To prove its entitlement to use an alternative apportionment method, the party asserting alternative apportionment must prove that the proposed alternative method is a “reasonable” approximation of the taxpayer’s activities and income in the state. This advisory explains why a reasonable alternative method should not simply be any apportionment method drawn from the universe of generallyacceptable apportionment methods, but posits that, instead, a proposed alternative method should be accepted as reasonable when the party asserting alternative apportionment is able to tie the proposed alternative method to the basis for deviating from the standard formula.
This advisory was originally published in the September 2013 IPT Tax Report and is also provided on the Alston & Bird website: www.alston.com/advisories/SALT-Sept_2013/
