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Apportionment applies to companies that do business in more than one state. States that impose corporation income taxes require companies subject to those taxes to use state-specified Apportionment formulas to determine income subject to tax in a taxing state.

Apportionment formulas are used to determine the proportion of a states taxable income or assets that are applicable to the taxing state.

Apportionment formulas vary from state to state. The most common Apportionment formulas compare a company's taxable income or assets in the taxing state to the company's total income or assets.

Most states use Apportionment formulas that use total sales income in the taxing state to total sales in all states. Some states use Apportionment formulas which include factors comparing each company's property and payroll in the taxing state to its total property and payroll.


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