The Quiet Revolution in U.S. Subnational Corporate Income Taxation

Abstract

Stark suggests that state corporate income taxes should be abolished and the corporate income tax assigned to the federal government.

The history of U.S. subnational corporate income taxation over the past two decades is largely a story of the unraveling of the Uniform Division of Income for Tax Purposes Act, Stark suggests. Recent changes toward emphasizing the sales factor are gradually transforming the corporate income tax into something more like a modfified gross receipts tax, the author says.

Congress has the power under the Commerce Clause to preempt state or local taxation of multistate or multinational corporations, the author writes. It is time for Congress to consider doing so, the author suggests.