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Risks of Apportionment

While apportionment issues present challenges they also present opportunities. Proper planning can help to manage your overall tax liabilities, and knowledge of these issues can help mitigate potential exposures and combat aggressive taxing authorities on audit.


Transcript

Gary Bingel:

So under a lot of these traditional cost to performance methods, there was a lot of record keeping that was required. You had to keep very detailed record of where your costs are, where your people were, where your property was you had to keep records possibly on a job by job basis, customer by customer basis, project by project or contract by contract, and it got very difficult to often keep those records, especially with states having different rules and regulations because some states would include third party costs, some states would include indirect costs like overhead and SG&A and how do you include those in specific contracts and such. So there was a lot of record keeping with that. The problem with the market sourcing, unfortunately is that while there's less record keeping, you also just may have less information available to you. Specifically, if you're selling things like software or some other sort of intangible, you may be told to deliver it via the Internet to a file transfer protocol site.


Gary Bingel's expertise focuses on state and local income taxation, and sales and use tax consulting. He has significant experience serving clients in the manufacturing, retail, pharmaceutical, biotechnology, technology and service industries.

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