Income and Franchise Taxation: Apportionment/Allocation and Business/NonBusiness Income
In Appeal of Polaroid Corp., the State Board of Equalization (SBE) held that proceeds received by the taxpayer from apatent infringement lawsuit were business income and must be included in the (numerator and the denominator of the) sales factor. The SBE also held that only net income from the taxpayer’s investment of excess short-term financial instruments may be included in the sales factor
(The remainder of this article can be accessed in the 2004 edition of the ABA’s State and Local Tax Lawyer.)