For decades, the sales factor has been a primary focus of state and local tax articles and a hot topic of discussion at conferences across the country, and the attention is well deserved. There has been no shortage of impactful legislative changes, interesting administrative rulings, and significant (and at times frustrating) judicial decisions regarding the sales factor. Most coverage, however, is devoted to the sales factor numerator.
But the sales factor denominator should not be overlooked. In this installment of A Pinch of SALT published in Tax Notes State, Eversheds Sutherland attorneys Ted Friedman, John Ormonde and Daniel Hopper suggest that there is a renewed focus on the denominator, in part driven by changes made under the Tax Cuts and Jobs Act of 2017.