Apportionability Based on Constitutional Principles

Abstract

In this report, Peters examines the reasons for the business-nonbusiness income mess discussed by Professor Walter Hellerstein in a recent Tax Notes report, and what different results, if any, would have occurred in the decided cases had a constitutional standard been determinative. It is the thesis of this article that analyzing a case under the statutory definition of business income often masks the court's concern with the constitutional principles underlying the power of a state to subject to tax income from transactions occurring outside the borders of the state.