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Applying Market-Based Sourcing Rules: Nowhere Sales, Double Taxation, and Minimizing SALT Tax

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Friday, February 9, 2024

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This webinar will go beyond explaining market-based sourcing rules. The SALT professional speaker will walk you through specific examples of the application of these rules in key states and varying industries. The webinar will point out how to handle nowhere sales, avoid double taxation, and discuss planning opportunities that exist to minimize the overall state income tax burden of taxpayers working in multiple states.


States use three methods for sourcing sales. These include sourcing based on where service is performed; cost of performance (COP) receipts apportioned based on where the cost of service is incurred; and market-based sourcing. Market-based sourcing rules are meant to tax receipts based on where customers receive or benefit from a product or service. These rules for market-based sourcing differ from state to state but can be divided into the following categories:

  • where the benefit is received
  • where the service is received
  • where the service is delivered
  • where the customer is located

The varying methods of applying these rules increase the complexity of taxing multistate activity for SALT professionals. These conflicting rules can create nowhere taxation and double taxation.

The California Franchise Tax Board recently released Legal Ruling 2022-01. It reiterates that California apportions sales from services "to the extent the purchaser of the service received the benefit of the services" in California. It delves into the complexity of adhering to this rule by explaining that a taxpayer must answer four questions: (1) Who is the customer? (2) What is the service provided? (3) What is the benefit of the service being received by the customer? and (4) Where is the benefit of the service received by the customer? Each of these questions, considered individually, gives rise to additional questions and complexities. SALT practitioners working with businesses in multiple states need to not only grasp state market-sourcing rules but also be able to apply these appropriately in different states and industries.

Listen as George W. Rendziperis, JD, Managing Director, State and Local Tax at M+D Consulting, provides examples of the application of these rules in New York, California, and other states for practitioners working with multistate businesses.



  1. State market-based sourcing taxation
  2. Specific states
    1. California
    2. New York
    3. Other key states
  3. Specific industries
  4. Caveats and considerations
    1. Nowhere sales
    2. State throwback and throwout rules
    3. Double taxation
  5. Examples of the application of market-based sourcing rules
  6. Planning to minimize multistate taxation


The panelist will cover these and other key issues:

  • How market-based sourcing rules are applied in California and other key states
  • How states apply nowhere, throwback, and throwout rules
  • Examples of the application of the market-based sourcing rules in specific industries
  • How states' varying methods of multistate taxation can result in double taxation of income
  • The application of one-factor apportionment and market-based sourcing


Rendziperis, George
George W. Rendziperis, JD

Managing Director, State and Local Tax
Hancock Askew & Co.

Mr. Rendziperis provides state and local tax advice to companies in the financial services, private equity, real...  |  Read More

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