Thank you to everyone who participated in last week’s trivia question!
Last Week’s Question:
What was the first state to adopt a single-factor sales factor formula for apportioning an interstate corporation’s income for state income tax purposes?
The Answer:
Iowa. In Moorman Mfg. Co. v. Bair, 437 U.S. 267 (1978), the U.S. Supreme Court held that Iowa’s use of a single-sales factor did not violate the U.S. Due Process Clause or Commerce Clause, paving the path for a trend towards increasing weight placed on sales factors, while reducing the emphasis on property and payroll factors.
The dissent noted this particularity, with Justice Powell noting that “[i]t suffices to dispose of this case that nearly all the other States use a basic three-factor formula, while Iowa clings to its sales-only method.” Moorman Mfg. Co., 437 U.S. at 297, n.9.
Keep an eye out for our next trivia question on Wednesday!