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Multistate Partnerships: Navigating Various State Taxation Rules of Corporate Partners

Business vs. Nonbusiness Income Characterization, Aggregate vs. Entity Determination, and More

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 Thursday, August 11, 2022

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers and professionals with a detailed and practical guide to critical state tax issues and trends impacting partners owning shares of multistate partnerships. The panel will discuss critical questions such as whether the character of pass-through income is determined at the partner or partnership level and whether the pass-through income must be considered on an "aggregate" basis or an "entity" basis.


Corporate partners in multistate partnerships can't escape nexus. Among the significant tax challenges these partnerships face is determining whether a partnership creates nexus for a nonresident partner. Nexus may materially impact filing obligations, including combined reporting and P.L. 86-272 positions and throwout and throwback rules.

The character of partnership income, e.g., business or nonbusiness, also must be determined at the partnership level or the partner level. Very few states have issued any guidance on where to make the income determination, and those states that have addressed the question have mixed results.

Because business income must be apportioned, while nonbusiness income must be allocated to the source state, taxation of partnership income varies from state to state. Additional complexities arise depending on whether a state has adopted the "aggregate" or "entity" approach to the apportionment of partnership income. These determinations may materially impact the computation of state blended rates for provision calculations and whether the corporation must remit payment to a particular state.

Likewise, various states have adopted different reporting regimes regarding withholding or composite return obligations. Corporate tax professionals must know the complex rules to avoid adverse tax consequences in multistate partnership scenarios.

Listen as our experienced panel offers a comprehensive view of states' approaches to taxing corporations on multistate partnership income.



  1. Partnership nexus
  2. Allocation vs. apportionment of partnership income
    1. Aggregate vs. entity approach
    2. Business vs. nonbusiness income--differing state approaches
    3. States taking a unitary approach
  3. State withholding


The panel will discuss these and other critical issues:

  • Nexus implications
  • States that require business/nonbusiness income determination at partner vs. partnership level
  • Determination of partnership income on an aggregate basis vs. entity basis
  • Apportionment under the aggregate approach
  • Reconciling different states' unitary factor analysis
  • State withholding
  • Recordkeeping, documentation, and workpapers


Roberts, Stacey
Stacey L. Roberts, CPA

State and Local Tax Director

Ms. Roberts has been making state and local tax (SALT) less taxing for thousands of businesses over the last 25 years....  |  Read More

Smith, Meredith
Meredith Smith, CPA

Senior Tax Manager

Ms. Smith expertly weaves real-life examples into why business taxpayers, tax professionals, and tax providers should...  |  Read More

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