Market-Based Sourcing and Multistate Apportionment of Revenue From Services and Intangibles

Note: CLE credit is not offered on this program

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

Conducted on Wednesday, March 27, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax executives and managers with a practical guide to handling challenging state income tax apportionment involving sales of services and intangible personal property. The panel will detail various states' methods of apportioning revenues from services and intangibles, discuss current developments in states transitioning to market-based sourcing, and offer practical guidance on handling multistate apportionment challenges.


To date over half of the states have moved to apportion the sale of non-tangible personal property on a market-based approach basis rather than on a cost of performance basis. This trend has coincided with states' deviation from a traditional three-factor apportionment approach to a single-factor apportionment.

Market-based sourcing requires sellers to apportion income from the sales of services to the state where services are received or delivered or the location of the purchaser or user of the services. While one rationale for the move to a market-based apportionment is administrative ease, determining where a service or intangible is delivered presents numerous challenges to corporate tax professionals, mainly when the location of the benefit the customer receives from the service or intangible property is indeterminable.

Listen as our experienced panel provides practical guidance and the most recent developments to state initiatives to implement market-based sourcing of income arising from sales of services or intangible personal property.



  1. Prior "cost of performance" approaches to sourcing revenue from sales of services and intangibles
    1. UDITPA Section 18
    2. Plurality method
    3. Majority method
    4. Proportionate method/alternate apportionment
  2. Market-based sourcing of service revenue methods
    1. Benefit received
    2. Service received
    3. Services delivered
    4. Purchaser/customer location
  3. Multistate Tax Compact Model guidance
  4. Market-based sourcing of revenue from intangibles
  5. Throw-out rules
  6. Challenges in apportioning income
  7. Recent state developments


The panel will discuss these and other relevant topics:

  • What are the specific challenges in sourcing revenue from the sale or license of intangible property as opposed to services?
  • What are the main approaches to market-based sourcing implemented by various states?
  • What are "throw-out" rules and when/how do they apply?
  • MTC proposed guidance to implement market-based sourcing
  • When do states permit or require an alternative apportionment methodology?


Bingel, Gary
Gary C. Bingel, CPA, JD, MBA, CMI

Partner-in-Charge – State & Local Taxes

Mr. Bingel is the Partner-in-Charge of the firm’s State and Local Tax Group. With over 20 years of experience,...  |  Read More

Nachbar, Mark
Mark L. Nachbar


Mr. Nachbar specializes in multi-jurisdictional tax services and previously in his tax career was a national managing...  |  Read More

Pascal, Elizabeth
Elizabeth Pascal

Hodgson Russ

Ms. Pascal concentrates her practice in tax law with a focus on New York State, New York City, and multistate tax...  |  Read More

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