Foley & Lardner LLP partner Lynn Gandhi was featured in two Tax Notes articles covering key state tax apportionment issues discussed during the Multistate Tax Commission’s annual conference.
In the article, “Alternative Apportionment: 2026 Flashpoints,” Gandhi discussed renewed taxpayer interest in alternative apportionment and noted that the widespread adoption of the single sales factor “had its origins in tax avoidance and tax minimization” rather than a singular theory of fair apportionment.
She said that whether the single-sales-factor methodology fairly reflects business activity depends on the type of income at issue, noting that the Supreme Court has addressed its application to operating income but not capital gains.
In a second article, Gandhi discussed the challenges of applying state apportionment formulas to capital gains and other nonoperating income that may accrue over multiple years. “It’s not all earned that year. It’s a slow accumulation, accretion of income over a long period,” she said.
Emphasizing the difficulty of fitting a singular, nonrecurring gain into formulas designed for operating income, Gandhi said, “Trying to shove it into operating income just doesn’t work. It truly is apples and oranges being mixed together.”
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