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$$DISPLAY_DESCRIPTION$$ Date: $$AVAILABLE_DT$$
Time: $$LENGTH_TM$$ The Throwout Rule: A Controversial State Response to “Nowhere” Income “Nowhere” Income States possess broad authority to craft unique tax regimes with diverse apportionment methodologies, such as single-sales factor or three-factor apportionment formulas and cost-of-performance or market-sourcing rules. The states’ power to enact diverse apportionment methodologies has created instances of multiple taxation as well as so-called “nowhere” income, which is untaxed income of multistate taxpayers. Consistent with our federalist system, states also have the right to enact laws that combat perceived structural flaws of their tax systems, including nowhere income. Of the remedial tax laws that seek to curb nowhere income, the “throwout rule” is arguably the most controversial. This BNA Audiocast will first examine the advent of the throwout rule and variations of the rule adopted (or considered) by several states. The speakers will also discuss the constitutionality of the throwout rule. The Throwout Rule Under the throwout rule, if a taxpayer is not taxable in a state where receipts are sourced, then the taxpayer must exclude those receipts from the denominator of the taxing state’s sales factor. Thus, the throwout rule redistributes formerly untaxed, or “nowhere,” income among the states where that taxpayer is subject to tax.
During this live event, multistate tax practitioners Kendall Houghton and Charlie Kearns argue that the throwout rule allows states to tax more than their fair share of income and runs afoul of the U.S. Constitution’s protections against multiple taxation. In response, the Multistate Tax Commission’s (MTC’s) Shirley Sicilian notes that one of the goals of the Uniform Division of Income for Tax Purposes Act (UDITPA) is to avoid nowhere income. Though not currently included in UDITPA’s provisions, the throwout rule, she argues, is an appropriate response, similar to the throwback rule, to preventing nowhere income. She also says that the throwout rule is not facially unconstitutional. UDITPA Review For years, tax professionals have lamented the difficulties of applying mid-century UDITPA apportionment rules in this new millennium business environment. In response to these compiling difficulties, a number of states have begun to consider significant adjustments to their adopted version of the model UDITPA. The MTC initiated a project to consider amendments to the Multistate Tax Compact and recommended to the Uniform Law Commission that it initiate a project to review its model UDITPA. Several aspects of these projects have been very controversial, including the question of whether there should be a project at all. Presentation Objectives During this 60-90 minute presentation, attendees will learn: - Which jurisdictions employ a throwout rule or variation thereof
- How to identify some scenarios in which a throwout rule is likely to apply
- The details of the MTC’s use of the throwout rule in certain model statutes and regulations,
- Why throwout rules have been constitutionally challenged
- The latest developments in New Jersey regarding litigation and legislation addressing the throwout rule
- The impetus and status of the MTC’s and ULC’s initiatives to modernize model apportionment laws
Register quickly and easily online to secure your space now. Or, please call 1-800-372-1033 option 6, then option 1, and refer to the date and title of the audioconference. Lines are open Monday through Friday from 8:30 a.m. to 7:00 p.m. ET, excluding most federal holidays.
Don't miss this opportunity to hear a lively, dynamic presentation. Not only are audioconferences an excellent way for you to stay current, with BNA you also get: - Quality. Count on it. Nothing is canned.
- Objectivity. BNA Tax Management provides you with the best and most objective information.
- Affordability. BNA Tax Management audioconferences are inexpensive when compared to the cost of travel to attend conferences with leading experts and practitioners. Plus, you may use a speakerphone and invite as many of your colleagues as you want to listen in -- all for the price of a single registration. See pricing for more details.
- Convenience. No airlines. No travel. No time out of the office.
In addition, you'll receive: - Personal attention. Once you've registered, send your e-mail questions in advance to ksavell@bna.com and they will be included in the program. You'll also have a chance to e-mail your questions during the audioconference.
- Conference materials. We’ll e-mail links to the materials that will accompany the audioconference one day in advance. If you do not receive this pre-conference e-mail, e-mail abaskin@bna.com.
Prerequisite: None
Level: Update
Delivery Method: Live
Recommended CPE Credit: 1 credit
If you would like to apply for CPE credits, please make sure to provide your contact information when you register, complete the post-conference evaluation form, note that you want to apply for CPE credits, and attend the audioconference from start to finish. Learn more about BNA's NASBA Registration
Cancellation policy
To cancel your registration for this event, you must contact Customer Service (1-800-372-1033, option 6, Monday through Friday, 8:30 a.m.-7:00 p.m. ET excluding most federal holidays) no later than 24 hours prior to the scheduled start of the audioconference. You will receive a CD of the audioconference or a credit valid for one year. Your credit may be applied toward the purchase of any BNA product or audioconference.
Refund Policy
If for any reason you are not completely satisfied with this program, we will provide a full refund — no questions asked! 
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