For a state to tax a business, the state must have:

Question

Quizplus · Accepted Answer

A state cannot tax a business unless it has rules for apportioning the company's income between in-state and out-of-state sources. This is necessary to ensure that the tax burden is fairly distributed based on the company's actual operations within the state. Without such rules, it would be difficult for the state to determine its jurisdiction or how much tax the business owes. Rules for determining profit, employee income, and costs of operations in other states may also be necessary, but they are not sufficient on their own for taxing a business.

For a State to Tax a Business, the State Must