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

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

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Conducted on Thursday, March 30, 2023

Recorded event now available

or call 1-800-926-7926

This course 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 market-based sourcing, and offer practical guidance on handling multistate apportionment challenges.


To date, about two-thirds 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 by or delivered to the purchaser or where the benefit of the services is received. While one rationale for moving to a market-based apportionment is administrative ease, determining where a service or intangible is delivered or where such benefit is received presents numerous challenges to corporate tax professionals. This is especially true when the location where the buyer receives the benefit 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
  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 instead of 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?


Novitsky, Mitchell
Mitchell Novitsky

Eisner Advisory Group

Mr. Novitsky is a Director in the firm’s State and Local Tax Group. With over 30 years of experience, his...  |  Read More

Pardue, William
William T. Pardue

Managing Director, State and Local Tax

Mr. Pardue specializes in providing state and local corporate income and franchise tax solutions throughout the nation...  |  Read More

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