What is Market-based sourcing?
In short
Under market-based sourcing, a state assigns receipts from services and intangibles to the state where the customer receives the benefit, rather than where the seller performs the work.
Key takeaways
- The older approach, cost of performance, assigns receipts to where most of the costs are incurred.
- Most states now use market-based sourcing for services.
- It tends to increase tax in states with many customers but little physical presence.
Where it's tested
TCP: Multi-Jurisdictional & International Basics — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A company's only activity in a state is sending sales representatives to solicit orders for tangible goods, which are approved and shipped from outside the state. What protection does Public Law 86-272 provide?