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Is this B ad S ourcing and Allocation or just Inconsistency ?. Taxpayers’ Federation of Illinois 11 th Annual Illinois State and Local Tax Conference September 23, 2010 Scott Heyman David Kupiec Ronald Cook
Taxpayers’ Federation of Illinois
11th Annual Illinois State and Local Tax Conference
September 23, 2010
Scott Heyman David Kupiec Ronald Cook
Sidley Austin LLP Kupiec & Martin, LLC Exelon Corp.
(312) 853-7501 (312) 632-1022 (312) 394-3088
Sales of services are in this State if the services are received in this State. 304(a)(3)(C-5)(iv)
Service of providing access to Wisconsin consumer is income-producing activity – regardless of the state in which sales persons and advertising production staff were located, primary service of providing access to a Wisconsin audience was performed in the state of WI.
(1) Sales from services to the extent the purchaser of the service received the benefit of the service in California.
(2) Sales from intangible property to the extent the property is used in California.
(3) Sales from the sale, lease, rental, or licensing of real property if the real property is located in California.
(4) Sales from the rental, lease, or licensing of tangible personal property if the property is located in California.
Cal. Rev. & Tax. Cd. § 25136
(1) The property is delivered or shipped to a purchaser, other than the United States government, within California regardless of the f.o.b. point or other conditions of the sale.
(2) The property is shipped from an office, store, warehouse, factory, or other place of storage in California and (A) the purchaser is the United States government or (B) the taxpayer is not taxable in the state of the purchaser.
Cal. Rev. & Tax Cd. § 25135(a)
In 2011, California will switch from the Joyce Rule to the Finnegan Rule:
For taxable years beginning on or after January 1, 2011, for purposes of determining whether sales are in California and included in the numerator of the sales factor, all sales of the combined reporting group properly assigned to California shall be included in the sales factor numerator for California regardless of whether the member of the combined reporting group making the sale is subject to the corporate franchise or corporate income tax. All sales not assigned to California pursuant to subdivision (a) shall not be included in the sales factor numerator for California if a member of the combined reporting group of the taxpayer is taxable in the state of the purchaser. Cal. Rev. & Tax Cd. § 25135(b).
Beginning in 2011, certain businesses will be able to elect to apportion income to California using a single sales factor apportionment formula for corporate income tax purposes.
Cal. Rev. & Tax. Cd. §25128.5(a)