Bottom line: Nothing about state tax analysis and planning is easy. Nothing about it will ever be easy.
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