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State Throwback and Throwout Rules: "Nowhere" Income, PL 86-272, Tangible and Intangible Sales

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

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Conducted on Thursday, August 10, 2023

Recorded event now available

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This course will provide an overview of the policy reasons behind the throwback and throwout rules and discus how the policy rational has been shifting in addition to providing some practical examples. Our panel of state and local tax professionals will discuss nexus, apportionment allocations, and how SALT planning should incorporate these rules for businesses with sales transactions in multiple states.


The varying apportionment formulas in states can lead to disproportional allocations of state income tax. In addition to these, 22 states impose throwback rules, and three have throwout rules. Adding this to the mix often results in even greater distortions of state income tax paid by businesses.

Throwback rules tax sales of tangible property in the state the sale originated, whether or not the income was earned in this jurisdiction, when the sale is not taxable in the destination state due to lack of nexus. Proponents believe these rules ensure that companies do not avoid taxation on this "nowhere income."

Often overlooked but undoubtedly crucial, the impact of these rules should affect the business location and investment decisions made by companies operating in multiple states.

Listen as our panel of SALT experts discusses the states imposing these rules, how the calculations are made, the interaction of Public Law 86-262 with the throwback rules, and planning opportunities that exist when coordinating sales in multiple jurisdictions.



  1. Background
    1. Apportionment
    2. Nexus
  2. Throwback rules
  3. Throwout rules
  4. Tangible and intangible property
  5. Interaction with Public Law 86-272
  6. Unitary combined reporting


The panel will review these and other critical issues:

  • What differences are there between state throwback and throwout rules for sales of tangible and intangible property?
  • Discuss recent legislation, which is shifting the landscape regarding throwback and throwout that has passed and is moving
  • How does Public Law 86-272 impact the application of throwback and throwout rules?
  • What are common state apportionment methods and how do these interact with throwback rules?
  • What planning opportunities exist for the distortions presented by application of throwback rules?


Dobay, Nikki
Nikki E. Dobay

Greenberg Traurig

Ms. Dobay is a nationally known state tax lawyer with significant experience and understanding of state tax policy. She...  |  Read More

Walczak, Jared
Jared Walczak

Vice President of State Projects
Tax Foundation

Mr. Walczak is Vice President of State Projects with the Center for State Tax Policy at the Tax Foundation. He is the...  |  Read More

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