Business vs. Nonbusiness Income: When to Allocate and When to Apportion
UDITPA Standards, Transactional and Functional Tests for Income Characterization
Recording of a 110-minute CPE webinar with Q&A
This course will provide SALT tax advisers with a thorough and practical guide to distinguishing between business and nonbusiness income for purposes of determining multistate allocation vs. apportionment. The panel will discuss distinctions between business income which must be apportioned and allocable (nonbusiness) income, detail states that vary from general rules, demonstrate various tests for distinguishing income, and outline possible tax advantages to structuring nonbusiness income by domicile.
Outline
- Allocation vs. apportionment principles
- Determining business income
- Transactional test
- Functional test
- Multistate Tax Commission definition
- Other tests and standards
- State tests
- Characterization of specific types of income
- Domicile questions
Benefits
The panel will discuss these and other issues:
- Dividend, interest, capital gains, and royalty income as business vs. nonbusiness income
- Income from partnership interests owned by a corporation
- Classification of rents
- State trends in following or deviating from UDITPA principles
Faculty
Michael J. Cataldo
Shareholder
Cataldo Tax Law
Mr. Cataldo represents corporate and individual clients in state and local tax controversies across the country during... | Read More
Mr. Cataldo represents corporate and individual clients in state and local tax controversies across the country during audits, administrative appeals, litigation and settlement. He also provides state and local tax planning and transactional advice. His practice focuses primarily on state and local corporate income and franchise tax, sales and use tax, real property transfer tax, personal income tax and gross receipts tax imposed by jurisdictions throughout the country. He regularly represents and advises clients from a broad range of industries on issues such as nexus, apportionment, business/non-business income, unitary combined reporting, and the taxability and sourcing of transactions for sales and use taxes.
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Stacey L. Roberts, CPA
State and Local Tax Director
TaxOps
Ms. Roberts has been making state and local tax (SALT) less taxing for thousands of businesses over the last 25 years.... | Read More
Ms. Roberts has been making state and local tax (SALT) less taxing for thousands of businesses over the last 25 years. As a director of the SALTovation team at TaxOps, she guides dynamic businesses through compliance and strategic planning focused on minimizing risk and strengthening tax positions. Ms. Roberts honed her specialty at Andersen Worldwide/Andersen LLP, KPMG and Deloitte before moving in-house with a Fortune 500 company to administer state and local tax. She has also led the national SALT practice at a regional firm. Ms. Roberts is a member of the Colorado Legislative Task Force Concerning Tax Policy and a frequent speaker, instructor and author on SALT issues for industry and professional organizations.
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