General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a customer in B. This activity is not sufficient for General to create nexus with B. State A applies a throwback rule, but State B does not. In which state(s) will the sale be included in the sales factor numerator?

Question

Quizplus · Accepted Answer

State A applies a throwback rule, which means that sales are "thrown back" to the state of origin if the destination state (B in this case) does not have nexus with the taxpayer. Therefore, the $100,000 sale will be included in the sales factor numerator for State A. State B does not have a throwback rule and does not have nexus with General, so the sale will not be included in the sales factor numerator for State B.

General Corporation Is Taxable in a Number of States