Approximately 34 states require market sourcing to source sales of other than tangible personal property. Many states adopted market-sourcing rules in recent years and are only now beginning to finalize regulations regarding their implementation. A number of states have also adopted market-sourcing regulations attempting to provide additional clarity through more detailed rules.
In this installment of A Pinch of SALT in Tax Notes State, Eversheds Sutherland attorneys Eric Tresh and Liz Cha examine market-sourcing regulations in California, Illinois, and New York, and advise taxpayers to use customer-specific information in their books and records to determine what sourcing approach to use.
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