Corporate Apportionment and Sourcing Rights in Multistate Tax Compact States

Key Implications Triggered by California's Gillette Case

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

Conducted on Wednesday, January 23, 2013

Recorded event now available

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Program Materials

This teleconference will explore the important multistate corporate income tax implications arising from controversies about how closely member states must track the Multistate Tax Compact on apportionment and sourcing.


The much-watched Gillette litigation in California has far-reaching implications for companies with income tax obligations in 18 states (California, Texas and Michigan among them) belonging to the Multistate Tax Compact, affecting sourcing of service and intangible asset revenue as well as apportionment.

Gillette raises questions on whether companies can take favorable tax positions based on a state's MTC membership, even though a revenue agency may take a more restrictive approach. Making the decision more uncertain is the Michigan IBM ruling that takes the state's side on apportionment.

Tax professionals with multistate companies face risky, but also potentially rewarding, choices on apportionment and sourcing elections, timing of filing state returns with those positions, and penalty implications. They need an analysis of big picture issues in MTC states and potential directions to take.

Listen as our panel of tax advisors explores the very practical and bottom line implications for corporate taxpayers from the latest legal developments involving the Multistate Tax Compact.



  1. California's Gillette case
    1. FTB's apportionment formula vs. MTC 3-factor apportionment
    2. Status of state supreme court appeal
  2. Implications with sourcing of revenue from services and sales of intangible assets
    1. Parallel issues with what sections of MTC agreements say on sourcing
  3. Issues with other state cases and administrative guidance on similar issues
    1. Michigan's IBM decision
    2. Oregon Revenue Department guidance on protective refund claims
    3. Other examples
  4. Practical decisions for multistate companies
    1. Protective refund claims
    2. Taking positions on original or amended returns in member states
    3. Potential for additional penalties and interest if unsuccessful


The panel will address issues such as these:

  • What rights do certain sections of the MTC agreement give to corporate income taxpayers filing in MTC member states?
  • What happens when a member state decides to take a different direction on apportionment or sourcing than the MTC does?
  • What actions can a company prudently consider regarding positions on returns in MTC member states, based on the recent legal battles?
  • What are the risks with taking those positions, if circumstances change?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


Bruce Ely
Bruce Ely

Bradley Arant Boult Cummings

He has more than 30 years of experience handling federal and state tax compliance and planning matters for large...  |  Read More

Walter Pickhardt
Walter Pickhardt

Faegre Baker Daniels

He has more than 30 years of experience representing business clients on federal and state tax matters, in disputes at...  |  Read More

Donald Griswold
Donald Griswold

Crowell & Moring

He works with corporate tax executives, some at Fortune 500 companies, on state and local tax issues and tax...  |  Read More

Jeremy Abrams
Jeremy Abrams

Crowell & Moring

He represents corporations, partnerships and individuals in tax matters, particularly involving multi-state tax...  |  Read More

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