A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

Question

Quizplus · Accepted Answer

A state's apportionment formula is typically used to divide business income among the states where a company operates or has a tax nexus, not nonbusiness income. Nonbusiness income is usually allocated specifically to the state(s) where the income is generated or has a direct connection.

A State's Apportionment Formula Divides Nonbusiness Income Among the States