Practitioners Question Tennessee Court’s Alternative Apportionment Decision


Arthur Rosen said that the Tennessee Court of Appeals erred in making a company source its Tennessee receipts using market-based sourcing rather than the cost-of-performance method. “I believe that alternative apportionment … should still represent the underlying tax policy that the legislature has adopted when it enacted the standard apportionment formula,” Mr. Rosen explained. “Alternative apportionment should be used when the standard factors do not represent that location and other means to find that same location may be used. Turning such legislative intent ‘on its head’ is just wrong.”